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Posts tagged "Economy"

h/t: NBCNews.com

h/t: Bryce Covert at Think Progress Economy

h/t: Monica Potts at The Daily Beast

crooksandliars:

Fox Cheerleads U.S. Companies Moving Overseas - Because Obama

In his weekend address, President Obama denounced “tax inversions,” i.e. a loophole that allows U.S. corporations to avoid taxes by moving overseas. “They’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share,” Obama said.

Fox Business’ Stuart Varney joined the Curvy Couch Crew and right away scoffed at President Obama’s stance as little more than an election-year ploy to make himself look good by painting corporations as unpatriotic. Any loyal Fox viewer’s blood probably started boiling already. Even if those corporations are behaving - well, unpatriotically.

But just in case, Varney and company went the extra mile to make you think that if Obama wasn’t such a terrible president, those poor companies wouldn’t have to take their all-time-high profits out of the country to avoid taxes.

VARNEY: Now, the president wants to put a fence around America, stop anybody leaving, that’s what he wants to do. Instead of encouraging them to stay.

Co-host Steve Doocy just happened to have at hand a graphic showing where businesses are “not putting their money” due to high corporate rates. The country just below the U.S., ranked third, was Japan. Yet moments later, as he read a list of countries that have left the U.S., he announced with indignation that Jim Beam has gone to Japan. A quick Google search indicates the company was bought out by Suntory of Japan, not that the company fled to avoid taxes.

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thepoliticalfreakshow:

Georgia, Meet Mitt Romney Lite

When Mitt Romney got pummeled in the 2012 election, the GOP was forced to reboot and consider how to attract candidates who can be more competitive. In Georgia, the GOP’s conclusion was to run an elitist millionaire with a checkered business record and an inability to understand the concerns of working families. Sound familiar?

But don’t worry, David Perdue isn’t a total clone of Mitt Romney. While Romney was serving as Governor of Massachusetts, for instance, David Perdue was busy tanking a company called Pillowtex, leaving its 7,500 workers out to dry and pocketing a cool $3.1 million in the process. It wasn’t the first batch of American jobsthat was killed under Perdue’s stewardship.

From 1994 to 1998, Perdue served as a senior vice-president at Haggar. Under his leadership, Haggar implemented an enormous shift of company employment and operations overseas. Thousands of American workers lost their jobs, and nearly 50% of the company’s domestic workforce was laid off, but Perdue brushed it off as being “in the best interest of the company.”

To wrap up his tidy business career, the Equal Employment Opportunity Commission found that while Perdue was the CEO of Dollar General, female store managers were discriminated against and paid less than men. Dollar General ended up paying $15.5 million toward the members of the class action lawsuit, and in a separate case, it was forced to pay nearly $74,000 to a former employee after a district court found that she was fired for taking time off under the Family Medical Leave Act.

So this is David Perdue’s business career–the one that he claims qualifies him to be a United States Senator. And he feels very qualified indeed: he previously attacked Karen Handel for being just a “high school graduate,” going on to say, “I’m sorry, but these issues are so much broader, so complex. There’s only one candidate in this race that’s ever lived outside the United States.”

The worst part is this: from what little glimpse we have into Perdue’s stated policy positions, they are exactly as you would expect from his self-interested business career. Massive tax cuts for wealthy folks like himself and corporations, while increasing the tax burden on working families. Opposition to raising the minimum wage. Opposition to extending unemployment insurance for job seekers. Cutting Social Security and Medicarebenefits for seniors.

David Perdue has had it pretty good. And he wants to make life even better for himself at the expense of Georgia’s working families.

Background

MINIMUM WAGE

Perdue Opposed Raising The Federal Minimum Wage, And Said Obama’s Push To Raise Minimum Wage Was A Sign Of Broader Economic Problems. According to the Atlanta Journal-Constitution, “Georgia’s five best-known Republican Senate candidates voiced unequivocal opposition Tuesday to raising the minimum wage, striking a clear contrast from Democratic hopefuls in what could be a preview of a general election clash. The five contenders blasted President Barack Obama’s call to raise the $7.25 hourly minimum wage to $10.10 as counterproductive, dishing out red meat to a sympathetic crowd at a National Federation of Independent Business forum. […] Former Fortune 500 executive David Perdue said Obama’s push is a broader sign of mounting economic problems.” [Atlanta Journal-Constitution, 2/19/14]
All Five Republican Candidates For Senate Opposed Raising Minimum Wage. During the National Federation of Independent Businesses Georgia Small Business day forum, all five Republican candidates for Senate indicated they opposed raising the minimum wage. [National Federation of Independent Businesses Georgia Small Business Day, 2/18/14]

