In the last two days, the Washington Examiner’s brave Tim Carney has been reporting live from the Ex-Im Bank conference. It means that he had to sit through sessions where he heard both former president Bill Clinton and Chicago Mayor Rahm Emmanuel rationalize how they could be simultaneously in favor of free trade and of export subsidies. (Better him than me. Go Tim go!)
The Ex-Im Bank is such an infuriating program that this morning I have yet another piece making the case that Congress must abolish it. The head of the program yesterday argued, for instance, that giving money to big exporters isn’t corporate welfare. It isn’t even a subsidy. Really? Here are some facts:
Ex-Im data shows that Bank activity is highly concentrated in certain industries — primarily aviation, oil-and-gas exploration, and manufacturing.
The aircraft industry alone benefited from 78 loans and guarantees worth $12.6 billion, or 39 percent of all transactions in 2011.
82 percent of Bank funds go to a handful of America’s largest exporters.
Of the $32.7 billion in fiscal 2011 appropriations, Boeing alone benefited from 49 separate Ex-Im Bank deals worth $10.8 billion. This has been the case for decades.
The number of clients lobbying Ex-Im increased from 23 in 2008 to 57 in 2011.
The number of companies whose products were purchased with borrowed funds guaranteed by the Bank has grown from 647 in 2007 to 789 in 2011 — a 22 percent increase.
And of course the argument that, without the Bank, U.S. exports would suffer greatly is bogus. #more#The Ex-Im Bank is a mere footnote in the overall export market. As Sallie James of Cato notes, “the $34.4 billion of U.S. exports supported by the Ex-Im Bank in FY 2010 represents less than 2 percent of the $1.8 trillion worth of all U.S. goods and services exports in calendar year 2010.”
Also, if the Bank is as profitable has it claims to be, why won’t private lenders step in to fund US exports? Oh but wait, they do, as James’ data shows.
Finally, Dan Mitchell reports on his blog a few days ago that, as is the case in many government agencies, lobbyists will do whatever it takes to get money for the their programs. One way to do it is to pay off directly or indirectly the people who are making the decisions about how to spend taxpayers’ dollars:
Here’s another example, explicitly showing how big business and big government get in bed together to rape and pillage taxpayers. The sleazy details have been reported by Bloomberg.
“Exxon Mobil Corp. and its partners in a $15 billion Papua New Guinea gas project last year paid the travel expenses for employees of the U.S. Export-Import Bank as it considered whether to help fund the venture. The four workers ran up $97,367 in bills traveling to London, Tokyo and the South Pacific, according to data compiled by the bank. They flew business class, viewed the project’s route by chartered aircraft and were entertained by costumed villagers. Eleven months later, the bank approved $3 billion in financing for the liquefied natural gas facility, the biggest transaction in the agency’s 75 years.”
What does it say about the American capitalist system that a growing number of companies get propped up by the government? It says that interest groups and lawmakers’ willingness to cater to them has radically changed American governance for the worst. Today, Congress has become a tool to American numerous interest groups.
Congress, it’s time to do the right thing: Abolish the Ex-Im Bank.
My piece is here. Some of my posts on the issues are here. Also read Tim Carney’s piece from yesterday here, and cry.
Here is the chart: