Created by Franklin Roosevelt, the Export-Import Bank gives taxpayer-back loans, loan guarantees, and credit insurance to foreign companies seeking to buy products from U.S. manufacturers.
It’s coming up for reauthorization later this year and for the first time in a long time, opponents have a real shot at ending this excresence of crony capitalism.
Here are three reasons to kill the Export-Import Bank forever.
1. It’s expensive.
In 2012 alone, Ex-Im authorized $36 billion in loans, guarantees, and insurance. The bank can carry a portfolio of up to $150 billion, meaning that taxpayers could be on the hook that much money.
2. It doesn’t boost U.S. exports.
According to the Mercatus Center’s Veronique de Rugy, Ex-Im’s favored firms account for around 2 percent of the total dollar value of American exports and 2 percent of the jobs associated with exports.
3. It’s crony capitalism at its most obvious.
Although Ex-Im’s defenders like to claim the bank levels the international playing field for small U.S. companies, virtually all of the agency’s resources go to supporting giant, politically connected firms such as Boeing, General Electric, Caterpillar, and John Deere. The American taxpayer shouldn’t be subsidizing their market share at home or abroad.
The new House Majority Leader, Kevin McCarthy, has said he is against reauthorizing the Export-Import Bank. He’s joined by representatives and senators on both sides of the aisle who are offended by the uselessness and cronyism of Ex-Im.
Hopefully, this is one New Deal–era policy that will finally disappear for good.
About 2 minutes. Written by Nick Gillespie and produced by Todd Krainin.
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