UNEMPLOYMENT INSURANCE

Perdue Opposed Extending Unemployment Insurance. According to the Atlanta Journal-Constitution, “Six of the leading GOP hopefuls each vowed to reject calls to extend unemployment insurance and vote against a comprehensive immigration overhaul gelling in the Senate.” [Atlanta Journal-Constitution, 1/28/14]
All Five Republican Candidates For Senate Opposed Extending Federal Unemployment Benefits.During the Mayor’s Day Senate Forum in Atlanta, all five Republican candidates for Senate raised their hand to indicate they opposed extending federal unemployment benefits. [Mayor’s Day Senate Forum, 1/27/14]

TAXES

Perdue Supported A National Sales Tax That Would Also Apply To Online Purchases, As A Replacement For The Federal Income Tax. According to Northwest Georgia News, “However, Perdue did say during a forum that he supports a national sales tax to replace the income tax and that it should apply to online purchases. Dickey argues that is not a new tax and that it wouldn’t amount to an increase the way Perdue wants to structure it.” [Northwest Georgia News, 6/19/14]

Video: Perdue Supported The Fair Tax. According to Hayden Collins’ interview with David Perdue, Perdue said, “Clearly, a Fair Tax in my mind, is a better solution than what we have now. And I think it warrants an active debate; I would support that debate over what we have now. And to be very direct, if I had a choice between a Fair Tax and what we have now, I would absolutely vote for a Fair Tax. I think there may be some hybrids in there that actually help us incent the economy in ways that maybe a Fair Tax we need to improve on, but clearly, it is absolutely a better alternative than what we have now.” [Hayden Collins Radio Program Interview with David Perdue, Accessed 9/29/13]

  • Critics Said Fair Tax Would Primarily Benefit The Rich. According to the Los Angeles Times, “Even with the subsidies to poor families, critics argue, the tax would primarily benefit the rich because they save the largest share of their income.” [Los Angeles Times, 12/24/07]

SOCIAL SECURITY & MEDICARE

Perdue Supported Cutting Social Security And Medicare Benefits For Future Beneficiaries. According to the Marietta Daily Journal, “Perdue’s solution is honoring the obligations to anyone already receiving Social Security benefits, but changing the benefits for anyone coming into the workforce. ‘Their deal is going to have to be different,’ he said. Perdue would make the same changes to Medicare.” [Marietta Daily Journal, 2/16/14]

BUSINESS RECORD

Pillowtex

Pillowtex’s Revenues And Stock Price Dropped Dramatically Under Perdue

Under Perdue, Pillowtex Lost $27.6 Million Over Seven Months And Declined To The Verge Of Bankruptcy. According to the Tennessean, “Pillowtex proceeded to lose $27.6 million over the past seven months of 2002 and failed to meet certain requirements with lenders, bringing the company to the verge of another bankruptcy filing.” [Tennessean, 4/4/03]

Under Perdue, Pillowtex’s Stock Price Fell From $7.50 To $0.18. According to the Tennessean, “Its stock price has fallen dramatically as well, from approximately $7.50 when Perdue joined to 18 cents when Pillowtex announced his resignation on March 18.” [Tennessean, 4/4/03]

SunTrust Analyst Patrick McKeever: “[Perdue’s] Eight Months At Pillowtex Were Marked By A Further Deterioration In (Financial) Fundamentals And A Plummeting Stock.” According to the Tennessean, “The ult circumstances at Pillowtex raised the eyebrows of Dollar General analyst Patrick McKeever. ‘While Mr. Perdue spent four successful years at Reebok before Pillowtex and has an extensive background in consumer products and consulting, his eight months at Pillowtex were marked by a further deterioration in (financial) fundamentals and a plummeting stock,’ said McKeever, with SunTrust Equitable Securities.” [Tennessean, 4/4/03]

