We have always been a nation of free enterprise. It has set us apart from most others and allowed us to lead the world in innovation and entrepreneurialism. But today, those underpinnings of our success are under threat. Government has become a behemoth that is overtaking industries and distorting markets in such a way that competition and self-reliance as we know it are barely recognizable.
The reauthorization of the Export-Import Bank is a case study in Washington bureaucrats picking winners and losers and interfering with the free market. It’s corporate welfare that is hurting economic growth and costing our nation jobs in one of the most stagnant economies in American history.
The Ex-Im Bank was a New Deal program founded in the mid-1930s to assist with the export of American goods. Among other things, it provides loans using funds backed by the full faith and credit of the American people. This means Joe and Jane Taxpayer are responsible for the bank’s activities.
The Ex-Im Bank is seeking to be reauthorized by Congress and have its lending cap raised by tens of billions of dollars. This would allow it to “lend” more money to U.S. companies exporting goods to foreign entities that compete with American businesses.
Yes, unbelievably, we are subsidizing foreign companies so they are in a better position to compete against our own. This, in spite of the fact that Ex-Im’s own charter clearly states it can only grant loans to credit-worthy entities and must never undermine American companies.
Yet, political inattentiveness and failure to conduct proper oversight has allowed Ex-Im subsidies to flow into the coffers of a handful of questionable businesses, exposing the American people to potential losses. The beneficiaries include Solyndra, the now-bankrupt solar panel company intended to lay the groundwork for President Obama’s “green jobs” initiative. Another well-known recipient of Ex-Im’s generosity was Enron, and we all know how that turned out.
But maybe the most egregious example of how dysfunctional and misguided the Ex-Im Bank’s actions really are is present in the airline industry. The bank provides financing to foreign airlines that in turn purchase American aircraft, allowing them to compete against U.S.-based carriers. These foreign companies use our subsidy to offer lower prices since American companies cannot qualify for this corporate welfare, and they, in turn, lose business.
When people talk about crony capitalism, this is an example in its purest form.
Over the past several years, the American government has grown and expanded like a plague; the wrath of which has left hundreds of thousands out of work, and placed an unfair burden on future generations.
We are $15 trillion in debt due to huge overspending. And it is no time for Washington to reauthorize the Ex-Im Bank and give it more money. The market should dictate trade flows, not bureaucrats and politicians.
Washington has turned a blind eye to the unintended consequences of such loans, but we have not. No one who calls themselves fiscal conservatives should support reauthorization of the Ex-Im Bank.
Chris Chocola – Richmond Times-Dispatch