The Export-Import Bank,
denounced by Sen. Barack Obama in 2008 as “little more
than a fund for corporate welfare,” gives loan guarantees and other
forms of supra-market financing to foreign countries and companies
that buy American exports. Well, products made by the handful of
companies that get this sweetheart backing.
One of the single-biggest beneficiaries of Ex-Im backing is
Boeing, a struggling little airplane-making outfit with a market
value north of $90 billion. According to Reason columnist
and Mercatus
Center policy scholar Veronique de Rugy, between 2007 and 2014,
companies with operations in Washington state accounted for 44
percent of total disbursements of Ex-Im largesse. By which she
means Boeing.
The Ex-Im Bank—which President Barack Obama supports—is a pure
example of concentrated benefits and distributed costs. Writes de
Rugy:
The truth of the matter is that the Ex-Im Bank yields negligible
benefits for the vast majority of state exports, aside from one big
outlier. These charts make it clear that the Ex-Im Bank primarily
exists to benefit Boeing at the expense of everyone else in the
country.You might wonder why lawmakers would refuse to acknowledge this
reality. For one, politicians are pressured by an army
of lobbyists representing
powerful companies who are committed to protect their perks even if
it hurts everyone else. But politicians are not exactly shrinking
violets, here. They like being able to point to the small
businesses and American jobs that they “support” through the Ex-Im
Bank.What is much harder is to point to the millions of victims of
the Ex-Im Bank. Taxpayers, for instance, bear a massive $140
billion exposure so that giant corporations like Boeing
and General
Electric can make a little more profit each year. Should
the bank’s portfolio go south, normal people like [us] will be on
the hook.
Read the whole column at the Washington Examiner.
When Rep. Kevin McCarthy came in as House
Majority Leader in June (after Eric Cantor was sent packing in his
primary), his first big, bold statement was to say House
Republicans would act to kill the Export-Import Bank, which comes
up for reauthorization at the end of September. With few
exceptions, GOP members are already starting to dodge that stand,
instead talking about how they’ll only vote for its renewal if
stringent new reforms are put in place. At the Lincoln Labs Reboot
conference in San Francisco, I spoke with Rep. Cathy McMorris
Rodgers, a Republican who hails from eastern Washington. When I
asked point blank whether she would vote to kill the bank, she said
she was waiting on what reforms might be included in the
reauthorization. “There’s some questions that need to be answered,”
she told me. “I’ll see what that looks like when it comes.” In
other words, put her down for a yes.
McMorris Rodgers, who voted to reauthorize in 2012, is hardly
alone in her position. In 2012, all Democratic senators voted in
favor of the bank, along with 27 Republicans (19 Republicans
voted against it). In the
House, 183 Democrats and 147 Republicans voted in favor of it,
with just 93 Republicans and zero Democrats voting against. All
eight members of the Washington state delegation (four Ds and four
Rs) voted in favor, as did both Democratic senators.
From a small-goverment perspective, there is no reform that can
“fix” issues with the bank’s operations, since it shouldn’t exist
in the first place. It absolutely helps pick winners and losers in
the marketplace by backing the purchase of some companies but not
others and, more important, puts taxpayers on the hook for up to
$140 billion in loan guarantees. Which of course cost nothing—until
they cost a lot.
Watch Reason’s “3 Reasons to KILL the Export-Import Bank
FOREVER!,” featuring a special appearance by Art Vandelay:
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