Pillowtex Employees Accused Perdue Of Being An Absentee CEO As The Company Failed

Pillowtex Workers Accused Perdue Of “Disappearing” While The Firm Was Failing. According to the Atlanta Journal-Constitution, “As he attempted to drum up a potential buyer for the plant, some company workers accused him of disappearing. The Charlotte Observer reported that some staffers referred to him as ‘Oz’ in a nod to the elusive wizard.” [Atlanta Journal-Constitution, 8/9/13]

  • Perdue Spent Much Of His Time At Pillowtex Traveling The World In Search Of A Buyer.According to the Atlanta Journal-Constitution, “The experience still weighs heavy on Perdue. Speaking publicly for the first time about his tenure there, he said he appealed to the company’s owners at Oaktree Capital to amp up their investment but that his request was declined. He spent much of his time at the firm’s helm traveling the globe seeking a buyer.” [Atlanta Journal-Constitution, 8/9/13]
  • Perdue’s Replacement At Pillowtex Said “I Have Been Effectively Operating As CEO” For Some Time. According to HFN, “Gannaway said Perdue has accepted another job outside the home textiles business and added that ‘I have been effectively operating as CEO’ for some time.” [HFN, 3/24/03]

Perdue Did Not Attend The Textiles Market As Pillowtex CEO, Despite Pillowtex Being A Textile Company. According to HFN, “Perdue and Gannaway, both textiles industry outsiders, joined Pillowtex right as the company was exiting bankruptcy proceedings last year. Perdue kept a very low trade profile and in fact never attended the textiles market last fall.” [HFN, 3/24/03]

Perdue Resigned In March 2003, After Seven Months On The Job. According to the Atlanta Journal-Constitution, “He resigned in March 2003 after seven months on the job.” [Atlanta Journal-Constitution, 8/9/13]

Perdue Received Over $1 Million In Compensation From Pillowtex In January 2003, Two Months Before Leaving The Company And While He May Have Been Negotiating With Dollar General

Perdue Received Two Compensation Payments In January 2003 Totaling Over $1 Million

Perdue Received $312,500 From Pillowtex In January Of 2003, Two Months Before Leaving The Company, “As A Bonus For His Services During 2002.” According to Pillowtex’s corporate filings with the SEC, Perdue received $312,500 “As A Bonus For His Services During 2002.” [SEC Corporate Filings for Pillowtex, “Form 10-K - Annual report (Section 13 and 15(d), not S-K Item 405),” 3/28/2003]

Perdue’s Compensation Included “A Grossed-Up Cash Payment In The Amount Of $700,677,” Paid In January Of 2003, “To Be Applied Towards The Tax Obligation Of Mr. Perdue Resulting From The Issuance Of 101,215 Shares Of Common Stock As Part Of His Signing Bonus.” According to Pillowtex’s corporate filings with the SEC, Perdue’s additional compensation included $700,677 which was “to be applied towards the tax obligation of Mr. Perdue resulting from the issuance of 101,215 shares of Common Stock as part of his signing bonus.” [SEC Corporate Filings for Pillowtex, “Form 10-K - Annual report (Section 13 and 15(d), not S-K Item 405),” 3/28/2003]

July 2003: Pillowtex Filed For Bankruptcy. According to Daily Deal/The Deal, “The company sold the bulk of its operations to GGST LLC for $128 million in cash in an October 2003 auction. It sold the rest of its assets in multiple follow-up auctions. Pillowtex filed on July 30, 2003, one year and two months after emerging from its first bankruptcy.” [Daily Deal/The Deal, 4/27/05]

July 2003: Four Months After Perdue Left Pillowtex, The Company “Abruptly Closed” And Laid Off 7,650 Employees Nationwide. According to the Charlotte Observer, “Perdue was CEO of the former Kannapolis textile giant from mid-2002 to March 2003. Pillowtex abruptly closed in July 2003, laying off 7,650 people nationwide, including more than 4,000 in Cabarrus and Rowan counties — part of the largest single job loss in the history of North Carolina and the textile industry.” [Charlotte Observer, 7/27/13]

