Fred Hochberg disagrees that his federal agency subsidizes business. It loans taxpayer money and gives taxpayer-backed loan guarantees to help U.S. manufacturers (mostly Boeing) sell goods overseas. Hochberg, President of the Export-Import Bank, says these don’t count as subsidies, despite fitting the common understanding of the word and the OECD definition of “subsidy,” because his default rate is so low that his agency actually “makes a profit.”
Semantics aside, President Obama is clearly happy with Hochberg’s work, as he has renominated him for another four-year term at Ex-Im:
“Under the direction of Fred Hochberg, the Ex-Im Bank has set new records in exporting U.S. goods and services and expanded our reach into new international markets,” Johnson, a Democrat, said in a statement.
Hochberg, an openly gay member of the Obama administration, is a former president of Lillian Vernon Corp, a mail order company founded by his mother that he helped build into an international publicly traded direct marketing corporation.
During Hochberg’s tenure, the Ex-Im Bank has provided record amounts of financing for U.S. exports, exceeding $35.7 billion in the 2012 budget year.
Ex-Im’s main tool is the loan guarantee. Under Hochberg, a vast majority of Ex-Im guarantee dollars have financed Boeing exports. Also, Hochberg has expressed his intention to subsidize more corporate jets.