Moderated by Rick Badie
The Export-Import Bank closed its doors to new business this summer, but congressional attempts are afoot to reauthorize the government agency that finances some exports of U.S. companies. Supporters of the bank, including the writer of today’s lead column, say it’s necessary for firms in Georgia and elsewhere to compete globally. The author of the companion column, however, calls the bank “corporate welfare” and rebuffs its reauthorization. The third article deals with consumer banking safety.
Georgia businesses need Export-Import Bank
By Al Williams
The Export-Import Bank, or Ex-Im, is an independent agency that has supported millions of jobs in its 81-year history and earned billions of dollars in revenue for the U.S. Treasury. The bank, which exists solely to empower U.S. businesses to succeed in global markets, has enjoyed bipartisan support from both Republican and Democrat presidents.
For thousands of American businesses, the bank has been a critical tool in leveling the playing field in a competitive global marketplace and filling the trade financing gaps that the private sector is unable or unwilling to provide. In fiscal year 2014, Ex-Im Bank supported 164,000 U.S. jobs through $20.5 billion in loan authorizations to export businesses, including thousands of small and minority-owned businesses. In fact, out of 3,700-plus authorizations in 2014, more than 3,300 – or nearly 90 percent – directly served U.S small businesses. Moreover, about one out of every five directly served minority- or women-owned businesses.
But because Congress failed to act, the bank’s lending authority expired last July, preventing the bank from processing or engaging in new business. As a result, the U.S. is now the only major economy in the world without an Export Bank.
Trading with the rest of the world, whether through exports or imports, is an important part of the U.S economy. Our nation is losing out on good-paying jobsand small businesses are losing out on billions of dollars in exports. To date, the U.S has lost an estimated $10.2 billion export dollars and more than 58,000 American jobs because of inaction by Congress.
To many on the far right, Ex-Im Bank has become a new symbol of corporate welfare and an overgrown federal government. But in reality, Ex-Im Bank operates at no cost to taxpayers and maintains itself without external support from the government. In fact, in 2014, the bank generated $675 million in revenue for the U.S Treasury through fees and interest paid by customers.
Furthermore, Ex-Im Bank has provided support to businesses and increased exports in all 50 states, including Georgia. The bank has provided funding for several companies integral to Georgia’s economy. Over the past nine years, it has supported $5 billion of total exports from 225 employers in the state.
The finance support from Ex-Im Bank enables companies to be more competitive around the world and to grow the number of employees here at home. Last year, the Bank approved a guarantee of $300 million to Gulfstream, a company headquartered in Savannah that employs more than 6,610 people. The Boeing Co., another aerospace supporter of the Ex-Im bank, had 700 employees in Georgia as of 2014.
Since the U.S. Export-Import Bank authorization expired, companies like GE have started talks to move their businesses elsewhere. In fact, the company announced that it would move approximately 500 jobs to France, Chinaand Hungary. This move will have an impact not only on employees, but also the hundreds of suppliers in Georgia that cannot move their facilities. Without the bank, we not only endanger economic and job growth in the U.S andGeorgia, but we also put our nation’s leadership in the global economy at risk.
It is time to put aside partisan differences and put our taxpayers and small businesses first. Our exporting businesses, and the families who rely on them for the security of a steady paycheck deserve better. They need certainty and protection to tackle new markets, as well as expand and create jobs. That is why I call on Congress to reauthorize the Export-Import Bank this fall.
State Rep. Al Williams, a Democrat, represents House District 168.
End government’s choosing winners, losers
By Mike Lowry
The authority for the Export-Import Bank expired on July 1and has not been renewed. This is an event to be applauded by every American taxpayerand to my memory is the first government program of substantial size to be ended in more than 60 years.
This view is part of an entire fabric of thought that our government has become too large, too intrusive, too expensive and too out of control. With each new program comes a new agency, a new budget, a new set of untouchable bureaucrats, a new collection of advocate-beneficiaries and a new layer of dependency, and most particularly, a new collection of politicians using the program as a protective layer against being voted out of office.
The Ex-Im Bank’s website — which is still in operation — says: “Small business exporters need certainty and protection to tackle new markets, expand and create jobs.”
This sounds good.