  • Pillowtex Layoffs Left 4,800 North Carolina Workers Unemployed, The Largest Permanent Layoff In State History. According to the Independent Tribune, “Pillowtex ceased operations in July 2003. Plant One in Kannapolis, the former Cannon Mills, had been in operation since 1906. About 4,800 people were laid off — the largest permanent layoff in North Carolina’s history. The Pillowtex closing slammed the economy of Kannapolis and Cabarrus County, since it was the largest economic engine in the county at the time. [Independent Tribune, 5/6/10]

Salisbury Post: Pillowtex Was “Duped” By Perdue

Salisbury Post Editorial: Pillowtex Was “Duped” By Perdue, Believing He Had A “Midas Touch” Before His Departure. In an editorial, the Salisbury Post wrote: “A search firm helped the Pillowtex board lure him away from Reebok International to turn things around at the Kannapolis company and make the most of its brands. Anyone who has followed Pillowtex knows the story. Perdue took office July 1, 2002, and left in March 2003 ‘to pursue other interests.’ Within two weeks, Dollar General announced it had ended its six-month search for a top executive by choosing Perdue as its new CEO. Pillowtex directors must have thought they were investing in a solution, that Perdue had a Midas touch. They were dazzled and maybe dazed, and in the end they appear to have been duped. Decisions like this help explain what went wrong at Pillowtex, and why thousands of former employees are now looking for a job.” [Salisbury Post via Associated Press, 10/22/03]

Charlotte Observer: Perdue “Made Critical Miscalculations”

Charlotte Observer: Perdue “Made Critical Miscalculations And Missed Opportunities To Combat The Growing Import Problem” In Pillowtex’s Final Years According to the Charlotte Observer, “After its collapse, company leaders and politicians were quick to blame pressure from low-cost imports for its demise. But Perdue and three other men who ran the company in its final years made critical miscalculations and missed opportunities to combat the growing import problem, an Observer investigation found.” [Charlotte Observer, 7/27/13]

Industry Analysts: “Shortsightedness And Management Mistakes” Caused Pillowtex’s Collapse

Former Company Executives And Industry Observers Pointed To Pillowtex’s Sluggish Adaptation To A Changing Textile Market, As Well As Irresponsible Acquisitions, As The Cause Of Its Collapse.According to the News & Record, “In the weeks since Pillowtex collapsed, everyone from Gov. Mike Easley and Sen. John Edwards to the laid-off workers in the unemployment lines seem to have agreed on one thing: it wasChina’s fault. Pillowtex, the thinking goes, was simply the latest in a long line of companies to succumb to the onslaught of cheap imports from countries with a fraction of U.S. labor costs. But, former company executives and industry observers, contacted by the News & Record, say foreign trade was just one element in a broader trend of shortsightedness and management mistakes that eventually led to the downfall of one of the country’s largest textile companies. Management that was slow to adapt to changes in the home textile industry, a series of costly acquisitions that created huge debt but little profit, and a weak strategy exiting the company’s first bankruptcy, in 2002, all led to Pillowtex’s demise, executives and observers said.” [News & Record, 9/28/03]

Kingston Attacked Perdue For Pillowtex Record And Claimed He “Mismanaged Pillowtex.” According to the Charlotte Observer, “Kingston later ran an ad with a young child named ‘Davey’ in a full diaper, stuffing his face with cake as a narrator intoned, ‘Perdue chewed up businesses. Eight thousand jobs were lost David Perdue. Something doesn’t smell right. …’ The ad, and another one making similar claims about Perdue ‘mismanaging Pillowtex,’ were faulted by FactCheck.org and PolitiFact Georgia, The Atlanta Journal-Constitution’s independent, fact-checking arm, for inaccuracies.” [Charlotte Observer, 7/21/14]

Kingston Said Perdue Took A Golden Parachute “On The Way Out The Door.” According to the Florida Times-Union, “He focused his sights on Perdue, a political newcomer running on his strengths as a chief executive of companies like Reebok and Dollar General. Kingston, though, zeroed in on Perdue’s seven-month tenure at the head of Pillowtex, a North Carolina textile firm with shaky finances that wound up closing with 4,000 workers losing their jobs in 2003. That was at a time when any textile company that hadn’t failed or moved overseas was struggling. ‘We have one candidate who has a long history of laying off people, hundreds — indeed, thousands of jobs — and taking golden parachutes on the way out the door,’ Kingston said. ‘Well, that doesn’t create jobs and wealth in Georgia.’” [Florida Times-Union, 5/2/14]

