Later On

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Idiocracy is here: The GOP job-killers

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Two columns worth reading: “Defunding the ExIm Bank,” by James Fallows in the Atlantic, and “Republican Job Killers and the Export-Import Bank,” by Joe Nocera in the NY Times.

It turns out that ignorance and zealous ideology don’t work well in governing.

From the first article:

. . . The anti-ExIm argument was that big, rich companies like Boeing or GE should not depend on taxpayer help for financing their sales to customers overseas. That might sound true enough, within the confines of the 11th-grade Ayn Rand Debating Club.

In the actual world we inhabit, those firms are competing with others from Europe, China, Japan, Brazil, Russia, South Korea, etc. From places, that is, where government officials dozed through (or laughed at) the Ayn Rand part of the economics courses and are happy to promote their own exporters.

The results? Here’s one, from a Reuters story yesterday: . . .

From the second:

. . . What Oberhelman finds “staggering,” Immelt finds “hard to believe” and McNerney finds ironic is the refusal of Republican extremists — led by the House Financial Services Committee’s chairman, Jeb Hensarling — to allow a vote on the reauthorization of the Export-Import Bank of the United States, a vote that would pass in a landslide. The Ex-Im Bank, which insures and sometimes finances export sales, had to stop making deals at the end of June, when its reauthorization deadline came and went.

Although the Ex-Im Bank still exists, it has been reduced these days to managing its portfolio, rather than underwriting or insuring new deals. According to Boeing, its foreign rival Airbus, which can tap not one but three export credit agencies, is spreading the word to potential aircraft customers that Boeing can no longer compete when bids require sovereign insurance. That is hardly the only such example.

The damage this is doing to our economy is starting to become clear. In recent weeks, Boeing, America’s largest exporter in dollar volume, made two sobering announcements: first, that Asia Broadcast Satellite canceled an $85 million satellite contract expressly because there was no Ex-Im support. (Boeing is hoping to renegotiate.) More recently, Kacific, a Singapore-based satellite company, told Boeing not to bother bidding on a satellite contract, again because of a lack of Ex-Im financing.

As a result, McNerney told me, “layoffs in the hundreds” have taken place in Boeing’s satellite division.

This week, it was G.E.’s turn to make Ex-Im-related news. First, it said it would move 400 jobs to France to manufacture — and export — gas turbines, and 100 final assembly jobs to Hungary and China. Then it said it would create a new turboprop center in Europe that would employ up to 1,000 people. In both cases, G.E. said the moves would allow the company to take advantage of European export credit agencies.

When I spoke to Immelt, McNerney and Oberhelman, whose company also uses the agency, they all sounded astonished that this important tool, which they need to compete with companies abroad, was being taken away for purely ideological reasons. . .

Written by LeisureGuy

23 September 2015 at 9:20 am

Posted in Business, GOP, Government

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