The Corner

More Evidence That ‘Pro-Business’ and ‘Pro-Market’ Don’t Go Together

Congressional Quarterly reported on Thursday that some tea-party and GOP members of the House have sent a letter to press the House leadership to agree to the Export-Import Bank reauthorization:

On Thursday, 30 Republicans wrote to Cantor and House Speaker John A. Boehner, R-Ohio, urging them to “give serious consideration to a multi-year authorization over one for a shorter period of time.” The lawmakers said a multi-year deal would provide more certainty to businesses, and allow them to enter into longer-term contracts.

Among those signing the letter were tea party-backed members Cynthia M. Lummis of Wyoming, Vicky Hartzler of Missouri, Bobby Schilling of Illinois and Nan Hayworth of New York.

The very “pro-business” and very not-pro-market letter, which you can find here, is disconcerting for many reasons, the least of which is that Republicans should understand that crony capitalism isn’t capitalism. Again, it is not the role of the federal government to prop up a few selected companies and shelter them from adversity caused by competitors — even those helped by foreign governments. The Ex-Im Bank represents corporate welfare at its finest; in this case, the beneficiaries are the largest businesses in America.

The letter repeats many of the usual half-baked claims about the bank, such as the idea that because the French government provides support to Airbus, like other governments do for their large manufacturers, it means the U.S. government should support its aviation manufacturers. (I would like to argue that if the French government does it, we probably shouldn’t.) First, there is no evidence that Boeing (the biggest Bank beneficiary) wouldn’t be able to compete or couldn’t sell planes without the government loans, even if it claims that’s the case. Boeing took in over $64 billion in revenue in 2010, with $31 billion of that money coming from commercial-airplane sales. Are these guys really saying that this is a company that needs taxpayers’ support? Or are we saying that it is the role of taxpayers to guarantee that Boeing makes the largest possible earnings?

The letter also claims that this doesn’t cost taxpayers a dime. This has been proven incorrect. In fact, in 2012, the total subsidy costs for the entire Ex-Im Bank will be higher than $200 million, in addition to the rest of the Bank’s costs.

The letter is here, so you can judge for yourself. For more arguments against the Bank go here, here, and here.

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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