Fred Hochberg and the Ex-Im Bank (again)

posted at 5:31 pm on May 4, 2013 by Jazz Shaw

Almost exactly one year ago this weekend we were talking about the controversial decision to renew the charter of the United States Export Import Bank (Ex-Im). This slush fund serves as a hotbed for intrusive government busybodies, sweetheart deals for cronies and the thumb of the government on the scale of commerce. Still, when we had the chance to let it simply expire, it was renewed until 2014. And now the bank’s Chairman, Fred Hochberg, is up for a renewal of his contract by the Senate. But will the members of the upper chamber ask Hochberg any of the tough questions which deserve to be examined?

Why is Hochberg’s organization approving loans for companies now owned by the Chinese?

The U.S. Export-Import Bank (Ex-Im) is financing the purchase of solar panels from a manufacturer now owned by the Chinese that had previously attracted investments from prominent Democrats, the bank announced Wednesday.

The response from an Ex-Im spokesperson? “‘The ownership of the company is not relevant to the decision to approve financing…”

If Ex-Im is supposed to be helping grow American companies and assist them in expanding into overseas markets, why is almost all the money going to a single company? Of $14.7 billion in loan guarantees for 2012, $12.2 billion went to subsidize Boeing sales. Granted, Boeing does a lot of exporting, but aren’t there a lot more companies who could use some help competing in other markets? If that’s all Ex-Im is going to do, maybe the government should just set up a new law specifically to bail out Boeing.

There are plenty more questions which could – and should – be asked. So will the Senate do their job and grill this guy and find out where all this money is going, or will he just get a free pass again? The hearings will take place on Tuesday, so tune in and find out.


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So will the Senate do their job and grill this guy and find out where all this money is going, or will he just get a free pass again?

Heh.

Curtiss on May 4, 2013 at 5:49 PM

The problem is that Boeing is forced to compete against Airbus, which has even more immense government subsidies backing their products. The subsidies they are getting are only to level the playing field against that sort of unfair competition.

Edunai on May 4, 2013 at 5:59 PM

The problem is that Boeing is forced to compete against Airbus, which has even more immense government subsidies backing their products.

Then let’s let Boeing build something else, and we’ll fly Airbus aircraft subsidized by European taxpayers. The alternative is for our taxes to prop up Boeing’s profits. Choose one.

glockomatic on May 4, 2013 at 6:22 PM

You know, I import and export stuff every day. I certainly don’t need these guys. I’ll bet they don’t even know I exist.

That’s probably a good thing.

trigon on May 4, 2013 at 6:23 PM

I don’t think you understand the situation, Glockomatic, Boeing is locked in a death struggle with Airbus, WTO has continually ruled against Airbus for their subsidies and the EU just keeps it up. I’m glad you are so blase about having piece of shit Airbus products as the only commercial airliners, but whenever Boeing and Airbus compete on their merits and not on price points, Boeing wins, Boeing makes a *superior* product. I don’t mind leveling the playing field when it’s to allows for actual competition.

Edunai on May 4, 2013 at 7:21 PM

So will the Senate do their job and grill this guy and find out where all this money is going, or will he just get a free pass again?

…why are you asking such a funny question?

KOOLAID2 on May 4, 2013 at 8:32 PM

Then let’s let Boeing build something else, and we’ll fly Airbus aircraft subsidized by European taxpayers. The alternative is for our taxes to prop up Boeing’s profits. Choose one.

glockomatic on May 4, 2013 at 6:22 PM

I have to agree with Edunai here. I understand in theory how your approach makes sense, but there are a couple of problems in practice. First, the subsidy only comes from the EU in order for Airbus to compete with Boeing. If Boeing were to exit the market, so would the subsidy and we’d be stuck with crappy overpriced Airbus products. It’s not like Boeing can just hop in and out of the commercial aviation business at will — the order pipeline is measured in decades.

If any superior domestic producer could be chased out of the market with temporary subsidies we’d soon find ourselves making nothing. Free trade agreements — aggressively enforced — are the answer, not just taking advantage of temporary external distortions in this or that market.

SoRight on May 5, 2013 at 4:17 PM