No: Bank is ‘government-sponsored slush fund,’ should be shut down
What do Solyndra, Enron and Mexican drug cartels all have in common?
The answer may come as a surprise to most Americans – it’s a little-known agency called the Export-Import Bank, a government-sponsored slush fund that gives taxpayer-backed loans and loan guarantees to foreign entities to buy American exports. Solyndra, Enron, and even Mexican drug cartels have benefitted from these wasteful subsidies.
Primarily, the bank provides the vast majority of its subsidies – over 60 percent — to one massive company, Boeing, to export airplanes. It’s even earned the nickname “The Bank of Boeing.” The Export-Import Bank claims that this is to counteract export subsidies from foreign countries, but that argument is belied by the bank’s own annual report, which states that less than one-third of its subsidies are to counteract foreign export subsidies.
The damage the bank does by picking winners and losers cannot be understated. Ask taconite miners in Minnesota – the Export-Import Bank gave a subsidy to the richest person in Australia to buy mining equipment from Caterpillar, giving them a competitive advantage over American miners.
American mining company Cliffs Natural Resources asked the Export-Import Bank to deny the loan. The bank refused.
In fact, many of the talking points produced by the bank, large corporations, and the well-connected lobbyists who benefit from the bank’s subsidies are easily discredited.
There’s the idea that the bank doesn’t lose money for the taxpayers, which the non-partisan Congressional Budget Office recently exposed as budgetary sleight of hand – the bank is estimated to cost taxpayers $2 billion using fair-value accounting.
Even more bizarrely, the bank claims on its own website that it doesn’t provide subsidies (Up is down! Down is up!). If the bank does not provide subsidies to corporations, then why does it exist at all?
The Export-Import Bank’s actions are nothing more than market-distorting subsidies that pick winners and losers in the private sector.
Market forces should dictate trade flows, not bureaucrats and politicians. The sooner we can shut down this corporate welfare dispensary, the better.
Chris Chocola, a former congressman from Indiana, is the president of the Club for Growth, a Washington, D.C.-based, national network of more than 100,000 pro-growth, limited government Americans who share in the belief that prosperity and opportunity come from economic freedom.