Another knife in the belly for the US Merchant Marine

first PL-480 cargoes and now this! Work for US ships is steadily going away…

[B]Non-authorization of EX-IM Bank Impacts U.S. Economy[/B]

By MarEx 2015-09-17 16:08:51

President Franklin D. Roosevelt created the U.S. Export-Import (EX-IM) Bank in 1934 as part of his New Deal to finance and insure foreign purchases of U.S. products. But despite filling export financing gaps through its loan guarantee and insurance programs for 81 years, the federally-backed bank’s future is uncertain.

Congress allowed EX-IM’s lending authority to expire on June 30 as Tea Party Republicans seeking to limit government intervention in the free market assert the bank chose winners and losers by deciding which companies are approved for loans and insurance.

Due to the lapse in its authority, EX-IM is no longer processing new applications or engaging in new business, and is now focusing on its $107 billion portfolio until it is reauthorized.

According to EX-IM, it backed $27.5 million in exports in 2014, which is about two percent of the U.S. total. The institution also added that small business exports represented more than $10 billion of that total. And in the past six years, the Bank has financed the sale of more than $200 billion in U.S. exports, supporting over 1.3 million private-sector American jobs.

President Obama is among the bank’s supporters, noting that EX-IM supported about 164,000 jobs in 2014, and that it places the U.S. on an equal footing with foreign nations that insure and export their products.

[B]EX-IM’s seaborne shipping policy is that most products insured by the bank should be transported on U.S.-flagged vessels. This includes direct loans of any amount, guarantees above $20 million and products with repayment periods of more than seven years.

Many of the bank’s political supporters have argued that cargo preference laws for U.S. vessels is a cost-effective way to support the nation’s commercial fleet. Cargo preference is one of the ways that U.S. deepwater fleet and U.S. merchant seaman are maintained. The U.S. deepwater fleet supports military operations around the world.
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Earlier this week, General Electric (G.E.) stated that it would move 500 jobs overseas in response to EX-IM non-authorization. G.E. intends to move about 400 of those jobs to France, whose export credit agency has already offered financing services. The remaining 100 jobs will be relocated to Hungary and China. The jobs are shifting away from Texas, New York, Maine and South Carolina.

While most developed nations have an export credit agency, China appears to be the country most likely to gain if EX-IM is not reauthorized. According to a White House release, the majority of global official export credit agency activity remained flat in 2014, China’s grew by over 40 percent.

that great sucking sound you hear are all those jobs going overseas…SO SAD!

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I can’t help but feel that this is a red herring. The bank backed 2% of the trade that happened in 2014. It’s negative impact on the economy by unduly influencing Smith’s “invisible hand” outweighs its recently very minimal benefit. I’m a big believer in Uncle Sam getting out of the finance business, he does more harm than good. This article mentions Ex-Im as being part of The New Deal. With 80+ years of perspective and hindsight today, economists on both sides of the aisle agree that The New Deal was a failure and that it was the crucible of war that reignited the flames of commerce in this country, and around the world. I’m not suggesting that we get ourselves in another world war to salve our woes, but neither is Ex-Im the answer. I’m glad that they had a cargo preference in their practices, but they influenced such a small piece of everything going on that it’s all hardly worth the cost.

I believe there are at least six ships in the US fleet which principally earn occupation from Ex-Im cargoes. Maybe more? So tell the crews of those vessels how you don’t support the Bank?

Which 6 ships and what do they do? You may be right but I’m going to need more than that. I also don’t necessarily believe that those 6 ships won’t be able to find any sort of work in the vacuum of Ex-Im.

[QUOTE=PaddyWest2012;168953]Which 6 ships and what do they do? You may be right but I’m going to need more than that. I also don’t necessarily believe that those 6 ships won’t be able to find any sort of work in the vacuum of Ex-Im.[/QUOTE]

The Intermaine and BBC heavylift ships are the ones I specifically am thinking of. They are not liner ships but project cargo carriers who rely on Ex-Im financed exports to find work otherwise how can they compete in the world market filled with similar vessels?

We need to have a goal of carrying 1/3rd of US foreign trade on US flag shops, 1/3rd on ships flying the flags of our trading partners, and the remaining 1/3Rd open to any shop of any flag.

Flags of convenience need to be eliminated. Ships should be flagged primarily based upon the location of their ownership, management, and trading patterns.

For example, when foreign flag drill rigs and offshore construction vessels come to work in the US, they should be required to reflag US within 90 days. Waivers should not be granted except for bonafide emergencies, such as Deepwater Horizon.

