Obama’s model: Cronyism and corporate welfare

“David McIntosh, Siemens vice president for federal lobbying, is an alumnus of Obama’s Environmental Protection Agency.”

Tim Carney writes in the Washington Examiner:

…On the day Obama gave his “insourcing speech,” North Carolina’s Democratic Sen. Kay Hagan unveiled a $635 million direct loan from the Ex-Im to a Saudi power company that has agreed to buy gas and steam turbines from Siemens, which will make the turbines in Charlotte. Charlotte happens to be the site of the Democratic National Convention, and North Carolina happens to be the state Obama won by the smallest margin in 2012. If the Saudi company fails to repay the loan, Ex-Im pays Siemens, ultimately with the backing of U.S. taxpayers.

Siemens is an ally of Obama administration on energy regulation, having lobbied, through the U.S. Climate Action Partnership, for mandatory caps on greenhouse gas emissions. David McIntosh, Siemens vice president for federal lobbying, is an alumnus of Obama’s Environmental Protection Agency, as well as his presidential transition team. McIntosh is an Obama donor (he gets around Obama’s “ban” on lobbyist donations by not being registered to lobby, meaning that Siemens’ veep for federal lobbying supposedly spends less than 20 percent of his time on lobbying).

Obama’s subsidy-reliant industrial policy not only fosters cronyism and politicization, but it also opens the door for exploitation by the biggest corporations, who tend to have the biggest lobbying budgets. Consider Ex-Im’s loan-guarantee portfolio. According to the agency’s recent annual report, Ex-Im issued $10.2 billion in loan guarantees to benefit Boeing last year alone, which is 66.8 percent of all the agency’s guarantees in that time period. Yes, more than two thirds of Ex-Im’s guarantees benefited one company, and that doesn’t even include Ex-Im’s $700 million direct loan to the United Kingdom to subsidize a Boeing satellite sale. This is Boeing’s standard share. The South Carolina standoff was just a lover’s spat.

Boeing Chief Executive Officer Jim McNerney chairs Obama’s Export Council, and the nearly $200,000 Obama received from Boeing executives and employees in 2008 is easily the most any politician has ever raised from the jet maker.

Ex-Im’s 2008 annual report tells other interesting stories about Obama’s industrial policy. Solyndra, which went bankrupt in August after benefiting from a $500 million loan guarantee from the Energy Department, pocketed an Ex-Im subsidy last year too: As Solyndra stumbled in February 2011, Ex-Im leant a hand by approving a $10 million loan guarantee to help Solyndra sell solar modules to Belgium. (Solyndra delivered the product to Belgium, and so the $10 million taxpayer exposure is not affected by the company’s bankruptcy.)…

Read Carney’s entire commentary.

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