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"B-" Congressmen for Ex-Im Subsidies


Andrew Moylan
April 30, 2012

30 House Republicans have made waves in the ongoing saga of the odious Export-Import Bank by writing a letter to House Leadership urging its reauthorization. The Ex-Im Bank is almost universally opposed by conservatives and true supporters of free trade because it subsidizes exports on the backs of the American taxpayer, but the signers of the letter call themselves conservatives and much of the coverage of it has asserted the same. So, how conservative are the signers of this letter?

Of the 30 signers of the letter, their average score on NTU's 2011 Rating of Congress was a whopping 72.8%. Only two received Taxpayers' Friend Awards, meaning they scored higher than 85% for an A grade: John Campbell (R-CA) and Cynthia Lummis (R-WY). Only five scored higher than 80%, while 13 scored somewhere in the 70s, and 12 scored in the 60s. In short, many of the signers have middling fiscal records.

The letter is full of the same pablum we've been hearing from the Chamber of Commerce and other supporters of subsidies for big business. Perhaps my favorite line is when the Members say, "it seems counterproductive to unilaterally disengage," meaning that it would be unwise for us to wind down our export subsidies while foreign countries like China maintain or expand theirs. This sort of a statement has intuitive appeal for some, but it's simply foolish.

China's export subsidies are an economic distortion that comes at the cost of their taxpayers and citizens and accrues to the BENEFIT of American taxpayers and citizens (and others that import things made in China). If the Chinese government insists on taxing its citizens in order to make the products they sell to us cheaper to purchase, the correct response to that is not to turn around and tax OUR citizens to make the products we sell abroad cheaper. The correct response is to say, "Thank you for the free money" (in the form of cheaper products for us) and shut down our damaging export and tariff programs.

Most conservatives understand that message. Apparently at least 30 of them need convincing.


 

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Submitted by mackinaw at: May 10, 2012
We are in a tough situation now that we have gotten into all these free trade agreements. Ricardo's theory of comparitive advantage is the basis for free trade and selling of all these world trade agreements. The problem is Ricardo's analysis was with countries of essentially the same competitiveness and cost of workforce. Government overlooked that when sold this bill of goods. When we compete against china they have no health care or pensions and obviously their wages have been miniscule. Of course every CEO wanted to get in on China and its extremely low cost of production. The US cannot compete but the playground is getting more level as Chinese wages rise. It was foolish and Ross Perot described it perfectly as the "giant sucking sound" as jobs left the country. But another huge factor has been that industry within the US has used methods to get far more out of their current productive assets. Methods such as Six Sigma Process and Statistical Process Control. Which have made the need for workers less and less at the same time. The problem is complex. The only reasonable economic solution is a tough one to swallow. Get government out of business completely and get government to insure a level playing field and develop competition if needed by promotion of free enterprise. Of course this is no instant solution. The other problem is the US cannot put in place tariffs because so much of US business is now based upon China. Killing this trade would not only cause world wide retaliation but it would also kill so many US jobs that utilize Chinese workforce to deliver goods. Our economy's structure has changed. The solution is certainly not to pay money to US companies. This negates competition and government is always trying to fight economic forces, which they can't win. The forces always win e.g. recent housing promotion through Fannie and Freddie. The government should be freeing economic forces to allow business to provide services and products to Americans for cheaper prices. Government should play the watchdog to insure competition is in place and monopolization isn't. The last economically healthy thing to do is favor some industry or business. This eliminates competition. They should provide more competition and services and products will appear as those businesses try to meet the public's need. Unfortunately the only permanent solution is not instantaneous.

Submitted by Mary S. at: May 8, 2012
China imports are not "free money" when it comes at the expense of U.S. jobs going to China because our government won't help level the playing field which will cost us one way or another! We have massive unemployment that averages at least $50-100B/year in federally funded unemployment benefits alone which does not cover all needs and a lot more don't even get it, and many lose their home, which costs the already struggling housing market even more, impacting the majority of us! Plus states spend to help their unemployed instead of more contracting which would benefit manufacturers and other businesses! So imagine companies coming back, and responsible companies taking advantage of the program to make their products here instead of overseas! Not only do they create jobs, but the workers that they hire go out and spend again and that boosts those businesses so they can grow and hire! Don't punish all companies or hinder manufacturing growth in the U.S., hold those companies accountable that subvert the program and keep building up manufacturing here in the U.S.!

Submitted by Stop investing!!! at: May 7, 2012
The federal government should fix roads, build bridges and protect our country. The government has no right investing in private business period!