Haggar

Perdue Served As A Senior Vice-President At Haggar Between 1994 And 1998. According to MSNBC, “When Perdue arrived at Haggar Clothing Co. in 1994, the historic menswear company was struggling. Revenues were down, old reliable products like suits were in decline, and competitors like Levi’s were muscling in on their department store sales. As senior vice president, Perdue was in charge of international operations at Haggar and later domestic operations as well.” [MSNBC, 4/18/14]

  • Perdue Oversaw Haggar’s “International Operations” As Senior Vice-President, As Well As Domestic Operations Later In His Tenure. According to MSNBC, “When Perdue arrived at Haggar Clothing Co. in 1994, the historic menswear company was struggling. Revenues were down, old reliable products like suits were in decline, and competitors like Levi’s were muscling in on their department store sales. As senior vice president, Perdue was in charge of international operations at Haggar and later domestic operations as well.” [MSNBC, 4/18/14]

Perdue Was Hired To Oversee “All Haggar Manufacturing Outside Of The United States.” According to Southwest Newswire, “Perdue will be responsible for all Haggar manufacturing outside the United States, which currently accounts for over 60 percent of production, including both company owned facilities and contractors.” [Southwest Newswire, 8/30/94]

Under Perdue’s Leadership, Haggar Closed Factories In America And Outsourced Production Overseas “Where Labor Was Cheap And Regulations Were Less Restrictive.” According to MSNBC, “When Perdue arrived at Haggar Clothing Co. in 1994, the historic menswear company was struggling. Revenues were down, old reliable products like suits were in decline, and competitors like Levi’s were muscling in on their department store sales. As senior vice president, Perdue was in charge of international operations at Haggar and later domestic operations as well. Under his watch, the company did what so many clothing manufacturers did at the time: closed down factory lines in America and outsourced production overseas where labor was cheap and regulations were less restrictive.” [MSNBC, 4/18/14]

Perdue Said Haggar’s Shift From U.S. Operations To Operations Overseas Was In The Company’s Best Interests. According to MSNBC, “In an interview, Perdue said he and his colleagues approached the factory closings with a ‘social conscience,’ but determined the move abroad was in the best interest of the company.” [MSNBC, 4/18/14]

  • Perdue Said “The Mexican Product Had An Advantage” Over A Product Made In South Texas, Because The “Cost Sheet” Of A Mexican Product Was Less Expensive. According to MSNBC, “‘We very definitely looked at trying to maintain as much volume as we could [in America],’ Perdue told MSNBC. ‘The problem was if you looked at the cost sheet of a product made in Mexico versus a product made in South Texas the Mexican product had an advantage.’” [MSNBC, 4/18/14]
  • Perdue Claimed That Haggar’s “Shift To Factories Abroad” Was Unavoidable Due To Declining Sales For American-Made Products, Cheap Clothing From Competitors, And NAFTA. According to MSNBC, “Perdue said Haggar’s shift to factories abroad was the unavoidable result of several factors, including declining sales for some of the company’s American-made products, increasingly cheap clothing from rivals who had outsourced production earlier, and the 1994 ratification of NAFTA, which reduced duties on Mexican-imported goods. ‘We fundamentally restructured a company for survival,’ Perdue said. ‘Another way to look at this is we saved a couple thousand jobs.’” [MSNBC, 4/18/14]
  • Perdue Argued That Haggar’s Outsourcing Represented A “Fundamental Restructuring” Of The Company In Order To Survive, And Therefore “Saved A Couple Thousand Jobs.” According to MSNBC, “Perdue said Haggar’s shift to factories abroad was the unavoidable result of several factors, including declining sales for some of the company’s American-made products, increasingly cheap clothing from rivals who had outsourced production earlier, and the 1994 ratification of NAFTA, which reduced duties on Mexican-imported goods. ‘We fundamentally restructured a company for survival,’ Perdue said. ‘Another way to look at this is we saved a couple thousand jobs.’” [MSNBC, 4/18/14]

