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WWL>Topics>>4-28-14 10:10am Garland: on corporate welfare

4-28-14 10:10am Garland: on corporate welfare

Apr 28, 2014|

Garland talks with Cameron Seward of the Heritage Foundation about whether American banking policies constitute corporate welfare.

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Automatically Generated Transcript (may not be 100% accurate)

Our little poll would take every day on whatever subject we're talking about we're called the W abuse Oprah and more opinion poll whereas. Is it okay with you that America against foreigners in foreign countries taxpayer money. 67%. Of these say no and -- profits at 33 persons. No problem. While we're basically talking about and we have expert. Come -- and scope was so you can. -- applies to -- understand what is all about. Apparently they're there as a bank could apparently you are subsidized by our money. That I think basically gives foreign. Foreigners to extra money to import stuff from America. And in some banks even within the country themselves. Littlest -- doubled its all about we -- harm than sure world where there's a program manager Heritage Foundation Cameron welcomed -- Over here is is that some bank. That -- say. Accompany me in the United States wants you -- is trying to. And we. The bureau of -- some money for us to do businessmen. -- -- -- -- So basically very did he get a little bit of background and I appreciate you give me -- time to come on top but this that they think it's very much one of the kind of inside the beltway thing that that folks that countryman -- -- aware and as you've been alluding to you know there's certainly. Implications for taxpayers. Throughout the country. In and that just again a little bit of background and his. The export import bank for four -- intimate as it's referred to shorthand. With that with the new deal programs needed. During the Roosevelt administration. It and debate provide loans and loan guarantees is wells capital. I think credit insurance to quote facility. US exports. -- this financing of course is -- by the full faith and credit of the US government a burden. Which is you mutual ultimately falls on the taxpayer to cover any losses that the bank in her. So. Yeah why are we talking about this now why is it wise it. Come to the forefront well beyond its. Being an issue for conservatives. It is it's it's coming up on the debate blah he could say that. In congress because the bank's charter. Is set to expire on September 30. And in -- up to congress either reauthorize the bank or or to let lapse in in conservatives in heritage. Where were or beating the drum on on having congress allowing the banks started to -- And this goes all the way back to the Roosevelt yeah. It does yes it was it was originally created in 1934. -- and made. An official it was incorporated 1934 and made official part of you kind of the US government and in 1945. And there and while the vote on media expiration loses scheduled to expire and September 30 2014. Right so yet. It -- the charter is reviewed every couple of years the western journalists write those that electrical was done in 2012. That this is now you know part of the last renewal this -- it's set to expire so. You know it's it's gonna come before congress. In any chance for conservatives again. Any gay conservatives in congress and concern cross country to reach out to the members. And tell him what's really going on with. Telling it to bad deal for her for the taxpayer. So important reading the information news that they and you -- the whole audience and give bullets air China. Wants to purchase some born chips. In two Kurds as a person. Purchases X and BankAmerica. Export import. Could -- chunk of the money after China were to de Paul Malone. With that taxpayers would have to pick up that. And who says that to -- and I ended. But look what should have been that it's a good idea for along time. And that's where. What's their what's your argument -- there must be. Song piece of board human that is worth the beating of its -- and please shouldn't Roosevelt. There's there's kind of two I'd like to focus on two main targets as of right arguments. I think that into mainland since it's against. Your listeners some more little bit more back problem that put it in the broader picture of what it really means. And -- to the American taxpayers so. Taxpayers on the hook for nearly 134. Billion dollars in bank deals -- -- currently stand all -- -- number. According to the bank's own inspector general. Improbably. Is is. Significantly underestimate because the sloppy record keeping by the banks so that. Did you see you 134 billion -- -- Which could be correct dress. So so it basically the overarching. Thing to take away from it and in effect you know a -- listeners. It took away one thing it's that the excellent bank hampers the free market. By taking private sectors. Private sector winners and losers. And so cute cute sayings to kind of argument for the bank that the first one or or folks that. It support the bank this is one of -- arguments as. Is it that it levels quote level the playing field for American firms that compete against foreign companies collecting government subsidies. So. However. I would counter that only 2.2 percent of US exports last year received -- fine thing. Meaning that about 90% of the American export refined it's about the -- help so you have to ask yourself who is this 2% in. You know this the kind of lucky 2% -- that hurt you it it often picked according to politically motivated criterion in fact. Experiences openly called solar in wind power projects a top priority. A -- where would you give to 2.2 percent. These are Dieter well publicly reported -- that it's so so we need the bank reports. On on it that it to congress. And and in both. Has been about abided by its own inspector general and also the Government Accountability Office. And those that are against us in there and -- group level playing field. -- -- that most of these corporations big enough to secure private financing anywhere in the world. But with ten they do that weren't leveled the playing field so. So we're talking right to -- the majority of this financing there were talking about it is Bennett. Being companies like Boeing Lockheed Marten in like that -- in in these these are huge massive. In. National companies it and so. The -- yet another argument is also that that until at least bank officials claim that. And bills. Gaps and find things said the 2.2 percent. That is provided by the bank that that that the gap that still been for. Risky investments that the market did not want to. Spain's that the private sector does not -- take on by itself and I would say well. -- if if there is this gap in their private sector does not want to take on this racecar than the folks in the private sector deem it too risky these these. 