Export-Import Bank

General Electric Should Stop Bullying Congress Over the Ex-Im Bank

Let GE whine. The company doesn't need a subsidy.

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Bullying
Dreamstime

Merriam-Webster's definition of a bully is: "a blustering browbeating person; especially one habitually cruel to others who are weaker." Sound familiar, Congress? That's because this is what General Electric's Jeffrey Immelt has been doing to you for months, first by threatening to leave the country and withhold contributions and now by threatening to move jobs overseas as retaliation for the end of the Export-Import Bank of the United States.

In June, a revolt against the unhealthy marriage between the government and large corporations put the mother of all crony programs, the Ex-Im Bank, in liquidation. Being the second-largest beneficiary of the bank's largesse and one of the 10 mega-corporations collecting 64 percent of its overall activities, GE is upset. It wasted millions of dollars in lobbying, yet Congress still cut off its access to cheap loans.

A recent GE press release notes, "With no U.S. export financing available, GE has pursued non-U.S. options to meet customer requirements." The result, we are told, will be "500 GE jobs moving outside the U.S." Of those, 400 could move to France.

Don't be fooled. The idea that there is no export financing without Ex-Im is ludicrous. Over 98 percent of U.S. exports take place without any help from Ex-Im—proving that export financing is readily available. That's true for GE, too. As The Heritage Foundation's Diane Katz writes, "General Electric Capital Corporation holds assets of $499 billion (and) posted net income of $7 billion last year." She adds, "Lending to GE is a pretty safe bet considering that the company has a market cap of $255 billion and annual revenues of $149 billion." There is no reason that GE cannot continue to finance its customers as it has done for years.

Also, the jobs that GE claims could go to France because Ex-Im expired never existed in the first place. According to reports, those 400 jobs would be created by GE in France if GE's bids were to beat out the competition and if the French export credit agency were to subsidize the deals. Better yet, it is quite obvious that the French jobs have nothing to do with the demise of Ex-Im. As Tim Carney at The Washington Examiner reports, GE had already promised the French government that it would create 1,000 jobs there in exchange for approving a merger with French power giant Alstom. In other words, blaming Ex-Im for the possible job creation in France is disingenuous.

"The real story is that GE, along with Boeing and other top beneficiaries of the government bank, are trying to scare Americans into further subsidizing their hugely successful multinational operations," Katz rightfully notes.

There is nothing wrong with a U.S. company's creating jobs abroad, as it often improves its bottom line—which is to the advantage of American workers and the economy. What is problematic is that GE is using its merger with Alstom and its promise to create jobs in France as a political weapon against members of Congress to scare them into renewing Ex-Im. Lawmakers sensitive to this bullying should ask themselves whether GE would bring back all its foreign jobs if Ex-Im came back to life. Knowing that the answer is no should open their eyes to GE's real motives.

Lawmakers who think that "if only we revived Ex-Im, that would give an incentive to GE to create 400 jobs in the U.S. instead of France" should remember that protectionist policies in the name of job creation come at enormous cost. Even if the use of credit support is good for GE, it doesn't make it good for the country as a whole. Export subsidies boost the profits of the subsidized industries by shifting jobs, economic growth and capital from the non-subsidized ones. If the French government wants to hurt its economy by subsidizing GE, so be it—but this Congress should abstain. Besides, it's not Congress' job to artificially boost GE's profit, no matter how loudly the company complains.

Bullying is ugly no matter who does it. However, it's outrageous when it comes from massive companies that have it all but still want more at the expense of everyone else.

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15 responses to “General Electric Should Stop Bullying Congress Over the Ex-Im Bank

  1. They’re just sending our jerbz to France, to take advantage of the low taxes they done got there!

    1. If low taxes were that important to GE they should of backed the candidates pushing lower taxes instead of the SJWs. GE made it’s own bed.

    2. Jeffrey Immelt is one of the biggest pieces of shit in corporate America, and in general. He is a lousy CEO and an enemy of the United States. When the revolution comes, he needs to be herded into the line that will end up at the landfill.

      Seriously, this asshole is an affront to real capitalism.

  2. GE has backed every prog cause, sometimes brutally, now they expect their reward.

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  4. I love rubbing it in my Progressive friends faces that their hero, Elizabeth Warren supported the bank.

    1. But Rand Paul is against the Ex-Im bank, so it must be a good thing to have around.

  5. Read what ExIm bank actually does and how it’s funded. The bank makes money for the American taxpayer and encourages US-based jobs and exports. Probably one of the only profit centers the Federal government has.
    http://www.exim.gov/about/facts-about-ex-im-bank
    One important object of ExIm is to provide financing when the financial industry is unable or unwilling to provide it to the customers of the companies using the ExIm bank.
    The fact is, closing ExIm is another blow to US industry’s ability to sell and compete against foreign countries offering the same kinds of export financing.
    Saying that 98% of exports take place without financing from ExIm is meaningless. How many jobs are supported by the sale of big aircraft? How many by the sale of big gas or steam turbines? By big construction equipment? If you read what ExIm does, they finance the customers who want to buy aircraft, turbines, construction equipment, and other big ticket items that support jobs.
    And saying that companies like GE, Boeing and Caterpillar just want more is also meaningless. ExIm makes money for the Treasury through its activities. Why is it a good idea to shut down a profitable agency?

    And the jobs building those items getting exported – it should be obvious that jobs = tax revenue and the ability to put those dollars earned from those jobs back into the economy. This seems to be one issue where the needs of workers align nicely with the desires of the companies that employ them.

    1. I’m not sure that even the bankers entirely understand banking. From all the reading I’ve done on both sides of this, one thing is clear to me. It costs taxpayers NOTHING. This is not a subsidy. These are loans that are paid back reliably enough that it is self sustaining.

      1. I think the biggest problem people had is that it gave low interest loans mostly to corporations that didn’t need them. Though the SBA is another kind of corporate welfare, it is practically sacrosanct because it gives loans (relatively quickly) to actual startup or small businesses who would otherwise have trouble securing private financing.

        1. That’s Sez not you bass

      2. You obviously know jack shit about finance , dumbfuck.

    2. Part of the problem is that this is another case of the federal government picking winners and losers. Why does a juggernaut like GE need a goddamn thing from the government? Yet they get loans that I’m pretty certain I could not get, as I haven’t paid off people for access.

      If US businesses need an edge to be more competitive, maybe things like lower corporate tax rates, less regulation, etc. is the way to go. But then that would lower barriers to entry for those who don’t already have a seat at the table. And that can’t be allowed.

  6. See this infographic to see the real losses to the economy and jobs without ExIm.
    http://exportersforexim.org/lo…..companies/
    The article completely ignored all of these losses due to ExIm’s shutdown too.

    1. Ad how many jobs were lost as a result of the taxation that makes the EX-Im bank possible? How many jobs were lost as a result of the market inefficiencies caused by this meddling? We reject the export import bank because it is inherently immoral, not because we don’t think GE will lose a few dollars as a result of its demise

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