Don't look now, but your pocket is being picked and you don't even know about it!
The Dow Jones Industrial Average went up 100 points Tuesday. While this is not new, what frustrates me is that dozens of executives in companies are enjoying the benefits of friends in high places and saw their stocks rise. And they are on their way to a very fat annual bonus this year, as they are measured on how much their stock prices rise. All of this at the expense of you, dear reader.
Let me show you one example. Mind you, there are several companies like this so I am not picking on Boeing alone.
Boeing saw its stock price rise $1.01 Tuesday. That is nearly 1 percent. Apparently the company "won" the space contract from NASA. Now I am not casting aspersions on the bidding process. I am talking about a very little known fact here.
H.R. 4950, the Protecting American Jobs and Exports Act, is a bill that aims to reauthorize the Export-Import Bank for another seven years.
So what is the Ex-Im Bank you ask?
Officially, the Ex-Im Bank is a banking corporation organized under the laws of the District of Columbia, and its capital stock is held by the United States. The bank's primary mission is to finance trade. More specifically, it provides loans to foreigners who want to buy American products.
This bank was created in the days of the Great Depression to help promote American goods overseas and allow countries that cannot afford to buy American products borrow from Ex-Im or have Ex-Im guarantee their purchases.
Who is Ex-Im bank being helpful to? It claims that it has helped finance $200 billion in the last five years. Well at $1.5 trillion in exports, that is not quite that big is it?
It is now documented that 76 percent of Ex-Im Bank funding went to countries that bought products from 10 Fortune 500 companies.
Boeing tops the list, with having received orders worth $8.3 billion. That is nearly 10 percent of the sales of Boeing. Without Ex-Im Bank financing, it is not known if they would have received those orders. So while Ex-Im doesn't really do much for the economy, it's really helping the favored companies like Boeing.
Boeing spent $15.2 million on lobbying in 2013. For the $8.3 billion they received, that's a 54,539 percent return on investment.
Sweet! Where do we sign up for this? Wait, we are not the chosen ones.
As the bank is wholly owned by the U.S. government, if they have any losses or go bankrupt, it is you and I who will bear that loss, not the bank officers and certainly not Boeing.
This is how capitalism works in America. The large corporations lobby Congress. The congressmen get funded for their future campaigns. They get elected and then pass bills that favor the corporations that got them there. They both enjoy the good life.
You and me, dear reader, sit through traffic and watch our living standards slip by each day. We pay more for things that the government tells us are not getting expensive since there is no inflation.
I believe it is time to invest wisely in genuine companies that are not growing fat on government handouts and ones that earn their stripes because they are smart and earn their keeps.
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