If you want to know what's...

[Yonivore]

...wrong with letting government use our tax dollars to play venture capitalist, this may be the poster story:

Gone with the Wind

The government-backed Ex-Im Bank gave a Brazilian company $32 million to buy wind-turbine blades from a Danish company to protect 250 American jobs for … a weekend. That’s $42,666 per job per day saved. Nothing like government to make efficient use of capital, eh?

I don't know about you but, I could have used an extra $32 million, in pocket change, this past weekend.

[Clipper Nation]

Son, at this point, you would gleefully post a thread if the smell of Obama's latest wasn't quite to your liking....

[ElNono]

Not saying there's no scam on this thing, but I'll explain a thing or two that seemingly went over Yoni's head:

- Loan guarantee != "giving money". If the Brazilian company decides not to pay up, THEN you could say money was given... to Bank of America, who actually made the loan.

- The company used to employ 300 full-time workers + 140 temp workers, and is laying off 94 full-time workers + all the temps, leaving them with about 206 full-time workers. (per here)

- The company also employs upwards of 400 people in their North Dakota plant.

With that in mind, the 250 jobs protected certainly didn't last for a weekend.

Now, the argument could be made if that's money well spent or not. Both Democrats and Republicans seem to be happy with the Ex-Im Bank and how it invests it's money.

[Wild Cobra]

The problem with loan guarantees is they are only needed on risky investments. That's why the government shouldn't do it. It provides a guaranteed profit for a banking ins ution.

Wouldn't it be better for the government to directly lend the money instead of assuming the risk and guaranteeing their banker buddies make the money?

Now I'm not even in favor of this option, but it's insane to line the pockets of bankers with bore money.

[ElNono]

The problem with loan guarantees is they are only needed on risky investments. That's why the government shouldn't do it. It provides a guaranteed profit for a banking ins ution.

Wouldn't it be better for the government to directly lend the money instead of assuming the risk and guaranteeing their banker buddies make the money?

Now I'm not even in favor of this option, but it's insane to line the pockets of bankers with bore money.

Well, depends on the situation. Unfortunately, wind turbines is an area where China subsidizes the heck out of the industry (The US slapped China-made turbines with tariffs not long ago because of that) and so it's difficult to compete if you're not distorting the market yourself.

I'm not particularly fond of the bank intermediary either, and it's debatable this is a market the US should be trying to compete in long-term.