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Big Data, Big Business, and Big Government

How bureaucrats are keeping people in the dark about the Export-Import Bank

When the feds disappear huge amounts of data about a dysfunctional, cronyist federal agency without warning, it should raise a few eyebrows. When the bureaucrats evade questions about what happened to the trove of facts and figures, alarm bells should start ringing. And when they staunchly refuse to restore the missing data, despite an outcry from researchers and activists, it's time to take matters into your own hands.

For years, many in the free market movement—myself included—have argued in favor of abolishing the U.S. Export-Import Bank, a New Deal–era agency that exists to facilitate a relatively small number of domestic exports through its taxpayer-backed credit programs. The fundamental case against the Ex-Im Bank is simple: It's not the federal government's job to subsidize private businesses, period.

Unfortunately, principled arguments against programs like this one are a tough sell to policy makers, Republicans and Democrats alike. That's because most politicians are slaves to special interests who have gotten very good at explaining why small businesses or producers of green energy or companies located in hard-up congressional districts should be the exception to that rule. It's also difficult to rally the losers in this bargain against it, because the costs are dispersed across a mass of victims, most of whom either are unaware of the harm they are incurring, or know but lack the motivation to make their objections heard.

Ex-Im, for example, artificially reduces the cost to foreign airlines of buying Boeing planes. Politically powerful Boeing reaps the rewards, but U.S. airlines, which don't benefit from the subsidies granted to their overseas competitors, are harmed. However, a U.S. carrier may not appreciate the disadvantage it's at until after the savings it isn't getting have allowed a foreign airline to open a new route or reduce its ticket prices. By then, it may be too late to speak up.

And the U.S. airline isn't the only victim. Employees of the now-less-profitable domestic carrier could have their hours cut, their pay and benefits reduced, or their jobs eliminated. Yet even they may not be able to see that a government program is at the root of their troubles. The same is true for the millions of American taxpayers whose pay is being skimmed to benefit a foreign corporation.

That's where having access to government data becomes so important. One way to mobilize victims is to stoke their outrage. For years, I (and others) have done precisely that by using the Bank's own data to produce charts showing that 40 percent of all Ex-Im activities benefited Boeing alone; that 64 percent benefited just 10 giant corporations; that the top foreign buyer was the Mexican state-owned oil company Pemex; and that, contrary to supporters' claims, less than 20 percent of the money being doled out actually benefited small businesses.

The numbers I used to make those charts were stored at data.gov, a federal website launched in 2009 to increase the public's access to government information that isn't private or restricted for national security reasons. The data weren't perfect by any stretch of imagination—the Government Accountability Office and the Bank's own inspector general have repeatedly found that the agency's recordkeeping is subpar and needs improvement. There was a great deal of information missing, and it was not uncommon to find beneficiaries marked as "unknown" or "various U.S. companies"—not exactly helpful terms. It was also common to find the names of companies misspelled or identified differently on different forms, which made working with the numbers even harder.

Still, the dataset had the benefits of stretching back to 2007, being downloadable in Excel format, and containing more granular information than other sources. Despite its flaws, it was essential to those of us who were investigating Ex-Im—that is, until it was suspiciously removed from the website in the summer of 2014.

The disappearance of the key dataset we had been using to undermine the claims of Ex-Im backers happened at a convenient moment for the Bank, which last summer was coming under increasing scrutiny on Capitol Hill. Officials had begun sending out press releases and releasing emails touting Ex-Im's alleged benefits to the economy and its workforce. Without access to the government data, it was nearly impossible to refute the officials' dubious claims.

Thankfully, Mercatus Center researcher Andrea Castillo had demonstrated the good sense to download a clean copy of the dataset in May 2014, just weeks before its sudden disappearance. With the help of some colleagues, we made the numbers available in February on a website called ExImUncensored.com. We also included state-level numbers, which data.gov doesn't collect at all, presented in a more user-friendly format than the Bank's website.

The move attracted the attention of a few journalists, including reason's Scott Shackford, who called the Bank to ask about the data's whereabouts. He didn't get an answer. Indeed, none of the journalists who inquired about the missing numbers did. But within a couple of days of those requests, the data unceremoniously reappeared at data.gov.

At first glance, it appeared the new dataset included more information than the old one. It listed fiscal year 2014 transactions occurring after the original data were taken down, for instance, and contained new fields identifying the city and state of each primary exporter.

