The Corner

Economy & Business

Ex-Im Cronyism Redux

If you look around, you’ll see that corporate welfare is everywhere. Occupational licensing, certificate-of-need laws, farm subsidies, and more. And boy, is it everywhere when the Export-Import Bank is involved.

Last week, Representative Charlie Dent (R., Pa.) introduced a bill trying the make the Export-Import Bank less accountable. This is yet another attempt by the lawmaker to get rid of the bank’s quorum requirements that there be three members on the board to approve loans of more than $10 million. Needless to say, this move is not meant to benefit the little guys but the Boeings and GEs of the world. The bank has only had two members for the last two years and yet, as you may have noticed, the sky didn’t fall. Exporters are exporting, foreign buyers are buying U.S. goods, Boeing is getting richer selling planes that don’t even have government support, and GE is still doing well too.

We shouldn’t be surprised by Dent’s support of cronyism. He has done this twice before. Also, back in 2015, he voted against requiring Ex-Im to use fair-value accounting principles, which would have made its cost more transparent. He voted against prohibiting Ex-Im transactions that aren’t competing with foreign export credit agencies, making it clear that his support for Ex-Im is not conditional to the usage excuses used by its advocates. He voted against increasing small-business mandates for the Bank, showing his support for big-business cronyism. He also voted against requiring Ex-Im customers to provide a guarantee and collateral, which would have reduced taxpayers’ exposure. He also voted against blocking Ex-Im deals where foreign countries have sovereign-wealth funds north of $100 billion. In other words, he is for lending large sums of money at lower rates to large and wealthy companies, even if they are state-owned ones where the state in question is wealthy, with plenty of access to capital.

There is more, but I would be remiss if I didn’t highlight this particular vote. Dent voted against prohibiting Ex-Im from lending to state sponsors of terrorism, including Iran. He was joined by a surprisingly large number of Republicans, including Representative Stephen Fincher (R., Tenn.), who is likely to run for Senator Bob Corker’s seat in Tennessee against Representative Marsha Blackburn. The bottom line is that all these lawmakers believe it is A-OK for Ex-Im to back deals for the sales of Boeing planes to Iran.

Finally, he was very eager to use a discharge petition in order to renew the bank’s charter after it expired on July 1, 2015. This was offensive in so many ways: With this move, not only was he going around the will of a majority of his own party, but also around Chairman Jeb Hensarling (R., Texas), who is both from his own party and head of the committee of jurisdiction.

I noted the other day that a Republican majority doesn’t guarantee more free-market and small-government policies. As a someone pointed out — I think it was Andrew McCarthy — the Republican party is more a coalition of interests than a party that represents a particular ideology. That’s right. Sadly, it is also a coalition where a majority of its members have very moderate free-market principles. The Obamacare repeal debacle is a good example of that. Mr. Dent’s behavior with Ex-Im and other issues got him a lifetime score of 48 from the Club for Growth. Hopefully, in his quest to revive cronyism for the big guys, he will be defeated once again.

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

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