The Ex-Im used to be called Boeing’s Bank. It is actually a corporate gift with privatized profits and socialized losses.
Here’s a good summary.

Like I said, for a lot of different reasons, Uncle Sam’s gotta get out of finance. It’s not doing him or us any good.

[QUOTE=PaddyWest2012;169015]Like I said, for a lot of different reasons, Uncle Sam’s gotta get out of finance. It’s not doing him or us any good.[/QUOTE]

are you also against Title IX Loan Guarantees as well?

Isn’t that the thing where you can’t tell your co-worker she’s got a nice bum?

[QUOTE=PaddyWest2012;168946]I can’t help but feel that this is a red herring. The bank backed 2% of the trade that happened in 2014. It’s negative impact on the economy by unduly influencing Smith’s “invisible hand” outweighs its recently very minimal benefit. I’m a big believer in Uncle Sam getting out of the finance business, he does more harm than good. This article mentions Ex-Im as being part of The New Deal. With 80+ years of perspective and hindsight today, economists on both sides of the aisle agree that The New Deal was a failure and that it was the crucible of war that reignited the flames of commerce in this country, and around the world. I’m not suggesting that we get ourselves in another world war to salve our woes, but neither is Ex-Im the answer. I’m glad that they had a cargo preference in their practices, but they influenced such a small piece of everything going on that it’s all hardly worth the cost.[/QUOTE]

People preaching free market fundamentalism are either naïve or conn men. The economy is like a fabric, you can’t pull out the “government intervention” threads and leave the “free market” threads and expect the fabric to stay together.

Things don’t get deregulated, they get regulated in a different way. Remember the Saving and Loan fiasco or Alan Greenspan’s faith that finacial markerts would self regulate. It’s nonsense. These institutions like the IM EX bank were built piece by piece over a period of time. Ending the Bank without understanding is like removing some regulations while keeping others as was done with the S&Ls.

I imagine that Bruce Poliquin figured that if the bank was not funded that the GDP would tick up bit in accordance with theory, not that 80 Mainers would lose their jobs. He’s destroying what he does not understand.

The biggest hoax they ever pulled on the working man with nothing to sell but his labor was the myth of free market fundamentalism. The free market is an impossible utopia

no, it’s when chuky cheese the marad boss gives out free money to build ships under fraudulent pretenses.

Thanks.
Free market is a fallacy has been since the term was coined and even Greenspan admitted deregulation and letting “markets” work was a mistake.
The Ex-Im bank could and should be modified.

[QUOTE=Kennebec Captain;169059]People preaching free market fundamentalism are either naïve or conn men. The economy is like a fabric, you can’t pull out the “government intervention” threads and leave the “free market” threads and expect the fabric to stay together.

The biggest hoax they ever pulled on the working man with nothing to sell but his labor was the myth of free market fundamentalism. The free market is an impossible utopia[/QUOTE]

Absolutely. What we need is more government intervention in the economy not less. I actually think a system where the government owned all means of production would work out swimmingly. Can’t believe no one’s tried it before, certainly seems worth a try?

I thought C.Captain was all about fighting for the little man and sticking it to Joe Boss? Now he’s on here taking the same side as the Chamber of Commerce and pushing for more Corporate Welfare? What gives?

[QUOTE=50thState;169076]Absolutely. What we need is more government intervention in the economy not less. I actually think a system where the government owned all means of production would work out swimmingly. Can’t believe no one’s tried it before, certainly seems worth a try?

I thought C.Captain was all about fighting for the little man and sticking it to Joe Boss? Now he’s on here taking the same side as the Chamber of Commerce and pushing for more Corporate Welfare? What gives?[/QUOTE]

As an analogy it’s like having car problems and asking if the problem is if the car has too many parts or not enought. Once that question is answered you can fix your car by either adding or taking away parts. In fact the right way to fix a car is to troubleshoot the problem and correct it.

Likewise the relationship between goverment and the economy is complex to the point where seeing them as separate and independent things is not necessary the best way to frame the question.

[QUOTE=50thState;169076]Absolutely. What we need is more government intervention in the economy not less. I actually think a system where the government owned all means of production would work out swimmingly. Can’t believe no one’s tried it before, certainly seems worth a try?[/QUOTE]

sounds good to me…the government can built merchant ships and then charter them to operators. The US shipyards get work as do American mariners plus the Nation has a pool of ships to call upon in the event of a foreign war. Wait a minute! We did this in the 1930’s through the 1950’s when we had the world’s most massive and healthy merchant marine!

