Political Footballers Are Seeking To Kick Ex-Im Bank To The Sidelines, Yet Again

Although The Wall Street Journal is one of my absolutely favorite dailies, sometimes certain materials it publishes in its Opinion section force me to raise my eyebrows and shake my head.  Such was the case on Friday when I read an opinion letter titled  A Corporate Welfare Test, which called for a political attack on the US Ex-Im Bank and specifically for sabotage of its Chairman’s upcoming nomination.  Of course the author has a right to his/her opinion, but the fact that the piece does not contain accurate facts, is full of material omissions and is unsigned by the author, make it read more like a venomous political smut, rather than a balanced con argument it should have been.

Immediately my thoughts went to May of last year when a bloody, dirty and very public smear campaign was waged in the media to derail the Bank’s congressional reauthorization.

Following , are excerpts from the last year’s post, which very much apply to today’s situation,  “…  We have extensively covered this issue over the last few months on the pages of this blog, but it again boiled to the surface couple of days ago, as the House passed Ex-Im’s reauthorization, but it once again stalled in the Senate, where it was expected to pass without hinderance.
Yes, Ex-Im Bank, like 99.9% of our Federal Agencies could use improvement in the ways it does business (it is the most difficult Export Credit Agency to deal with out of all OECD countries); yes, it is highly political and it is justly and commonly referred to as “The Bank of Boeing”.
Yet, the Bank is an absolute contributor to the Federal Treasury.  It makes money for the taxpayers and funds over $30 billion of U.S. exports per year, supporting tens of thousands of American jobs and allowing businesses to take risks and sell abroad where they would not ordinarily do so. Losses on the portfolio of loans guaranteed by the bank are around 1.5% – completely in line with sound commercial banking practices.  These are indisputable facts and all those commenting bellow to the contrary are simply ignorant, or are using the issue for their political gain.  What is also indisputable is that until such time as all other nations decide to do away with their respective Export Credit Agencies, doing away with Ex-Im bank in the U.S. will cause great economic harm to our nation and will put our companies into a severe disadvantage as they try to compete on the increasingly competitive global arena.  To my knowledge, only U.S. lawmakers have been trying to advance the idea of elimination of ECAs in other countries and the idea has zero support in the international community.
Thus far we aired dirty laundry, embarrassed our country, spend untold taxpayers money debating the issue, but there is a silver lining that we could hold on to and improve the Ex-Im Bank and our national export policy.  So what positive things do I think should  happen as result of this issue being forced to the forefront of our Nation’s debate
I sincerely hope that some of our airline union leaders (especially Delta Airlines) really rethink their position, stop pointing fingers and instead try to address their problem of bloated inefficiencies from within in order to become more competitive globally
I do believe the Bank would benefit more from having people with business experience decide its fate, not politicians who use it as a football. Congress should appoint a non-partisan oversight board, which would be composed of different industry exporters and would be able to develop meaningful policies based on sound business principles and international experience exporting.  Something like this exists now in an informal corporate influence network, which exists around the bank. Why not formalize it, bring it to the surface and let the business help run the bank.
We also should look at other countries’ ECAs and adopt some of their lending practices.  The bank should become more nimble, its arcane content report policies should be completely reformed to reflect today’s reality.  It also should be given authority to expand its 400 or so staff by at least 50%.
Most importantly, the Senate should quickly and smoothly reauthorize the bank, and get this issue off the front pages of the newspapers. This way, we shall stop embarrassing ourselves to the world with half-baked ill supported arguments and insular protectionists views of some of our less informed political and media players. Our opponents relish when America suffers and debates like this play directly into their hands. Let’s stop the circus of Ex-Im proportions and get back to business of financing exports….” Fluent In Foreign May, 2012

A Corporate Welfare Test

The Ex-Im Bank has resisted reform. Will Republicans roll over?

