The Export-Import Bank is the official United States credit agency. Among its stated goals are helping “level the playing field in a brutally competitive world” and trying to “fill gaps in the trade finance market.”
Debate has been raging in Washington over whether to renew its charter, which was due to expire on September 30. A nine-month extension approved last week let Congress off the hook for now, and Ex-Im boosters are wasting no time ratcheting up the rhetoric—in particular, the “war on women” battlecry, as Red State’s Joe Cunningham reports:
The Democrats, wielders of the “War on Women” rhetoric and the ones who made ending “corporate welfare” a party cry, have made a clear exception for the Export-Import Bank. Cronyism is a money-maker and a power guarantee. The hypocrisy alone of a president who ran on leveling the playing field staying silent on this issue. In 2008, we know he ran on ending it. In 2012, we know he called for Congress to extend its lifespan.
In 2014, he and his party once again want to renew it.
Among the biggest forces behind the push to renew it is a large contingent of lobbyists and public relations groups pouring money and manpower into the offices of lawmakers, intent to make sure money flows to their clients. One of the biggest groups behind the renewing of the Ex-Im Bank is the U.S. Chamber of Commerce, which is now borrowing some of the aforementioned rhetoric from the Democrats.
The U.S. Chamber of Commerce, the foremost lobbying force for Ex-Im, recently posted an article on how crucial the bank is to women-owned businesses. Citing the chamber’s own research on women entrepreneurs, writers Stefanie Holland and Roberta Phillips note that “women-owned firms have grown at one-and-a-half times the rate of other small enterprises in the last 15 years and now account for nearly 30 percent of all new businesses.”… the main problem for small businesses, “especially women- and minority-owned businesses” is a lack of access to capital.
Clearly, the only solution is government aid.
Clearly indeed. Too bad the research the Chamber cites doesn’t say anywhere that the remarkable growth of women-owned businesses is because of government—much less Ex-Im. What’s more Ex-Im is more likely to harm American businesses—regardless of whether they're owned by women or men. According to a recent analysis by the Cato Institute’s Daniel J. Ikenson:
That Ex-Im is currently self-sustaining and generating revenues is entirely beside the point and is no more reassuring than a drunk driver rationalizing that he made it home safely last night so there’s no danger in drunk driving tonight. … Recall that Fannie Mae and Freddie Mac also showed book profits for years until the housing market suddenly crashed and taxpayers were left holding the bag.
Not only are taxpayers at risk, but so are American companies that become, as Ikenson puts it, “the collateral damage” of foreign competitiotrs benefitting from low-rate financing:
It turns out that for nearly every Ex-Im financing authorization that might advance the fortunes of a single U.S. company, there is at least one U.S. industry – and often dozens or scores of industries – whose firms are put at a competitive disadvantage because supply is being diverted, market power is being shifted, and the cost of capital is being lowered for their foreign competition.
Ikenson identifies well over two dozen American industries disadvantaged by Ex-Im policies, from pet food companies to toy manufacturers to surgical equipment companies.
Two years ago we were subjected to Obama’s “you didn’t build that” lecture to American business owners. Perhaps now it’s time to return the favor: Mr. President, you and the Ex-Im didn’t build my business. Corporate welfare didn’t build my business. Competition, hard work, and opportunity did.