Thursday, September 9, 2010

Obama's Proposed Infrastructure Bank

Tim Carney has an idea what it will look like:

[President Obama] should know that his proposal for an unaccountable "infrastructure bank" is a recipe for a politically charged, corporate-welfare slush fund...

The closest thing today to Obama's proposed infrastructure bank is the Export-Import Bank of the United States -- a government agency that finances U.S. exports. It's a nice pot of cash for the special interests: A majority of Ex-Im's finance dollars are spent subsidizing one company -- Boeing.

Ex-Im also shows how such government "banks" are subject to political pressure. Earlier this year, the agency rejected a subsidy request from a Wisconsin company, Bucyrus, which was seeking a contract to build a power plant in India. Wisconsin Sen. Russ Feingold, a Democrat facing a difficult re-election battle this year, leaned on the administration to reverse its decision and bypass the environmental rules that had killed the deal. Ex-Im listened to Feingold and did an about-face -- and Feingold sent out a press release bragging about it.


  1. Speaking of Boeing and slush funds...

    I was talking to a friend of mine last night whose cousin works as a "project manager" for Boeing. He visited his cousin in Australia a couple years ago when his cousin was there on an "expat job" for about a year. Apparently, Boeing put him up in a 5,000 sqft penthouse ("half the floor of this awesome highrise!") apartment while he was over there, the place was fully furnished, fancy rugs, amazing views, the works.

    "Needless to say," exclaimed my friend, "We tore that place up and partied for two weeks straight while I was there!"

    I guess that's how you can afford to do "business" when you've got the Export-Import Bank at your back.

  2. "It's a nice pot of cash for the special interests"

    Who has infrastructure funds with billions to mobilize? Private equity. They love cheap money and guaranteed revenue. Uncle Sam can provide both.