Is there anyone who hasn’t heard Congressional Republicans promise to protect taxpayers from wasting more money subsidizing Uncle Sam’s various “government sponsored entities”? Well, it’s showtime. Their chance to redeem that promise has arrived with the reconfirmation vote on Fred Hochberg, chairman of the Export-Import Bank. And it looks as if Republicans may let this vote pass without demanding some answers from the Obama Administration about Ex-Im’s future.

A hold on the Hochberg nomination is the least the GOP can do after it dropped the Ex-Im ball last year. The bank provides taxpayer-backed loans, loan guarantees and insurance to clients of some of America’s plumpest corporations. When its reauthorization came up last year, Republicans merely needed to sit still to kill this relic of New Deal-era market intervention.

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Agence France-Presse/Getty Images
US Export-Import Bank Chairman and President Fred Hochberg

Instead, the House leadership cut a deal with Democrats to reauthorize the bank and extend its lending cap by 40%—to $140 billion. In the Senate, South Carolina’s Lindsey Graham argued the U.S. couldn’t “unilaterally disarm” in the handout war, given that the Europeans still subsidize their businesses. What he meant was that BoeingBA -0.69%which has been the beneficiary of nearly half of Ex-Im’s largesse and makes planes in South Carolina, could count on more gravy.

Congress’s critics of Ex-Im (yes, they exist) got steamrolled, though not before inserting a provision telling the Treasury Secretary to start discussions with the Europeans to reduce—and eliminate—export subsidies. Treasury has since done nothing of note.

The bank is also belligerent about accepting oversight of its ballooning risk. Ex-Im’s inspector general issued a tough report in September on the bank’s poor management and its growing portfolio concentration in the airline industry. The IG’s sensible recommendations include that Ex-Im undergo stress testing, create a chief risk officer, impose some soft limits on its loan concentration and give its board more oversight authority.

Ex-Im promised stress testing but has produced no results. Mr. Hochberg resisted a chief risk officer until this month—and only under pressure from a House hearing. He has rejected portfolio limits that are de rigeur at serious financial institutions, as well as calls to empower his board. Ex-Im is also quick-marching toward its new cap, adding $10 billion in new lending in the last year.

Congress’s subsidy crew loves the Hochberg regime, and they are rushing to get him reconfirmed before his term expires July 20. The Senate Banking Committee rubber-stamped him in June; only two Republicans—Tom Coburn (Okla.) and Pat Toomey (Pa.)—had the grit to vote no. Mr. Hochberg’s supporters will resist any delay, since the terms of two other board members also expire in July. That would deny Ex-Im the quorum required to approve transactions.

Such a pause is exactly what’s needed. Before taxpayers are put further on the hook subsidizing the likes of Boeing and General ElectricGE -0.56% Mr. Hochberg needs to agree to more oversight and limits on the bank’s operations. And the Obama Administration needs to follow the law and put forth a credible strategy for ending export subsidies.

READ MORE IN: CIRCUS OF Ex-Im PROPORTIONS

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$220mil Distributed Energy Generation Utility Project Using American Equipment and Financing Announced In Russia

Fluent In Foreign Business EXCLUSIVE!   

We proudly bring you another spectacular example of foreign companies skillfully tapping U.S. markets to finance their overseas projects.  As part of the Emerging Markets: Keys To America™ initiative

Distributed Generating Company, LLC Selects Broad Street Capital Group

To Advise on $220 million

Distributed Energy Generation Utility Project Planned for Russian Federation 

Distributed Generating Company, LLC of Samara, Russia (“DGC LLC”) announced today that it selected Broad Street Capital Group as its exclusive financial advisor for the development and financing of a state-of-the-art distributed power generation utility in the Russian Federation.  The proposed $220 million project will launch in July with support of Eurostar Developments LTD and financing that is being arranged in two phases through a combination of owner’s equity, senior bank loans and guarantees from the Export Import Bank of the United States (U.S. Ex-Im Bank). (READ MORE)

More on the subject:

http://www.forbes.com/sites/williampentland/2013/06/25/russia-gambles-on-utility-scale-distributed-energy/

