Loren Thompson opines that on August 15, only days before global equity markets suffered their worst declines in years, European plane-maker Airbus disclosed the biggest order in its history. IndiGo, a fast-growing economy carrier based in India, ordered 250 A320neo, the latest version of an aircraft that competes directly with Boeing 737. The eye-popping price-tag for the transaction was $26.6 billion, meaning that thousands of jobs will be created at Airbus sites in Europe. And not at Boeing sites in America.
We may never know precisely what role the easy availability of export credits from European governments played in making the Airbus order possible, but one thing is very clear. IndiGo is the kind of carrier that will be driving future demand for jetliners, an economy airline in a developing country, and that type of carrier typically depends more on government export financing to make its purchases possible. So, if Washington gets out of the export credit business, one of two things is going to happen - either our biggest exporter will continue losing market share and jobs to Airbus, or it will have to ship jobs to other countries that facilitate financing of exports.
That is one consequence of the current campaign to kill the Export-Import Bank, Washington sole export credit agency. A handful of right-wing ideologues in the House of Representatives is blocking the ability of majorities in both chambers to reauthorize an agency whose only role is to help American workers sell their goods abroad. There is a lot to like about Ex-Im Bank - it does not cost taxpayers a cent because it charges users for its services. It does not compete with the private sector, and in fact 98% of its transactions involve private lenders as partners. And, it focuses on leveling the playing field for exporters like Boeing that otherwise would be on their own in competing with companies backed by foreign governments.
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Managed & Built by I2M Consulting, LLC | © 2010-