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Breitbart
Business
Insider: Economy Needs Crony Capitalism
by
Mike Flynn 29
Jun 2014
Now
that there are major warning signs that the dismal economic
“recovery” under President Obama is faltering, Business Insider,
which has seized on obscure data points to cheerlead for an economic
“breakout,” appears to be looking for scapegoats.
A new
article from Joe Wiesenthal warns Congress could “screw up” the
economy over the Export-Import Bank and over highway funding just as
government spending is set to bottom out.
The
Export-Import Bank (Ex-Im), a product of Roosevelt's New Deal, is set
to expire at the end of September. With political stars aligning
against renewing the bank, Wall Street and mega-corporations are
scrambling to convince the public that ending the corporate welfare
would hurt the economy.
The
Ex-Im bank subsidizes foreign companies to purchase goods made by
American companies. The taxpayer-funded boost, though, is
concentrated on just a few highly-connected corporations. Around 60%
of the subsidy benefits just 10 huge companies.
Proponents
argue these companies are in competition with overseas firms that
benefit from their own government-subsidized loans. The most notable
instance is The Boeing Company, which competes with European Airbus,
which unsurprisingly receives government subsidies.
Critics
note that helping one American company often puts other American
companies at a disadvantage in another sector. In the case of Boeing,
subsidizing overseas plane purchases helps foreign air carriers and
hurts domestic ones. Delta, whose foreign, often state-owned,
competitors benefit from the US government subsidy, calculates that
the disadvantage has cost the domestic airline around 2,500 jobs.
Critics
also question whether the special terms are necessary in an era of
near-zero or even negative interest rates. There is an abundance of
private liquidity to finance productive investments; 98% of all US
exports are financed without Ex-Im financing.
Wiesenthal
warns that conflict over the issue could lead to a government
shutdown, although the idea that it would prompt one largely exists
only in the minds of liberal pundits at this point...
Read
the rest of the article at Breitbart
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