APPLE SEEDS, AWARD-WINNING CHILDREN’S PLAYSPACE, EXPANDING ITS FRANCHISE GLOBALLY

apple seeds expanding its franchise globally, yet carefully

(click to watch the MSNBC video on how apple seeds have done it)

apple seeds is highly popular with kids and their parents

APPLE SEEDS, AWARD-WINNING CHILDREN’S PLAYSPACE, TAPS  FLUENT IN FOREIGN TO MANAGE INTERNATIONAL FRANCHISING  

Fluent in Foreign LLC, a New York City based advisory firm that helps companies grow, finance and protect their business internationally, has been retained by Apple Seeds International LLC (http://www.appleseedsplay.com) to help them develop and manage children’s activity centers, through franchising arrangements, in international markets.

apple seeds, which opened its first activity center in Manhattan in 2007, has won numerous awards for innovation in the design of its 15,000 sq. ft. facility as well as for its wide variety of extracurricular classes for children, and their parents or caregivers, from newborn to five years of age. Last year the company opened its first international facility, in Mumbai, India, with locations in Dubai and Mexico City slated to open this year along with a second Manhattan location.

“Our concept has won recognition and praise from prestigious media like New York Magazine, Time Out New York Kids and Nickelodeon, and we feel the time is right to take our concept — via franchising agreements — to other major cities around the world,” said Bobby Berna, who, with his wife Alison and another couple, Allison and Craig Schlanger, co-founded apple seeds.  “Busy parents in other big cities have the same desire for quality playtime and an innovative learning experience for their young children.  It’s something that is common to all parents no matter the border.”   ( Please visit  http://wp.me/P1iIhX-7K for more…) 

Inside a Bribery Probe at Storied Architecture Firm HLW

By JOE PALAZZOLO and CHRISTOPHER M. MATTHEWSThe Wall Street Journal

At a cafe in Abu Dhabi, two men met and discussed a bribe.

One worked for Cyril Sweett International Ltd., a U.K.-based company managing the construction of a $100 million hospital in Morocco. The other worked for the architecture firm HLW International LLP, which was vying for a $5.6 million contract to design the hospital.

[image]Sweett Group

HLW won a contract to design a hospital, pictured, in Morocco.

The Cyril Sweett executive had come with a message: HLW would get the work if it agreed to pay 3.5% of the contract value to an official inside the United Arab Emirates president’s personal foundation, which was funding the project.

The May 2010 meeting, described in internal HLW documents reviewed by The Wall Street Journal, offers a rare, inside look at one company’s efforts to expand in a new market overseas without exposing itself to liability under a U.S. anticorruption law that has cost American companies billions of dollars in penalties in recent years.

The allegations of corruption within the Khalifa Bin Zayed Al Nahyan Foundation come amid a UAE government push for stronger local laws to counteract a culture of patronage in which giving gifts to government officials is part of doing business. The documents suggest that HLW was one of several firms pressured to pay bribes in connection with projects funded by the foundation, which is named after the UAE’s president.

HLW, whose commissions include the old New York Times Building in New York and NASA’s Goddard Space Flight Center in Greenbelt, Md., traces its U.S. roots to 1885. When the recession hit in the U.S. in 2008, it looked to the Middle East for opportunities, deciding to establish an office in Abu Dhabi. The Morocco hospital, a 200-bed facility still under construction in Casablanca, was HLW’s first major contract since its return to the region, a former executive says. READ MORE

CULTURAL NAVIGATOR® Demonstration and 2013 FI3F Index™ Release Will Highlight the IFE in NYC

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Fluent In Foreign Franchising™ Team is once again proud to sponsor the International Visitors’ Center and the Boat Cruise at the upcoming International Franchise Exposition at the Jacob Javits Center, June 20th-22nd.

Please visit us at the convention and view the demonstration of the Cultural Navigator® product suite conducted by the elite demo team from the Fluent In Foreign Academy™ and our content distribution partners at Berlitz/TMC®.  

Cultural Navigator® is a unique cross-cultural training tool and is a must for anyone doing are seeking to do business internationally.

At the conference Fluent in Foreign will be releasing its acclaimed 2013 FI3F Franchise Index™, which ranks attractiveness of 180 countries to franchisors.

