06/04/13 Crony Capitalism


Watch my video from last year when I pointed out how awful the U.S. government’s Export-Import Bank is.  It actually costs American jobs in order to bankroll crony capitalism.  But Washington loves it.

[The Export-Import Bank was started by President Franklin Roosevelt in 1934 to loan money to the Soviet Union. That ended badly didn’t it? Now the Ex-Im Bank provides low-interest loans to foreign companies to buy U.S. goods.]

[The legislative history of the Ex-Im Bank is here.]

Here’s an example of how the Ex-Im Bank works.

First Solar is one of those troubled green energy companies you hear about (here, here & here).  [Yahoo.com financial profile of First Solar is here.]

It makes solar panels. Unfortunately, its solar panels don’t work very well in heavy sunlight.  Some might consider this a show-stopper.  But they don’t in Washington.

First Solar wanted a sweetheart, taxpayer-backed loan from the Ex-Im Bank.  In spite of losing about $135 million in the last couple of years. It was the worst-performing stock in the S&P 500 for 2011.

[First Solar’s annual reports filed with the Securities and Exchange Commission for the years ending in 2011 and 2012 are here & here.]

Enter the Center for American Progress. This de facto lobbying group was started by chairman of the Obama transition team John Podesta.  Using money from George SorosSoros is a billionaire who became an American citizen.  And then began criticizing America as a really terrible country.

Key officials at the Center lobbied for taxpayer money.  Which First Solar got.  Nearly $5 billion in 2011. 

First Solar also happens to be a secret donor to the Center for American Progress. So First Solar gets taxpayer money from the federal government.  Then it gives money to CAP.  Then CAP can lobby for more money for First Solar.  And the cycle continues. 

Crony Capitalism at its best.

[Here is another example.  Nearly $50 billion has been loaned to support one company: Boeing. The money only goes to foreign companies — in this case, foreign airlines. They buy Boeing jets for less than what U.S. airlines are charged. This gives foreign airlines a competitive advantage over U.S. carriers in the global market. According to one estimate, it has cost U.S. airlines 7,500 jobs.]

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