For all of the talk of economics as a science, with no moral dimension, there is a term used by all economists: moral hazard. Moral hazard says if you arrange incentives in a way that is likely to cause people to do the wrong thing, they likely will do the wrong thing.
Here is an example, straight from the Ex Im Bank:
As a small exporter of floral greens in Puyallup, Janis van Well takes comfort knowing that she has insurance from the federal government: It will protect her company's losses for up to $1.6 million if any of her foreign customers won't pay their bills.
Why is she selling to people who cannot pay their bills? Why should the taxpayers be on the hook for her companies bad credit decisions? Since she does not have to worry anymore about not getting paid, since the deal is the taxpayers are on the hook if her decisions go bad, then it is very likely that such bad decisions will be made.
In van Well's case, the bank provided "accounts receivable insurance," where the company pays a monthly fee to receive protection from bad debts. She said that last year marked the first time that her company, which has about 20 full-time employees, signed up for such an insurance plan.
Note also, as an example of the absolutely necessity for this program, the Ex Im Bank uses someone who has been in the program for one year. What did they van Wells do the previous decades? Exercise good judgment?
Yes, there are plenty of people who provide trade insurance, but they have to compete with the Ex Im Bank. Without the Ex Im Bank getting credit would be harder, but not too hard, and certainly not impossible. The Ex Im Bank is another example of a government program solving a problem that does not exist.
There is a reason why Ex Im Bank had to use a recently recruited example: any other example is either Boeing, which the article admits, or long time political hacks who've been blessed with funding for "services rendered." In any event, here is another airplane maker, who needs no welfare transfers. With the government propping up Boeing, many workers are not available to move on to a profitable firm, and help grow our economy.
I'll make a prediction, with all of this new money being spread around, the Ex Im Bank will see a huge increase in failures and costs to taxpayers in the coming years. It is just a subprime loan program to benefit billionaires.
The program was instrumental in helping out the Soviet Union, which was in the middle of murdering 5 million Ukrainians, by helping make up for the loss of production their deaths occasioned. One active US Citizen in this was Armand Hammer, named by his communist father after the Arm and Hammer of the Socialist icon. The Ex Im Bank was the finance arm that made Armand Hammer a billionaire, and the losses were legendary to the USA taxpayer. The Ex Im Bank only talks about making money in the last year or so, they dare not reveal its entire history. Hammer in turn backed Al Gore's father for Senate, and in turn Al Gore, the Vice President. This is no secret, take a look at the Gore family estate in Tennessee. Talk about a government program that picks winners and losers!
Washington Senator Maria Cantwell, D- RealNetworks, claims one in three jobs in Washington depends on world trade, that is silly from several point of view. Senator Patty Murray, D-Boeing, says 83,000 jobs will be lost.
1. The figure is arrived at by dividing exports leaving washington state by Washington State total economy. Sigh. Since we have ports, much from Michigan, Colorado, Idaho, etc, is loaded and shipped out of Washington. That gets counted. It was silly in the 70's when they claimed 1 in 4 Washington state jobs depended on exports, and it is sillier now.
2. Whatever the total is, not all of it is based on Ex Im Bank. Some people actually run rational profitable export businesses.
3. Most of the money goes to Boeing, which would find alternative sources of finance if not taxpayer-backed finance. Ex Im bank does not make plane sales possible, it makes it merely easier.
Cantwell said the bank has helped pay for the construction of one of every three Boeing planes built in the state in the last three years, or about 450 commercial aircraft in all.
Well, who is financing the other two of the three exported jets? Private companies who make good money doing so. Why are the taxpayers obligated to steal business from these private companies?
But let's look at an important point:
Eric Schinfeld, president of the Washington Council on International Trade, an affiliate of the Seattle Metropolitan Chamber of Commerce, said the bank does not aid Boeing directly because the money goes to its customers.
Yes, precisely. As we destabilize countries around the world, our state department can promise the violent revolutionaries that if they overthrown their government, we can set them up with airlines, etc. all taxpayer backed. Ex Im bank is heavy in airplanes, oil, gold, agriculture and directly links the USA taxpayer with USA war crimes round the world. You make it happen.