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Appeals Court Decision Rejects Delta Request for Invalidation of Ex-Im Bank Air India Transactions

Appeals Court Decision Rejects Delta Request for Invalidation of Ex-Im Bank Air India Transactions

Washington, DC — The U.S. District Court of Appeals in Washington, DC today rejected a request by Delta Air Lines to vacate the Export-Import Bank of the United States’ (“Ex-Im Bank’s”) support of sales of U.S.-manufactured aircraft to Air India.  The Court has asked Ex-Im Bank to further explain its financing decision for the Air India transactions, but the Court chose to leave undisturbed the Bank’s financing of the Air India transaction and did not question the Bank’s flexibility in carrying out its statutory mandate.

The decision comes following the appeal by plaintiffs Delta Airlines, Inc. and the Airline Pilots Association of a lower court decision in July 2012 that determined that Ex-Im Bank properly approved financing for purchases of certain Boeing aircraft by Air India.

“I am gratified by the court’s recognition that these transactions should not be impeded by litigation. The Bank maintains significant flexibility in complying with its statutory mandates and its effort to support American jobs.” said Fred P. Hochberg, chairman and president of Ex-Im Bank.  “This represents a victory for tens of thousands of American aerospace workers.”

Delta Airlines alleged in its suit that Ex-Im failed to consider the economic impact of its loan guarantees for the purchase of wide-bodied Boeing aircraft by Air India.  Boeing, which by dollar volume is the number one exporting company in the U.S., employs about 85,000 American workers in the manufacturing of its commercial aircraft.

ABOUT EX-IM BANK

Ex-Im Bank is an independent federal agency that creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. In the past five years (from FY 2008), Ex-Im Bank has earned for U.S. taxpayers nearly $1.6 billion above the cost of operations. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.

Ex-Im Bank approved $35.8 billion in total authorizations in FY 2012 – an all-time Ex-Im record. This total includes more than $6.1 billion directly supporting small-business export sales – also an Ex-Im record. Ex-Im Bank’s total authorizations are supporting an estimated $50 billion in U.S. export sales and approximately 255,000 American jobs in communities across the country. For more information, visit www.exim.gov.

A Central European Gem Thinking Three Steps Ahead, as It Courts U.S. Investors

By: Alexander GordinFluent In Foreign Business EXCLUSIVE! 

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Earlier this week I had the pleasure to attend a roundtable discussion presented by the European American Chamber of Commerce in honor of the visit to New York by the Deputy Prime Minister, Minister of Foreign & European Affairs of the Slovak Republic, Hon. Miroslav Lajcák.  During the meeting, some very pertinent issues were raised and questions answered.  It quickly became clear that despite the hardship experienced by the entire European Union, Slovakia, due to its fantastic location and a well-developed manufacturing base, was well positioned to recover quickly and expand its foreign investor base.

As one of the more attractive emerging markets in the world, Slovakia affords its investors a rare combination of EU protection, reasonable prices for inputs such as labor, real estate and raw materials, as well as super transportation network, educated labor force and strong manufacturing infrastructure.  Slovakia was one of the star countries featured last May at the Fluent In Foreign’s What Lies Beyond The Bricks Summit.

After the meeting, Fluent In Foreign Business ™ was granted an exclusive interview, during which  Minister  Lajcák eloquently laid out not only Slovakia’s investment climate and the country’s unique advantages, but also gave a glimpse into the country’s strategy to transition itself from a potent precision component manufacturing, metallurgical and automotive assembly hub to  a knowledge based economy from the largest Central European manufacturing hub. READ MORE

The 12 Top Apps for Business Travel

  under30ceo.com

Business Travel

QUESTION: Summer means travel == What new apps are making traveling easier and more fun than ever for entrepreneurs on the go?

