Wednesday, February 15, 2012

Crony capitalism at work

I ran across this a little bit back, and seem to have forgotten about it.  As the story does not seem to have been picked up by anyone, it still seems relevant.

The article focuses more on what Obama is up to, but they are trying to be somewhat fair by noting that he did not invent the practise:  actually Bush didn't either but at least they are being bipartisan.
Big banks binge on Bush-Obama ‘venture socialsim’
Timothy P. Carney, Washington Examinaer, 13 November 2011 (Ht: NC)

In its latest act of venture socialism, the Obama administration has offered a novel taxpayer backstop to General Electric, the multinational industrial conglomerate that is famously close to this administration, and that spends more on federal lobbying than any other company. The government accessory in this instance is the Export-Import Bank of the United States, a federal agency that finances U.S. exports at taxpayer risk.
Ex-Im exists to subsidize U.S. businesses, with most of the subsidy dollars facilitating Boeing sales. Other industrial titans like GE, Bechtel, and General Dynamics devour most of the rest of the Ex-Im subsidy pie. But manufacturers aren't the only beneficiaries of this little-known federal agency -- banks profit from it, too. For instance, when Ex-Im recently approved $1 billion in financing to subsidize Pemex, Mexico's government-owned oil company, 3M and other U.S. exporters of oil-field equipment benefited, but so did some big banks. Bank of America and JP Morgan financed these sales, and so if Pemex defaults, it's these megabanks the U.S. taxpayer will be bailing out.


Degringolade said...

Russell: I left a comment resonding over at my place.


Yeah, you are right, and I am coming to the conclusion that Jesse may be right and I was wrong.

Theft is theft. Shadenfreude for those better off than you is vulgar and I should be above it."

Your post today shows that the theft is becoming more obvious. The big boys are not changing their ways, and we are still screwed.

russell1200 said...

I made a specific reply there.

On a more general level, the elite seem to be really going after each others throats.

The cut off the top off the world economy is not large enough to pay off all the self-entitled participants. Arguably, you could take this all the way down to the level of middle class college students wanting debt forgivenessness without penalty.