Of course there is little one can do about it. The push to rid ourselves of this noxious weed is mere grandstanding. Those congressfolk who are pushing to rid us of it are merely setting up a horse trading session: we'll vote for your odious Ex Im bank if you vote for our odious program. It's how things work:
As a presidential candidate four years ago, Obama dismissed the bank as "little more than a fund for corporate welfare." But as president he has been a reliable supporter and now says it has been a key player in helping promote U.S. exports. In 2010, Obama set a goal of doubling U.S. exports by 2015.
Naturally. A deal will be cut, the program will live on forever, or until the USA crumbles and becomes like the middle east is today: a place that was once renown for peace and prosperity, but is now mired in poverty and violence.
But the article did reveal an opportunity for an enterprising young person. Recall this?
Well, they have admitted they are not as competitive as they once were. They say they are tiring. In Washington, or in USA trying to pass on a business or sell it results in overwhelming taxes. It is a safe bet this business will not survive, one way or another. One could take the article and share it with buyers in the named countries as evidence their supply may falter, their supplier needs a government bailout, and the buyers overseas should recruit the younger more solvent newbie than the retiring people who claim to be too old to be competitive. Now, it is unlikely that the buyers around the world would give the newbie all of the business, but they now doubt would give some. Say it is 10%, then your first year would be $400,000 in sales. Or if one of their 40 employees hopes to have long term employment, maybe the way is self-employment.
We likely cannot get rid of the Ex Im Bank, but we can take out those who fall into its trap, and thus keeping the markets in that measure more free. There is a moral dimension in economics, and we cannot let the state interfere in the markets and pick winners and losers.
Feel free to forward this by email to three of your friends.
Here is an example, straight from the Ex Im Bank:
As a small exporter of floral greens in Puyallup, Janis van Well takes comfort knowing that she has insurance from the federal government: It will protect her company's losses for up to $1.6 million if any of her foreign customers won't pay their bills.
Why is she selling to people who cannot pay their bills? Why should the taxpayers be on the hook for her companies bad credit decisions? Since she does not have to worry anymore about not getting paid, since the deal is the taxpayers are on the hook if her decisions go bad, then it is very likely that such bad decisions will be made.
In van Well's case, the bank provided "accounts receivable insurance," where the company pays a monthly fee to receive protection from bad debts. She said that last year marked the first time that her company, which has about 20 full-time employees, signed up for such an insurance plan.
Note also, as an example of the absolutely necessity for this program, the Ex Im Bank uses someone who has been in the program for one year. What did they van Wells do the previous decades? Exercise good judgment?
"Our business has always been done on a handshake," she said. But with the uncertainty in the economy, she said, she and her husband decided it was time to get insurance.
"There's a lot of different companies that do that, but we like this one because it was through the government," van Well said. "I would not like to see it disappear."
Yes, there are plenty of people who provide trade insurance, but they have to compete with the Ex Im Bank. Without the Ex Im Bank getting credit would be harder, but not too hard, and certainly not impossible. The Ex Im Bank is another example of a government program solving a problem that does not exist.
There is a reason why Ex Im Bank had to use a recently recruited example: any other example is either Boeing, which the article admits, or long time political hacks who've been blessed with funding for "services rendered." In any event, here is another airplane maker, who needs no welfare transfers. With the government propping up Boeing, many workers are not available to move on to a profitable firm, and help grow our economy.
I'll make a prediction, with all of this new money being spread around, the Ex Im Bank will see a huge increase in failures and costs to taxpayers in the coming years. It is just a subprime loan program to benefit billionaires.
The program was instrumental in helping out the Soviet Union, which was in the middle of murdering 5 million Ukrainians, by helping make up for the loss of production their deaths occasioned. One active US Citizen in this was Armand Hammer, named by his communist father after the Arm and Hammer of the Socialist icon. The Ex Im Bank was the finance arm that made Armand Hammer a billionaire, and the losses were legendary to the USA taxpayer. The Ex Im Bank only talks about making money in the last year or so, they dare not reveal its entire history. Hammer in turn backed Al Gore's father for Senate, and in turn Al Gore, the Vice President. This is no secret, take a look at the Gore family estate in Tennessee. Talk about a government program that picks winners and losers!