Question by: Ashley

Square to get paid anywhere

“I’m a big fan of Square. It allows me to accept credit card payments for books and other materials on my Android when I’m out and about at a speaking engagement or conference.”
– Alexandra Levit | President and Founder, Inspiration at Work

Hotel tonight for on-the-go-bookings

Hotel Tonight allows you to book hotel rooms the same day. I have friends who never pre-book hotels anymore — they simply fly into any major city and, upon landing, make a booking.”

– Matt Mickiewicz | Co-Founder, Flippa and 99designs

Tripit is my travel bible

TripIt is absolutely incredible — it automatically pulls of your travel plans from your email into an organized app on your phone. You just click on the name of the trip to see reservation numbers, flight times, hotel check-in times and more all in one simple list. No more frantically searching through your email trying to find your booking number at the airport!”
– Laura Roeder | Founder, LKR Social Media

Join the gogobot community

GoGoBot definitely makes travel more fun. It’s a network that you just need to use if you’re into traveling.”
– Ben Lang | Founder, EpicLaunch

That weather app is necessary!

“Being a travel photographer and entreprenuer, weather is extremely important to me. Not only does it help me plan my photoshoots for landscape images, but it also helps me prepare my day in a new city.”
– Angela Pan | Owner/Photographer, Angela B Pan Photography

Trippy

“In the words of Hansel from the movie Zoolander, “Trippy is hot right now.” This company has done a great job mixing the adventure of travel with benefits and tools of social networking. Good luck and happy travels!”
– Kent Healy | Founder and CEO, The Uncommon Life

Blurtt it out while on the go

“This app allows you to add captions to your photos. In other words, when traveling, I often find myself in a situation with a great line to share with friends and family, Blurttallows me to voice my thought and add a photo at the same time. The application is fun and easy to use — give it a try, add a photo to your caption and “say more with less.””
– George Mavromaras | Founder and President, Mavro Inc. | Praetor Global LLC.

Always go with AirBNB

“Sometimes, hotels are just too expensive. I love Airbnb, which is a service where you can list and rent rooms/homes from private individuals. It’s a great way to save money and, on occasion, find an awesome friend or business contact.”
– Eric Bahn | Founder, Beat The GMAT

Forget about confusion with flighttrack

FlightTrack helps keep you on schedule for flights and even provides maps of airports, which can get really tricky for entrepreneurs who travel a lot. This app even hooks up with TripIt, which can create an entire travel itinerary for you and put it on your online calendar. “
– John Hall | CEO, Influence & Co.

Give others a glympse

“When I’m traveling, Glympse lets me easily update people on when I’m going to arrive where — it lets people see my planned route and updates continuously with my current location. I love being on the other end, too because it helps me tweak my schedule so that I know if someone is running late or early.”
– Thursday Bram | Consultant, Hyper Modern Consulting

Clockworkmod tether changed my life

“I often take the train into NYC for networking events, but I wasn’t able to do work on my way in since there was no Wi-Fi. After taking 15 minutes to setup ClockwordMod Tether, I was able to tether my Droid to my laptop — for free! Now I can travel and work virtually anywhere, anytime, without requiring Wi-Fi. It’s empowering!”
– Matthew Ackerson | Founder, Saber Blast

Everything with evernote

Evernote has made my business and personal travel so much easier! When I’m traveling and on the go, I can take photos, type in notes or add flight information, and it keeps it all within reach. Whenever I need to seek them out again, I have them right there. Even if I take a photo, it will find what I’m searching for by identifying any text — whether on a sign, receipt or something else.”
– Steven Le Vine | CEO/President, grapevine pr

EX-2X

President Obama’s promise to double exports in five years was a big idea. Maybe too big. Here’s where we’re really headed—and why. 

[By Will Swaim] Global Trade Magazine

global trade obama world international business logistics transportation cargo ocean carrier

Even now, reliving the moment online through the magic of YouTube, you’restruck by the Bigness of his Big Idea: President Barack Obama’s January 2010 promise to double exports by 2015 and, so, produce two million new jobs.

Observers called it “bold,” “surprising” and “ambitious.” It had the quality of Babe Ruth’s famous (perhaps apocryphal) promise to homer in game three of the 1932 World Series. Or U.S. Gen. Douglas MacArthur’s 1942 promise that he’d retake the Philippines. Or President John F. Kennedy’s 1961 promise to send a man to the moon.

