The Moral Hazard of the Export-Import Bank - Privatized Profits & Socialized Risk

Communities Digital News ^ | October 1, 2014 | Richard Cameron

[Noremac]

There are a lot of solid reasons why federal programs like the Export-Import (EX-IM) Bank, should be terminated. I cover the majority of those reasons in the report I just filed on Communities Digital News.

http://www.commdiginews.com/business-2/moral-hazard-at-the-export-import-bank-private-gain-vs-social-risk-26916/

Issues like questions of proper management, potential for fraud related to insider influence, unintended consequences of disruption of domestic markets, risk related to the volatility of the world economy, are all among them.

Those are legitimate concerns and have demonstrated themselves to be problems. Above them all, and foremost is the essential consideration of legitimacy. The Ex-Im bank was spawned in illicit circumstances. Most of us are not aware that America's largest industrialists, in cooperation with Wall Street banking firms, rescued the Bolsheviks and the nascent Soviet Union from economic catastrophe from the very inception of the Russian revolution.

It's not something taught in grade school textbooks or mentioned by college professors. Doing so would turn the conventional theories of the history of U.S. foreign policy and the essential meaning of the 'Cold War' on its head. It would open up a can of worms that certain interests don't want opened and require explanations that amount to 'inconvenient truths'. Also selectively omitted was the established fact that these same industrialists and bankers built and financed the factories in 'Communist' Russia that were the foundation of Lenin's initial 'Five Year Plan' and all of the successive 'Five Year Plans'.

What does this have to do with the Export-Import bank? The Export-Import bank was established in 1934 under an executive order by President Franklin D. Roosevelt in a blatant effort to legitimize the already robust activity by American capitalists engaged in constructing the economic pillars of a nation, the U.S.S.R., whose leaders ostensibly proclaimed their intention to destroy capitalism.

If developing the infrastructure of an authoritarian state ideologically opposed to free markets, property rights and freedom wasn't an intentionally suicidal move – and we can safely assume it wasn't, because these bankers and manufacturers weren't stupid men, then what was the game plan? I'll let you connect the dots for yourself on that. It's a subject with disturbing and wide ranging implications that deserves a separate examination of its own. But it does suggest the impulse leading to the formal implementation of Ex-Im.

The other, and really the main problem with Ex-Im, is that it permits the federal government to involve itself in an activity that the Constitution doesn't give it authority to do. There is no provision in the Constitution for unilaterally obligating citizens (taxpayers) to function as underwriters of loans to any entity, the least of which, foreign companies and governments.

Ex-Im has loaned millions to Hamas and Turkey, our NATO “ally”, which has colluded with the present administration in organizing, training and equipping the very Islamic State forces that we are now trying to hit with air strikes in Iraq and Syria. Sound insane? It is.

http://www.commdiginews.com/business-2/moral-hazard-at-the-export-import-bank-private-gain-vs-social-risk-26916/