But that's where the improvement stopped. The dataset was still a mess, with lots of fields marked as "unknown" and numerous company names misspelled. Whereas the original dataset had displayed denied applications, that information was nowhere to be found on the new one. Worse, the "improved" set of numbers omitted three critical fields that had been available in the original: Primary Buyer, Primary Source of Repayment, and Primary Supplier. Later on, when we checked the number of approved transactions for 2014 against the number listed in Ex-Im's 2014 annual report, we found almost 1,000 fewer entries in the dataset than the 3,746 the Bank was claiming had taken place.

Let me illustrate with an example why removing all those fields matters: From the old dataset, I knew that the foreign buyer that had benefited the most in dollar amounts from Ex-Im financing was Pemex. Despite having a market cap of $416 billion, the Mexican petroleum giant received over $7 billion in U.S. taxpayer-backed financing to facilitate deals with American exporters between 2007 and 2013. Looking at the new dataset, with its missing field for Primary Buyer, you would never know. This information is important because it shows not only that Ex-Im provides subsidized loans to a foreign oil company, but also that an arm of the U.S. government is supporting activities that conflict with the Obama administration's declared support for "green energy."

I hope that the Ex-Im Bank will soon restore the missing fields. I also hope they'll use the opportunity to clean up their dataset, making it easier for the public to use. Until then, those who need the missing numbers can find them on ExImUncensored.com. Our website doesn't include transactions after May 2014, but it can sustain us for now.

The bottom line is that transparency in the form of more and better data is important for those of us fighting in the trenches to rid the country of destructive government programs. Even when faced with charts proving that Ex-Im primarily benefits major corporations that do not need the help, an alarming number of policy makers continue to support the Bank. It seems they care more about retaining the support of special interests than doing right by the American people.

Yet thanks to the data we do have, the public is starting to awaken to the reality of Ex-Im. A recent poll from Benenson Strategy Group and SKDKnickerbocker found that registered voters were fairly evenly divided on the Bank, with 46 percent of respondents saying Congress should ax it. Let's hope the tide is finally turning against this crony relic of the 1930s.

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  • jay_dubya||

    Only 46% of voters support axing a taxpayer funded set of multibillion dollar IOUs to Boeing an a Mexican oil company? The US is well and truly fucked.

    If crony capitalism this explicit remains popular there is no chance of getting rid of the programs that are rapidly crippling Federal & State budgets: Police & Firemens pensions, Medicare & Medicaid. Most voters only heard of EXIM from their enlightened monarch's support for the "bank" as an economic neccessity - a view that requires a complete failure to read even the most cursory explanation of what EXIM does to remain uncorrected. God help those who suggest that our noble heroes (cops & firemen) deserve anything less than a lifetime six figures for 20 years of work or that the most decrepit near death centinarian doesnt deserve millions of dollars of other peoples money to pay for painful & degrading intensive care without regard for quality of life or human dignity.

  • jay_dubya||

    Americans spend stolen tax payer money with all the fanaticism and empty headedness of a book burning. Instead of books, its cash we throw into the fire.

  • crab_apple||

    It's patriotic to put money in the national money hole.

  • Fist of Etiquette||

    If it's not the business of the federal government to choose winners and losers, then whose responsibility is it?

  • Swiss Servator, Switzier!||

    Mine.

    *assumes throne*

  • Florida Man||

    *ties sword over thrown with extraordinarily thin thread*

  • Swiss Servator, Switzier!||

    Can the EXIM loan us some alt-text?

  • Florida Man||

    They had 11 days, you'd think they come up with something.

  • MattFC||

    Ive read your ex-im articles over at NRO Veronique and I think you're doing yoeman's work on the matter. One request: after you get this boondoggle dispersed with, could you take up the Jones Act? That other piece of 1930's protectionist legislation that had crippled America's shipbuilding/maritime industry? Much appreciated.

  • bassjoe||

    It'll never go away.

    Boeing has dispersed its manufacturing across God knows how many congressional districts, as most large defense contractors do. It can make a plausible argument to every representative that "X number of people will lose their jobs in your district if you don't reapprove the ExIm bank". Whether that's actually true doesn't matter; no politician will want to risk those attack ads. On top of that, Boeing is based in Washington, a strong D base so it has one part of our duopoly in its back pocket.

    Pemex being the biggest foreign buyer is interesting. It means that companies that specialize in oil extraction / processing / transport / retail sales are the main American beneficiaries. Those companies, I imagine, generally support Republicans so the other part of the duopoly is covered.

  • Mindyourbusiness||

    Yep. Most transparent administration in U. S. history.

    /spits

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  • Nike Free Laufschuhe Online||

    Very corrupt bureaucracy, sad we civilians.

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