Dollar General

In 2006, The Equal Employment Opportunity Commission Found That Female Store Managers At Dollar General Were Discriminated Against And Paid Less Than Similarly Situated Male Managers.According to Mother Jones, “But Perdue’s record on women’s issues—specifically, whether women are entitled to equal pay for equal work—is far from clean. In 2006, three years into Perdue’s four-plus years as Dollar General’s CEO, federal investigators at the Equal Employment Opportunity Commission found that female store managers who worked for the company he ran ‘were discriminated against,’ and ‘generally were paid less than similarly situated male managers performing duties requiring equal skill, effort, and responsibility.’” [Mother Jones, 5/21/14]

In 2007, Thousands Of Female Managers Joined A Class Action Wage Discrimination Lawsuit Against Dollar General. According to Mother Jones, “A year later, separate from that investigation, thousands of female managers who were paid less than their male counterparts joined a class action suit against the company—which Dollar General eventually settled, paying the women more than $15 million.” [Mother Jones, 5/21/14]

  • Dollar General Allegedly Set Up A Pay System That Permitted Stereotypes About Men And Women To Be Used In Judging Their Pay. According to Mother Jones, “‘Dollar General has set up a pay system which permits stereotypes about men and women to be used in judging their pay, performance, and salary needs,’ female Dollar General managers claimed in sworn statements. ‘This includes stereotypes about men being the breadwinner, head of the household, or just more deserving because they are men.’” [Mother Jones, 5/21/14]

The EEOC Issued Right-To-Sue Notices, Addressed To Perdue, Beginning In 2007. According to Mother Jones, “The EEOC, which must green-light pay discrimination lawsuits before they can proceed in federal court, began issuing right-to-sue notices addressed to Perdue beginning in 2007. Dollar General’s filings with the Securities and Exchange Commission for that year—Perdue’s last year with the company—stated, ‘The Company believes that the case is not appropriate for class or collective treatment and that its policies and practices comply with the Equal Pay Act and Title VII. The Company intends to vigorously defend the action.’” [Mother Jones, 5/21/14]

As Part Of A Settlement, Dollar General Paid $15.5 Million Towards A Fund For Members Of The Class And Millions More In Legal Fees. According to Mother Jones, “The next several years saw more failed attempts by Dollar General to convince the court to decertify the class. In early 2011, the company allowed the case to go to mediation. A year later, the court finalized Dollar General’s agreement to pay $15.5 million toward a fund for members of the class, $2.8 million for a claims administrator, and $3.25 million in attorneys’ fees. The company also committed to altering its employee compensation policies.” [Mother Jones,5/21/14]

Dollar General Sued For Firing Another Female Employee For Taking Time Off Under The Family Medical Leave Act. According to Mother Jones, “In another case, a district court forced Dollar General to pay nearly $74,000 to Martha Bryant, a diabetic employee it fired in 2004 for taking time off under the Family Medical Leave Act. Dollar General argued that the law does not prohibit retaliation against employees who take FMLA leave. Dollar General appealed to the US Court of Appeals for the Sixth Circuit, which upheld the district court’s judgment against Dollar General.” [Mother Jones, 5/21/14]

GOVERNMENT SHUTDOWN

Perdue Endorsed The Government Shutdown. According to the Atlanta Journal-Constitution, “Former Secretary of State Karen Handel has been running as a non-congressional candidate, but endorsed the shutdown and its aim. So did David Perdue, a former Dollar General chief executive, who has raised more cash than anyone in the GOP race but Kingston. Perdue reported $800,000 in contributions — plus $1 million out of his own pocket — raised as of Sept. 30.” [Atlanta Journal-Constitution, 10/20/13]

Perdue Opposed Bipartisan Deal To End Government Shutdown. According to the Associated Press, “All eight Republicans favor repeal of Obama’s health care overhaul. All oppose abortion rights. All three congressmen voted against the bipartisan deal to end the partial government shutdown last fall, and Perdue, Handel and the lesser-known candidates all say they’d have voted the same way.” [Associated Press, 1/27/14]

Video: Perdue Said That Shutting Down The Federal Government “Doesn’t Bother Me A Minute – But If You Want To Shut It Down, Shut It Down.” According to a speech by David Perdue at the Henry County GOP Meeting, “Shutting this government down doesn’t bother me a minute. But if you want to shut it down, shut it down. They didn’t do that. Second thing is, I don’t care what you do, you can’t play around by even backing into a failed threat of defaulting on the federal debt. Cannot do that. […] We can’t play around with that.” [Video – David Perdue Speech At Henry County GOP Meeting, 1/7/14]

thepoliticalfreakshow:

Congress is at the precipice of another ‘cliff’: The Export-Import Bank of the United States must be reauthorized by September, or it will have to close for the first time since it was created in 1934.