I thought C.Captain was all about fighting for the little man and sticking it to Joe Boss? Now he’s on here taking the same side as the Chamber of Commerce and pushing for more Corporate Welfare? What gives?

I am not in love with the Ex-Im bank and how it is used by corporations such as Boeing who don’t need it however, I am in love with ANY program that creates jobs for American workers and fosters ships which fly the US flag from their sterns.

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[QUOTE=tengineer1;169067]The Ex-Im bank could and should be modified.[/QUOTE]

agreed, but it should not be terminated nor should the mandate that US exports financed by the Bank be shipped on anything other than US flagged vessels.

[QUOTE=lm1883;169080]I’m ok with letting it expire. There are plenty of other lending utilities available for Boeing and GE. If they are insufficient I’m sure appropriate ones can be legislated.[/QUOTE]

I am sure the crews of those vessels out of work now will gladly reciprocate the sentiment when your vessel is laidup and you get your walking papers.

You are assuming, completely without foundation, that whatever vessels presently engaged in Ex-Im work will instantly be without work, and their crews without jobs, upon the expiration of the bank. This is not a foregone conclusion. As fledgling as the USMM is, there is still work to be had for a seaworthy vessel with an able bodied crew. I don’t know whether they will find work again, but I don’t know that they won’t either. I am not prepared to condemn them all to Davy Jones’ Locker because of a disharmonious headline.

[QUOTE=PaddyWest2012;169087]You are assuming, completely without foundation, that whatever vessels presently engaged in Ex-Im work will instantly be without work, and their crews without jobs, upon the expiration of the bank. [/QUOTE]

as you are assuming that they are all just rolling right along as if nothing has changed. You don’t know that at all but I do know that these ships heavily relied on Ex-Im export cargoes to earn their way. Just go to their websites to see that fact.

http://www.gdamsea.com/HeavyLift.html

http://www.intermarine.com/commercial-services/u-s-flag-services

http://www.rickmers-linie.com/index.php?id=1308&uid=2966

and you might also want to read this

[B]Ex-Im financing creates U.S. shipping opportunities, jobs[/B]

Last June I wrote about the Export-Import Bank re-authorization passed by Congress and signed by President Barack Obama. By providing financing for thousands of businesses trying to sell more American products overseas, this legislation supports the President‘s goal of doubling U.S. exports, insourcing jobs to American shores, and ensuring that we make the products that the rest of the world buys.

Gamesa, a Spanish clean-energy company whose North American headquarters is in Pennsylvania, is a great example of how the re-authorization can create jobs in the U.S. Using a $152 million Ex-Im bank loan, Gamesa manufactures wind turbine blades here in the United States, assembles the finished turbines here as well, then exports these complex assemblies to Uruguay and Mexico. Production here supports 510 American jobs.

The turbines will be shipped by Intermarine’s Ocean Freedom, a specialized U.S.-Flag heavy lift vessel operating between the Ports of Philadelphia and Houston. These shipments support 36 steady jobs for skilled American mariners.

Seventy-five percent of American exports travel through U.S. seaports. These facilities are key to our ability to transport American products overseas, and their collective modernization is a crucial part of the President’s export initiative.
To date, four rounds of TIGER Grants along with seven Marine Highway Grants have invested more than $357 million in 25 port and inland waterway projects across the country.

But more work must be done. The American Society of Civil Engineers reports that aging infrastructure and ports cost businesses $33 billion in 2010, with a projected cost of $49 billion by 2020.

Every business depends on safe, economical transportation, and that includes the businesses shipping cargo worth more than $5.5 billion through U.S. ports every day. That activity supports 13.3 million jobs and accounts for $3.15 trillion in business activity for our economy.

Trade is essential to our economic security and way of life. That’s why DOT is taking steps to support the maritime industry that powers American trade. Through loans to exporting companies that create American jobs and port infrastructure upgrades, we’re building on the progress we made during President Obama’s first term as we reignite America’s economic engine going forward.

The bottom line? Like America’s businesses, the Obama Administration understands that 21st Century trade requires 21st Century infrastructure.

and then tell us how these ships and their crews are not losing employment and income now?

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Won’t most of those Union Mariners just go back to the hall and wait for their turn to ship again?

The budget, and probably the losses, of the ex/Im bank is too big just to preserve the jobs on only six ships.

I’d rather have some flat out protectionism for national security and jobs requiring 1/3rd of all exports and imports to move on US flag ships. That costs the government nothing. Of course Americans will pay an extra dime at Walmart for the latest $99 toy from China but that’s ok with me.

Or we could require that all Chinese export goods enter the US at Guam. The Jones Act trade could take over from there.