And early this year, two years after his Declaration of Export Independence, it seemed the president had delivered. A New York Times reporter noted that the president’s original “surprise” announcement was a “bold promise” that had “sent the eyebrows of economists and policy experts upward, even as they applauded its intent.” However twisted that sentence (we know “they” is supposed to refer to “economists and policy experts,” but can’t help thinking it refers to “eyebrows”), her point was otherwise clear and nearly universal among reporters: “The administration is on track — for now — to meet its ambitious goal. Growing exports have been one of the central drivers of the recovery, accounting for about half the nation’s economic growth since the recession ended.”

“Exports are running at about $180 billion a month,” the Times reported, citing Commerce Department data, “up from $140 billion a month two years ago. They are currently growing at an annual pace of about 16 percent—a percentage-point higher than necessary to double exports to $3.1 trillion by 2015.”

But since January, European economies have collapsed, recovered and collapsed again. The U.S. jobs market has stalled. China—inexorable China—is wobbly. And while U.S. monthly exports hit $184 billion in March, they backed down to about $182 billion in April, the last month for which information is available.

Projections suggest slower export growth ahead. But worry not: The president hasn’t done the wrong things. It’s just that when it comes to growing exports, presidents simply can’t control the things that really matter. It turns out that generating exports—and export jobs—is less a function of government action than a result of things largely outside any president’s control.

THIS ISN’T A MATTER OF PARTISAN SPEECH but of understanding the limits of government where exports are concerned—something with which Republicans and Democrats both struggle.

Also Read: U.S. Must Focus on Exports

You can find the root of the problem in the president’s Jan. 27, 2010, State of the Union. The passage on exports is so brief that we can quote the whole thing here, courtesy of the White House website; we’ve retained the White House’s very helpful notes on crowd response:

Third, we need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. (Applause.) To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security. (Applause.)

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia. (Applause.)

Also Read: Exports 2.0

There are fewer applause lines in your average television sit-com, and probably fewer errors.

The president made at least two crucial mistakes. First, in creating the National Export Initiative, he suggested that what he was proposing was somehow path-breaking/remarkable/unprecedented. It wasn’t. Second, he assumed a link between job growth and exports. There isn’t.

Go to the NEI’s own website for evidence that the president’s new, bold initiative is actually neither new nor bold. You’ll notice that the government scribes who drafted content for the site work first to lower our expectations. On national television, in the State of the Union, we got standing ovations for the president’s sweeping visions of a mighty nation roused to macroeconomic action; here we get microeconomics, humility and honesty: “The decision to export is one fundamentally made by U.S. business owners, entrepreneurs and farmers.”

Translation: You’re more or less on your own.

On the other hand, they (the scribes) assure us that the government can indeed help. But the help will come in fairly conventional areas. “U.S. companies, particularly small and medium-sized enterprises, often face hurdles when trying to close an export sale including lack of readily available information about exporting and market research, challenges obtaining export financing, strong competition from foreign companies and obstacles thrown up by foreign governments,” the website reads. “This suggests an important role for the federal government.”

Important? Maybe. But not new.

ON MARCH 11, 2010, SIX WEEKS AFTER HIS SPEECH, the president signed Executive Order 13534, creating the National Export Initiative. The order itself is more symphonic flourishes and booming bass drums than real action. It created the Export Promotion Cabinet (whose members are heads of various government departments and agencies or their designees) who “shall meet periodically and report to the President on the progress of the NEI.” Oh, and they “shall coordinate with the Trade Promotion Coordinating Committee (TPCC), established by Executive Order 12870 of September 30, 1993.”

Bottom line: One new committee shall meet with an old one.

There follow some general ideas about trade missions, commercial advocacy, expanding export credit … you can practically hear the sounds of a major recycling effort.

