Even then-candidate Obama said in 2008 that the Export-Import Bank is “little more than a fund for corporate welfare.”
For once, he is exactly right.
The bank even forces the taxpayer to foot the bill when the bank fails and needs bailing out. Luckily, the bank is set to terminate at the end of the year and conservatives nationwide are urging their elected official to not reauthorize it and let it expire.
The Export-Import bank is the official credit agency of the United States and was originally created to help the economy by boosting American exports. It serves as a classic example of big government intervention. The reality is the bank artificially boosts exports and only creates jobs in the export industry while simultaneously destroying the jobs of domestic competitors.
For example, the Air Line Pilots Association argues that the bank’s recent loans to foreign airlines eliminated over 7,500 jobs for domestic airlines. In today’s down economy, we cannot afford to reauthorize any bureaucratic, red-tape producing entity that stifles job creation and prevents America from getting back to work.
Supporters of the bank like to point to the fact that the Export-Import Bank is privately run. However, the federal government has to back all of its loans, resulting in hardworking taxpayers like you and me being forced to bail it out if it fails.
The financial crisis of 2008 wasn’t a long time ago, yet our elected officials never seem to learn the lesson that federal credit programs inevitably cost taxpayers money. Sadly, the bank is currently losing $200 million a year, according to a recent MIT study, which means a bailout could be on the horizon again.
The power and influence of its well-connected beneficiaries have been the only reason the Export-Import Bank has been reauthorized in the past. Making matters worse is that the bank isn’t driven by a profit motive, due to the backing it receives from the federal government.
This only allows the bank to be even more influenced by cronyism.
For example, in 2010, 90 percent of its $13 billion in loans and guarantees went to just 10 large, multinational corporations. The bank also gave millions to the infamous Solyndra, a politically-connected company that went bankrupt shortly after.
The private sector and the free-market should be in the business of fighting for and increasing American exports.
If the government was removed from the equation, private firms could step in and extend credit without burdening the taxpayers, without obstructing free trade, and without only dealing to politically-connected big businesses and foreign consortiums.
Congress and the administration should support plans to terminate the Export-Import bank because it provides an unfair advantage to a handful of foreign and domestic companies at the expense of the American taxpayer.
The time has come to let the beltway billionaire bank expire.
Dustin Zvonek is the state director of Americans for Prosperity-Colorado.