2.2 percent investment. Why are we that the American taxpayer would that bird and it's a free market that it's not a good deal I would tend to tend to -- the free market. On on it and risk at the valuation. I had -- -- some drugs we've been active in doing businesses. Where the veteran royal Russia and China but Cuba I thought I thought it was illegal to do business with Q. Well -- you know it's it's interesting to -- kind of at a roundabout way where where do these -- the benefits of this financing and up and certainly in the international market. Although that the Cubans might not be interactive. Beneficiary date. The way the aid to international markets are dates could -- could you know indirectly benefit. Down the road and so again this is just. You know beyond picking winners and losers. In the premarket distort -- in in the private sector and restarting its premarket you know there's also these in -- foreign relations concerns as well. So especially at that time. When where seeking to. -- reprimand. Russia for its actions and in Ukraine Crimea. It's kind of yet to question why there -- the recipients of of these beneficial. Financing. From from the American taxpayer. We have here fortunes it's a little bit at all so -- -- and and -- -- argument will respond border -- reduce spending some curious. And soon. When viewed when the economy collapses we vote talked about a million. No bankers know Wall Street people were named when -- overcharge now god. HSBC bank Wachovia three on the back. Charged with -- laundering terrorist money in the billions of dollars of drug money. Prone to Mexican cartel. They were following -- three years of being -- to nobody and nobody goes to. And we see things like this were certain companies given our taxpayer dollars. To work overseas. And make profits and we end up and holding them act. I think I'm pretty conservative movement coach moved to the school matters. But who trusts and. Well I think and I am really glad you brought that out because it is really. The broader picture of accident that it's it's just one. Kind of puzzle that permeates our entire economy. You know again DP government picking winners and losers in the private sector it. It's it's an accident. It's in the energy market it's it's all over it. Think conservative is that really kind of something that conservatives can take not a. Especially fiscal conservatives that they can take this -- dismantled into cronyism. And really get government now. Out of picking winners and losers and picking and political favorites. All of which -- is a great example of that. And in this scenes. To fit that description of corporate welfare and -- mentioned that. President Obama described it that -- in 2000 they knew was still candidate nothing you guys there too. Right -- absolutely in in that's a good point to make is that a candidate Obama then candidate Obama. Pointed out that that they should be discontinued the export import bank and you know again kind of going back to that he didn't. Argument bank officials claim that -- and so gaps in financing however. It's important point out and I want to listeners to realize that US export. Hit the US exports. Hit a record high 2.2 1000000000002 point two trillion that's a record in 2013 that's up from one point fortunately five years ago. So where is this gap I don't see it anywhere where heading record highs. And initiatives into these arguments continue. To kind of collapse when she'd dig down into it and really -- -- the motivation isn't another. Kind of argument for this is job creation. Folks say that -- this kind of giving the financing creates jobs. Here in the US but. He didn't that it. -- reports that are given are are based on extrapolation from national data it's not counted according to one project turned out there. And the figures don't differentiate between full time part time and seasonal employment so again kind of taking down and at this stuff. It's really not the case that these proponents of this bank are are trying to make. Oh lord of the troops is this thing going and we don't September through. Well I think there's you know there's some real there's some real strength building. Especially conservatives in the congress you know there's a lot of folks not just parentage but the but other conservative organizations. Really showing it. For what it. Really trying to bring light to this -- again in the kind of broader picture of cronyism crony capitalism. And you know what's important. As congress takes this. -- and as her listeners -- hopefully continue to start following burger will start following the debate after you know here in this discussion here. Is. It's important to keep in mind proposals so folks will come out and dale we just need to reform act. -- reforming tax it and it reforming its operations -- forming operation of the of the export import bank. Meet would be nearly tripping around the edges of a bad idea. And the core problems with the banks in this market distorting loans and politically favored companies will pursue it. Until accident authorization -- allowed to inspire expire completely. -- until that the bank is it is is not authorized to issue anymore. We have to break for news and acute you know the ten minute chat so I come back Cameron afterward. Program manager earth to its foundation -- you'll be. We're thinking about something good number of conservative. Organizations. Country concerned about it something called X and bank America's export import bank the -- I understand did have some foreign country even Cha and London in some -- they've been through bill and the Cuban laws. They -- -- some. American product like Mortimer planes weaken linking them the money to do it. -- if that portico group for some reason doesn't payback. We are on the hook for it. And the boards and told us about the sort of the Heritage Foundation retirements -- Program manager heritage foundation. Of -- -- weren't good. One of things that the fascinates -- about Washington. Or