The fight over the bank is an esoteric one with confusing and shifting battle lines. While the Tea Party is currently pushing not to reauthorize the bank, a variety of ideological positions are coming into conflict. Now, after 80 years of largely uneventful reauthorization votes, there is a very real chance that the bank’s authority won’t be renewed.

This conflict might not seem relevant to the average person. But the fights over the Export-Import Bank have important implications about how trade policy should work in the 21st century. Here’s what you need to know to understand Congress’s latest battle:

What is the Export-Import Bank?

The ‘Ex-Im Bank,’ as it’s known, is a corporation owned entirely by the federal government. Technically located within the Executive Branch, but independently housed and operated by finance professionals, the bank’s mission is to boost American exports. To do that, it supplies various types of credit to U.S. businesses that need them to operate. Generally, the Ex-Im Bank supports transactions that private banks won’t finance, and that are guaranteed to support or create American jobs. The most common type of credit the bank supplies is loan guarantees (rather than outright cash lending) to foreign companies that buy things from U.S. businesses. By providing loan guarantees and other forms of indirect financing, the bank ensures that American exporters have customers who can pay to buy their goods.

The vast majority of the credit transactions the bank authorized in 2013 —89 percent — were in support of U.S. small businesses. But the vast majority of the dollar amount of credit authorized went to support much larger companies like Boeing, whose customers would otherwise not have bought so many of its planes. Still, small businesses who rely upon the bank for export insurance that private markets won’t provide say they would be left to shoulder the risk of losses should clients fail to pay.

The Ex-Im Bank costs taxpayers nothing, and actually returns revenue to the Treasury. The government turned a $1.057 billion profit on Ex-Im Bank activity last fiscal year. (Depending on which sort of accounting rules you go by, the bank will either make taxpayers $14 billion over the coming decade, cost them $2 billion, or perform somewhere in between.) The bank had a default rate below 0.25 percent last year on the various types of business credit it offers. Since it was created in the 1930s, it has an overall default rate below 2 percent.

Who wants to kill it?

The current push to block the bank’s reauthorization is coming fromhardline conservative groups like the Club for Growth and the Heritage Foundation. Both groups have pledged to use Ex-Im Bank reauthorization as a “key vote” in scoring the legislative records of lawmakers ahead of the midterm elections, and Americans for Prosperity has made similar threats. That pressure to oppose the bank from outside Congress is combining with the increasing ideological purity of the Republican Party within Congress to create a great deal of momentum against reauthorization.

When former Majority Leader and longtime supporter of Ex-Im reauthorization Eric Cantor (R-VA) lost his primary election, for example, and handed his seat to an unheralded Ayn Rand devotee and hardline supply-side ideologue who almost surely opposes the bank, the New York Times ran a front-page story on what Cantor’s loss meant for the bank and for American exports. “Eliminating the bank has become a conservative cause on par with repealing the Affordable Care Act,” the Times wrote. Cantor’s successor in the Majority Leader position, Kevin McCarthy, has announced that he opposes reauthorization of the bank.

What would happen if the Ex-Im Bank disappeared?

It’s tough to give a simple answer to that question, since the bank’s authorization has never been in serious jeopardy until now. But some numbers on the bank’s performance are instructive: Since the bank began calculating its impact on American jobs in 2010, it estimates that it has supported 1.2 million jobs in the country. The bank authorized a total of $27.3 billion in credit last year across more than 3,800 separate transactions, supporting a total of $37.4 billion worth of export sales by U.S. companies.

The evaporation of the support Ex-Im provides wouldn’t guarantee that all those jobs and all those business deals disappeared. But they would all be vulnerable. Since every other developed country in the world maintains some equivalent to the Ex-Im Bank to protect their own exporters, and voracious exporters like China are even more cutthroat than the Ex-Im Bank is allowed to be, it would become substantially more difficult for American companies to compete in the global marketplace.