Unfortunately, the reality is that, in order to do this, the Ex-Im — that is, the government — has to decide who gets to win and who gets to lose. This is the underlying principle of “government help.” It is the massive weight of the government’s thumb on the scales of free-market competition. Our small businesses have consistently shown that, given the freedom to operate, they can compete with anyone in the world. They don’t need the government, except to remove the obstacles that foreign governments put in the way.
Another quote from the Ex-Im website: “With nearly 60 other export credit agencies around the world trying to win jobs for their own countries, EXIM Bank helps level the playing field for American businesses.”
This is the proponents’ version of “if the other guys are doing it then we should do it, too.” This is a lose-lose game for free markets. Other governments exist on bribery, which we have made illegal. We should make credit assistance by governments illegal as well. We should instead examine ways in which to remove the undue influence of the “other export credit agencies.” It is absolutely against free competitive market principles for a government, any government, to insert itself into commercial transactions between private companies as long as those transactions comply with all laws.
A third quote from the Ex-Im’s website: “Over the past two decades, the Bank has generated nearly $7 billion more than the cost of its operations.”
If this is true, then why does it need government funding? Better yet, why isn’t it a private function? If the benefits to the client companies are that great, and the returns from this kind of lending are that good, why is the government involved at all?
My opposition is not based on dislike of any corporation or type of transaction. It is based on principle. We either have principles or we don’t. They should not be selective by company or product.
This same logic applies to many government programs, among them:
- Fannie and Freddie manipulating the mortgage market.
- Use of the tax code to grant tax preferences to select groups and companies.
- Funding of “favored” industries such as wind and solar.
- Tax and government grant and contract preferences based on gender or race.
- Misuse of the EPA’s authority to implement policies that have little to do with the environment.
Thomas Jefferson once said. “A government big enough to give you everything you want is big enough to take away everything you have.” In order for the government to give something, it must take something from someone else. We will all be much better off by limiting what the government can take.
Our founders were wise enough to severely limit what the federal government should be involved in. In the last 100 years, our political “leadership” has consistently and detrimentally found ways to subvert these limits. Let’s all hope that the expiration of the Ex-Im bank’s lending authority is the beginning of a reversal of that trend.
Mike Lowry, a technology executive, lives in Roswell.
Cybersecurity diligence pays off
By Joe Brannen
October is National Cyber Security Awareness Month, and Georgia’s banks are helping consumers and businesses take simple, effective steps to protect accounts and information.
The other day I paid all my bills from my bank account at 10 p.m. While I was doing that, I also got an e-mail from a scammer claiming to be a former Libyan army officer promising me millions of dollars if I help him get money out of his country by sharing my account information with him.
That’s a prime example of how, along with the convenience and cool factor that comes with managing our money electronically, there are also important security concerns.
Keeping your money safe has always been at the forefront of priorities for the 240 banks doing business in Georgia. Banks spend hundreds of millions of dollars to have the latest in cyber-protection capabilities to protect your accounts and identity.
But unfortunately, hackers and cyber-thieves know how to exploit our human tendencies to get access to sensitive information. A 2014 study from IBM said 95 percent of cybersecurity incidents involved human error at some point.
So it’s clear that, whether we’re guarding ourfamily’s checking account or are responsible for making sure our company’s finances and data are safe, people play a big role in having a strong cybersecurity fence. Every person who is connected to a computer at your place of business, for example, needs to know how to avoid inadvertently infecting your company’s systems, or sharing sensitive information.
The good news is that many of the best protections are easy and don’t cost anything.
Tips such as change your passwords frequently, don’t open e-mail attachments from sources you don’t recognize and don’t fall for unsolicited phone or Internet scams asking for money are good starts.
Maybe the simplest protection related to banking is to use banks’ technology to watch your account. Online banking, mobile banking appsand mobile alerts make it easier than ever to spot transactions that look suspicious so you can let your bank know right away if something is not right.
And also remember that your bank will never e-mail you asking you to click a link or open an attachment to share account numbers or other critical data. If there’s ever any question, simply call or visit your bank or go online directly from your browser.
If you’re a business owner, talk to your banker to make sure you know the best ways to protect the critical links and transaction verification procedures between your business and your accounts. Make sure your employees have access to training about how to protect your systems from infection and hacking.
In support of National Cyber Security Awareness Month, Georgia’s banks and the Georgia Bankers Association will be sharing these types of tips with consumers and businesses around the state. You can get more information from your bank, or from our website, http://www.gabankers.com.
Joe Brannen is president and CEO of the Georgia Bankers Association.