Washington Senator Maria Cantwell, D- RealNetworks, claims one in three jobs in Washington depends on world trade, that is silly from several point of view. Senator Patty Murray, D-Boeing, says 83,000 jobs will be lost.
1. The figure is arrived at by dividing exports leaving washington state by Washington State total economy. Sigh. Since we have ports, much from Michigan, Colorado, Idaho, etc, is loaded and shipped out of Washington. That gets counted. It was silly in the 70's when they claimed 1 in 4 Washington state jobs depended on exports, and it is sillier now.
2. Whatever the total is, not all of it is based on Ex Im Bank. Some people actually run rational profitable export businesses.
3. Most of the money goes to Boeing, which would find alternative sources of finance if not taxpayer-backed finance. Ex Im bank does not make plane sales possible, it makes it merely easier.
Cantwell said the bank has helped pay for the construction of one of every three Boeing planes built in the state in the last three years, or about 450 commercial aircraft in all.
Well, who is financing the other two of the three exported jets? Private companies who make good money doing so. Why are the taxpayers obligated to steal business from these private companies?
But let's look at an important point:
Eric Schinfeld, president of the Washington Council on International Trade, an affiliate of the Seattle Metropolitan Chamber of Commerce, said the bank does not aid Boeing directly because the money goes to its customers.
Yes, precisely. As we destabilize countries around the world, our state department can promise the violent revolutionaries that if they overthrown their government, we can set them up with airlines, etc. all taxpayer backed. Ex Im bank is heavy in airplanes, oil, gold, agriculture and directly links the USA taxpayer with USA war crimes round the world. You make it happen.
Of course there is little one can do about it. The push to rid ourselves of this noxious weed is mere grandstanding. Those congressfolk who are pushing to rid us of it are merely setting up a horse trading session: we'll vote for your odious Ex Im bank if you vote for our odious program. It's how things work:
As a presidential candidate four years ago, Obama dismissed the bank as "little more than a fund for corporate welfare." But as president he has been a reliable supporter and now says it has been a key player in helping promote U.S. exports. In 2010, Obama set a goal of doubling U.S. exports by 2015.
Naturally. A deal will be cut, the program will live on forever, or until the USA crumbles and becomes like the middle east is today: a place that was once renown for peace and prosperity, but is now mired in poverty and violence.
But the article did reveal an opportunity for an enterprising young person. Recall this?
"It gives us peace of mind," said van Well, 61, who owns Golden Eagle Evergreens with her 64-year-old husband. "We're getting a little older and, if we do suffer a loss, it hits a lot harder. If you're in your 30s or 40s, it's easier to recover."
The $4 million company, which sends its greens for bouquets to businesses in Germany, Japan, Canada, New Zealand and the Netherlands, is one of 74 companies in Washington state that found help in 2011 from the Export-Import Bank of the United States.
Well, they have admitted they are not as competitive as they once were. They say they are tiring. In Washington, or in USA trying to pass on a business or sell it results in overwhelming taxes. It is a safe bet this business will not survive, one way or another. One could take the article and share it with buyers in the named countries as evidence their supply may falter, their supplier needs a government bailout, and the buyers overseas should recruit the younger more solvent newbie than the retiring people who claim to be too old to be competitive. Now, it is unlikely that the buyers around the world would give the newbie all of the business, but they now doubt would give some. Say it is 10%, then your first year would be $400,000 in sales. Or if one of their 40 employees hopes to have long term employment, maybe the way is self-employment.
We likely cannot get rid of the Ex Im Bank, but we can take out those who fall into its trap, and thus keeping the markets in that measure more free. There is a moral dimension in economics, and we cannot let the state interfere in the markets and pick winners and losers.
Feel free to forward this by email to three of your friends.
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