The reason for the recycling: American presidents have no power over the real variables affecting U.S. export growth. At least one critic, Foreign Policy’s Daniel W. Drezner, understood this. Blogging around the time of the State of Union, Drezner, a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts, declared, “Obama’s National Export Initiative will have no appreciable effect on export flows.”

In just a few paragraphs in a mere blog post, Drezner discounted the president’s proposals from breathtaking to merely windy. “The fundamental drivers for U.S. exports are the rate of economic growth of the rest of the world and the exchange rate value of the dollar,” Drezner noted. “If the dollar depreciates in value and the rest of the world experiences high rates of economic growth, then exports will take off. Everything else would generously be described as window dressing.”

AS ANYONE WHO HAS PURCHASED plantation shutters, curtain rods or drapes can tell you, never underestimate the value—or the cost—of window dressing. It blocks out harsh light, creates a sense of privacy, hides our shame.

But what this particular window dressing also blocked or hid was the reality that an export economy—even one that doubles its output—doesn’t necessarily produce jobs. And creating American jobs was the point of the president’s National Export Initiative.

Even the most optimistic observers grudgingly concede that what’s good for exporters is not necessarily good for a blue-collar worker in Ohio. In “What Export-Oriented America Means,” his brilliant essay in The American Interest, Tyler Cowen says there are three reasons to believe American businesses will, in fact, double exports in the five-year period ending 2015—and then destroys our innocence vis-à-vis job growth.

FIRST, HE SAYS, AUTOMATION IS MAKING production cheaper in the U.S. “The less manufacturing has to do with labor costs and relative wage levels, the greater the comparative advantage of the United States,” he says.

Second, Cowen says, “the recent discoveries of very large shale oil and natural gas deposits in the United States” mean cheaper fuel for American industry, and exports of that fuel and associated technologies around the world.” Let’s all agree that when it comes to fracking, opportunity rocks.

Finally, because the U.S. specializes in the accouterments of middle-class life, the rise of a global middle class will boost U.S. exports. Cowen sums it up this way: “The closer other nations come to our economic level, the more they will want to buy our stuff.”

So, there you have it: “Export success will resurrect the United States as a dominant global economic power,” Cowen believes. “America will be wealthier, its products will have greater global reach, and it will largely cure its trade imbalance with China. The fear of American foreign policy being determined by Beijing, or constrained by the financial resources of the Chinese central bank, will be forgotten. No one will view the United States as the borrowing supplicant in the U.S.-China economic relationship, and, all else equal, our exports to China will increase friendly feelings toward that country.”

This model—of a resource-exporting country that manufactures high-end goods in worker-free workplaces—might not sound like a wealthy country, not in the sense of one that produces jobs in great numbers. But Cowen suspects there will be real advantages. “As a major exporter (among other strengths), the United States can be expected to maintain and even extend its investments in its Navy and Air Force,” he writes. “The current defense budget austerity won’t last very long, meaning, among other things, that it won’t be a fun time to be a pirate. Parts of the Pacific may, politically speaking, become a ‘Chinese lake,’ but the two economically dominant countries will favor both open seas for trading and some approximation of global free trade, albeit with remaining protections in China itself. The United States will solidify its relationships with Latin America, and the old dream of an economically integrated New World will largely come true. Our neighbors to the south, too, will be buying a lot more U.S.-made goods.”

And because they will have been wiped out by outsourced production or insourced-robot production, labor unions will no longer be in a position to shape this new America—either through opposition to free trade or via project-labor agreements on the massive infrastructure projects that will likely follow this boom.

And Cowen suspects Americans will still get their jobs—though at far lower rates of pay—“in health care, education, services and government, areas that are largely insulated from foreign competition and that will themselves seek out export markets.”

Cowen doesn’t point out that many of these jobs, of course, represent their own grave threat to the nation’s future: The financial burden of the defined-benefit pensions and health-care benefits associated with jobs in the public sector are already scuttling city, county and state budgets across the country.

If all of this has you feeling glum, consider the example of recent German export history—“inspiring,” Cowen says, but “sobering, too.”