The list of groups and individuals who have warned of economic consequences if the bank disappears includes the U.S. Chamber of Commerce, the National Association of Manufacturers, the White House, andTexas Gov. Rick Perry (R). Even Delta Airlines, which has long criticized the bank for putting domestic airlines at a disadvantage by helping foreign airlines to buy Boeing planes, has come around and indicated support for reauthorizing the bank.

How did the bank become political football?

Many different kinds of thinkers and analysts have wanted to end the Ex-Im Bank at one point or another in its nearly nine-decade history. Nobel Prize-winning economist and frequent progressive hero Paul Krugman opposes the bank in theory, but doesn’t want the bank wound down until the economy gets stronger. Fellow economist and liberal Dean Baker agrees that Ex-Im is primarily a protectionist entity that should not exist in a modern economic system. On the right, libertarian economists and free-market purists have long opposed the bank’s interference in the marketplace.

Some political institutions have been consistent in their ideological perspective on the bank, whether critical or supportive. But many of the individual politicians who determine the bank’s fate, on all sides of the political spectrum, have shifted according to the prevailing winds. Democrats in Congress and in the press, for example, derided the bank for decades for its role in propping up a variety of transactions that offended their values, including infrastructure deals that helped dictators to fossil fuel contracts. Meanwhile, since the vast majority of the monetary value of the bank’s work goes to giant corporations, politicians have repeatedly attacked Ex-Im as a fountain of corporate welfare. (Bank officials are quick to point out that the vast majority of the businesses for whom it secures credit are small companies.) The broad, though changing, opposition to the bank provides one of the clearest indicators of the bank’s precarious position today.

What are the chances the Ex-Im Bank really doesn’t get reauthorized?

Potentially imposing grievous harm both to a signature American manufacturer like Boeing and to an institution that has supported hundreds of thousands of jobs each year at businesses large and small alike without costing taxpayers anything may seem like enough to keep the Ex-Im Bank safe. After all, the bank’s value for protecting American business interests has always been enough in the past, and supporters today rightly note that other countries that maintain similar institutions to support their own industrial base are not going to lay down their economic arms if Ex-Im evaporates.

But it’s hard to see where the reauthorization votes will come from. Nearly 100 House Republicans voted “no” when the bank was up for reauthorization two years ago, and the pressure on their colleagues to join the opposition is much stronger now that prominent conservative organizations have promised to use the issue as a primary determinant of which candidates get their support during this November’s election. With 41 of his members backing the bank publicly, Speaker John Boehner (R-OH) could certainly still get a reauthorization bill passed if he were willing to rely on Democrats’ votes to pass something that the grassroots of his party increasingly detests. Business lobbyists from the Chamber of Commerce and other powerful groups will exert influence over the vote as well, and Boehner might ultimately get a large enough number of Republicans on board to be politically palatable.

With economists on the left opposing the Ex-Im Bank on principle, powerful electoral influencers on the right prepared to punish GOP dissenters, and sexy headlines about corruption and scandals at the bank threatening to drown out its public relations push, it is difficult to chart a path to reauthorization.

Source: Alan Pyke for ThinkProgress

More reason why the Bush Tax Cuts were bad for America, along with the rest of Dumbya Bush 43’s reign as President.  

h/t: Dartagnan at Daily Kos 

dailykos

H/T: Steve Benen at msnbc.com’s Maddow Blog

h/t; Bryce Covert at Think Progress Economy

crooksandliars:

Mr. 'Government Shutdown' Cantor Blames Economic Woes On Obama

I don’t know about anyone else, but I think the man personally responsible for making sure that the Democrats could not pass a discharge petition to reopen the government after Republicans shut it down — a shutdown that cost the economy $24 billion, did great damage to our businesses, and whose party has cost our economy at least 750,000 jobs with threats of default — is the last person who should be attacking anyone else for the shape our economy is in.

read more

h/t:  JPMassar at Daily Kos

justinssportscorner:

H/T: Travis Waldron at Think Progress Sports

H/T: Ray Long at Chicago Tribune's Clout Street

See Also: GIF Map of how the protests sprang up.

h/t: Alan Pyke at Adam Peck at Think Progress Economy