we have a president. As a candidate and I guess is president described as old bear. Those corporate welfare. We have viewed the beat conservative. Heritage Foundation. Saying the same thing to you -- thing. If liberals and conservatives finally agree on at least one thing would get something done ball border apply and over the figures have done the show. They're above members of our delegation or. This senators -- congressman for of the State's. And we would talk on. A tough issue and all was suitable or you compromise at all and both sides always suited me. Well what a likable kid like a pat me on the head and say. -- -- blow up would you violate your basic beliefs. You're you do kitco. Watering. I don't what you build the foundation of your beliefs on. And always two bullets in Tripoli. To me that means gridlock. And that seems to -- No dependency would be that is what we. If this is the issues and and you know room. Organization. And the president. But the United States and I would assume some of this liberal county board. Agree. That this was corporate welfare. How resilient they get -- about it. Well the we're hoping it -- as the president's sticks with what would he said. On the campaign trail in 2008. That this does need to be done away with king gave his blessing to you have the bank's charter laps civility and he -- his butt in the congress and support to congress to have the to make the decision to have the collapse. It is important to keep in mind that kind of you know again we're talking about which companies are who benefits from this rather you know what -- who were the major beneficiaries. And again you know we're we're talking about companies like Lockheed Martin talked about companies like Boeing or talking about companies. Like that shall which is that construction engineering firm that was ranked by Forbes is the fourth largest privately held company by revenue. Cities are being. Big companies their their profitable companies. And you know what would it. So they're gonna fight for the they're gonna fight to continue to get these benefits and that we're gonna be a lot of effort on their part as far as lobbying. Lobbying members of congress as we get. Closer to the September 30 deadline so it's gonna be an uphill struggle for four conservatives that they usually is again. These special interest and that wanna continue to he. The benefits flow to them. Help me on this so naive when it comes to Washington. -- if the president announces corporate world order conservatives think this is corporate welfare. As a lobbyist. Use as a ply board to keep this thing and please since 1930. War in Roosevelt's. Our money. -- the words are viewed don't keep. Going along with Leo and as an elegant but the -- campaign right. You went one part of course and who were were talking aboard corporate welfare. The book so it's liberals and conservatives. -- group when flight to accurate. A poll was -- and of course in today's media unit were no reports from reading -- come from New York time too liberal organization so maybe it's -- by. That's what they claim. -- welfare subsidy. For I would play and they explain exactly that now. Welfare subsidies. Or got this started well. His way to encourage homeowners in the middle class -- it's been extended to beach owns in -- Well for subsidies for hedge funds and private equity they get something called carried interest that it will words are actually. Welfare subsidies for America's biggest thing. Lord's will for subsidies for American corporation from cities counties and states. -- Aren't conservatives. And liberal exploiting this. Well you know it's it's interesting it. You again. And I think as I alluded to before this overarching. Issue of of crony capitalism cronyism. In the premarket that the termination of not picking winners and losers in the premarket by the government. Is in in a very much manifested in in the tax code. It's manifested and things like the export import bank and it is really honestly you know. I would encourage your listeners to kind of keep their eyes out for this this is something that's the conservatives certainly heritage continuing. To beat the drum on. -- continuing to be an issue. To which they take. To task many folks that that claim to -- To be free marketers. Even you know the president -- with his own comments saying this is. The export import bank is that for business and we need to do away with it so. You know did its common sense than in -- -- hopefully have. Been able to -- Pique the interest of your listeners today on on what the issues are really drilled that into because this isn't what you year. In the real facts are now which you hear or or you know -- Put an explanation of the facts rather analogy here -- for the proponents of these programs. And it's important again. As the debate continues to evolve. And continues to you to go forward. On the reauthorization of the export import bank this -- that. You know -- to the bank pat it's been reported as sloppy record keeping and in a lot can be done to clean it up -- and you'll see folks pushing for that but that's not the answer here at the answer is to let it lapse. And to let it fade away. And in data into this state into oblivion. In in get it out of the way of of the free market. One final -- and heritage through that fighting the subsidies for private plane yards heritage amino hedge -- Well I'd I'd I'd I would do. We're fighting cronyism at all levels. And we're trying to bring not polite to the American people analyze this step is very much buried down. In in the light is no option -- And so that's who we try to do every -- really drove down into this stuff. In -- the tax. In in in really tell the story of what's going on in. You can check out are our in depth research on things like the export import bank on. On heritage dot org and also look to our blog foundry dot org which lays out. Kind of hot issues and we addressed those mistakes as they come off so I think that's into places that folks wanna get educated on it that they can start there. Camera and I appreciated to tell -- new promotion have agreed to -- much. Cameron -- program manager Heritage Foundation. Will continue what do you think when you hear this. What your conservative liberal. Some consistency and corporate well proceedings would be everywhere -- the lights seem to be selective. Where -- wrong. 2001. Heats up.

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