“At the beginning of the last decade, Gerhard Schröder’s Social Democrat government decided to reform labor markets and revamp Germany’s export prowess,” he writes. “These policies succeeded beyond most expectations, but less well advertised is the fact that real wages in Germany’s export sectors have been stagnant or declining, depending on which measures are used.”

The alternative—no jobs at all—is too grim to contemplate.

“We will continue to cut a proverbial ‘deal with the devil,’ in which ever more jobs will be created in the relatively protected service sectors, while much of the economic dynamism and income gains will accrue to the capitalists, CEOs and managers who dare to export.”

SO, AN EXPORTING BOOM IS ALMOST INEVITABLE—whatever presidents do—but won’t necessarily/invariably/inevitably create jobs. Should you worry?

That depends on your political philosophy. Democrats like the president (and going back to Andrew Jackson and the urban political machines of the nineteenth century) believe the government has a responsibility to create work. That may be. But if you want an example of governments that focus on job creation, take a look at North Korea where human technology is expensive and people are cheap—and so men and women spend hours each day sweeping Pyongyang’s empty highway system with brooms like something out of your kid’s Halloween pageant or the Renaissance Pleasure Faire. Where one guy driving a machine in the U.S. can clean 40 miles of roadway in a day, thousands of North Koreans are required. Now that’s job creation.

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The idea that creating jobs is the full measure of the president’s activity is so pervasive that Republican activists have unconsciously accepted its corollary—that the job of business is to create jobs. Hence the Republican Party’s manipulative use of the descriptor “job creators” when they really mean to say “businesses” or “investors” or even just “rich people.” You don’t have to be a Democrat to guess that “job creators” was focus-grouped by conservative pollster Frank Luntz in order to appeal to President Obama’s constituency. But if you’re a business owner, you already understand its damaging implications: Republicans want Americans to believe that the primary job of business is job-creation.

It’s not. The primary goal of business is to create profit. There’s no question that it must do that in ways that are consistent with law and, more than that, morality. But jobs? That’s what a business produces as a byproduct when it has no other way to produce a profit.

The president’s larger ambition in 2010 was arguably to rally Americans to a point of view—to see the world as a marketplace for American products. That was a reasonable, legitimate and even honorable goal. But his blueprint for doubling exports—promising that government could manage the biggest things (foreign currency and economy) as well as the little things (that he would, as he said in his 2012 address, “go anywhere in the world to open new markets for American products”) was unsound in principle. Exports do not necessarily produce jobs. The world is not, as the president’s plan assumes, a place of competing nation states involved in zero-sum/binary/export-import calculations and easy-to-manage domestic job-growth. It’s more like chaos theory or multi-level chess.

Nor can the president bash American companies for moving jobs overseas; those companies are often also—in the real world, the one that’s more like multi-level chess—America’s leading exporters. And those exporters are making investments overseas and growing their wealth without much regard for boundaries—and no honest desire to grow jobs for the sake of job growth. They are not “job creators” except by accident. Sometimes, they’ll move jobs overseas. Sometimes they’ll bring them back to the U.S.—“insourcing,” has become a buzzword as popular among Beltway economists as the English boy-band One Direction is among tween girls.

If they are smart, and if they can, manufacturers will simply reduce the labor required to produce a product or service.

“The fact of the matter is these are the firms that account for two-thirds of American exports,” Gary C. Hufbauer said of companies that sometimes move jobs offshore. A senior fellow at the Peterson Institute for International Economics, Hufbauer noted that those offshore flows of capital and jobs “are intimately related to their exports. The notion that you can punish U.S. firms for investing abroad and still see exports rise is bunk.”

Bunk. Even the president’s friends and trusted associates understand this. In February, the Daily Caller, an online news site, reported that Matthew Rubel, one of the president’s private-sector trade advisers, also sits on the board of a Minnesota-based company called Supervalu. Months before Rubel’s September 2010 appointment to the president’s Advisory Committee for Trade Policy and Negotiations, Supervalu announced that it would move “149 white-collar jobs—including numerous high-tech jobs—to an India-based info-tech firm.”

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