The head of the Export-Import bank just got named as the chief investment officer for the Trash Asset Relief Program. Be afraid. Be very afraid. And not just because we’ve got another of Bald midwestern ex-Wall Streeter running our banking system.
James H. Lambright will serve as the interim Chief Investment Officer for the Tarp. He comes to us after three years of running the Ex-Im Bank, one of the greatest corporate welfare boondoggles running. His great accomplishment at Ex-Im was removing it Congressional oversight and running it as an off-balance sheet special purpose vehicle.
The government describes the Ex-Im bank’s huge liabilities and off-balance sheet chicanery as Lambright’s qualification for the job of being top investment officer for the Tarp.
“Head of the Export-Import Bank since July of 2005, where he managed 400 employees and a $60 billion credit portfolio with $100 billion in financing capacity,” the press release from Treasury says. “Successfully converted the Export-Import Bank to a self-financing agency, returning positive net income to the Treasury while taking no appropriated funds from Congress in FY 2008.”
But that’s just spin. Here’s how one critic (who happens to be my brother, Tim Carney) explained what really happened:
“First, if Ex-Im generates enough revenue to fund all of its operations, why is it a government program at all? If it makes a profit, why not privatize it?
But being a government agency provides Ex-Im an advantage a private bank might not have: taxpayer bailout. Ex-Im is currently exposed to about $60 billion in outstanding loans and loan guarantees.
Some of that financing is in places such as Azerbaijan, Zimbabwe and Ethiopa. If any of those loans default, the federal government foots the bill — whether or not Ex-Im is getting an annual appropriation.
On a budgetary level, cutting off Ex-Im doesn’t help us out, either. While taxpayers lose an expense, we also lose a source of revenue — including the repayments on the loans we’ve already made through Ex-Im.”
So he ran a corporate welfare scheme designed to appear to have no cost to taxpayers while putting us as risk for billions. Come to think of it, maybe he really is the perfect guy to run the Tarp.