The Exports-Imports Bank of the United States is a government agency that looks to extend credit to foreign corporations in order to allow for these foreign firms to purchase goods or services from American Firms. Currently there is a battle between Delta Airlines, Boeing and the Ex-Im bank. Delta states that it is suffering because foreign airlines are using the Ex-Im bank in order to reduce their borrowing and therefore lowering the price of tickets on routes that compete with Delta. On the other side of the story, Boeing relies on the Ex-Im bank to receive payment on numerous aircraft from foreign airliners. As a result both have engaged in serious lobbying which has raised many questions surrounding the Ex-Im bank. Delta recently had a lawsuit shot down on the subject.
With all of this commotion many have seen the Ex-Im bank as a form of crony capitalism as it seems many are favoring Boeing over Delta due to Boeing's exuberant spending on lobbying in comparison to Delta's. Congressmen Paul Ryan is calling for the bank to be allowed to expire on July 1st without a renewal as he also believes it is a form of crony capitalism which the United States should not engage in.
Source: http://www.nytimes.com/2015/04/07/business/boeing-delta-air-lines-export-import-bank.html
2 comments:
The concept of the Ex-Im bank makes sense and seems logical. However, it also seems to present situations that will inevitably produce a winner and a loser, which will cause constant conflict. The purpose is to help domestic business, but if helping one company requires hurting another, it defeats the purpose. With knowing little about the entirety of the situation, I think allowing the bank to expire may be the best idea.
It's interesting that this comes at a time when airfares abroad seem to be hitting the lowest rates they've been at for awhile. I agree with Paul Ryan's sentiments on this but am hesitant to support one way or the other fully when crony capitalism is brought up, especially by a Congressman...
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