O-Sense
Almost everything I know about the
Export-Import Bank can be printed on a fingernail. Even handling family bank statements
is way above my pay grade.
I’m no more of an expert on global marketing – which, in my mind, is making hotel reservations and taking my golf clubs to St. George. That is a foreign country, isn’t it?
But there is a reason for people to pay attention to global marketing, since the Gem State does more than $5 billion in business on the export market.
The Ex-Im Bank, or nation’s official export credit agency, has become a political hot potato. I sense that Jeff Sayer, Idaho’s capable Department of Commerce director, probably knows what he’s talking about in describing the Ex-Im Bank as an important tool for companies transacting business overseas.
Wayne Hoffman, director of the Idaho Freedom Foundation, has a different view.
“It is pure corporate welfare and government intervention in the free market,” Hoffman said of the Ex-Im Bank. “It benefits big business at the expense of small ones. You can’t support capitalism, free markets and American entrepreneurism and simultaneously support the continued existence of the Ex-Im Bank.”
Indeed, free enterprise is the American way. So is the National Football League. But not everybody in the world plays football the same way, and not every country embraces the “American way” in global marketing, as Congressman Mike Simpson pointed out in a recent commentary about the Ex-Im Bank.
“Why would we want to put American companies at a disadvantage against their Chinese competitors? That is exactly what we have done since July 1 when the charter of the Bank expired,” he said.
Simpson says the purpose of the Ex-Im Bank is to finance and promote exports of U.S. manufactured goods and services. More than 80 percent of trade worldwide requires financing, and Ex-Im Bank isn’t even the most aggressive credit operation worldwide.
“China alone has provided its exporters with at least $670 billion in export financing over the last two years,” Simpson said. “To put that in context, the Ex-Im Bank has provided about $590 billion in financing since its inception – 81 years ago.”
If the Ex-Im Bank charter is not renewed soon, says the Idaho Association of Commerce and Industry’s Alex LaBeau and Zach Hauge in a recent commentary, “Idaho and other American companies will be forced to compete with one hand tied behand their backs.”
Simpson says that up to recently, there has been little question about the Ex-Im Bank; it has been reauthorized, without issue, for 70 years. “Since I have been in Congress, it has been brought up for reauthorization 25 times and passed with overwhelming support, including mine, each time.”
Of course, that was before the Freedom Caucus – of which fellow Idaho Congressman Raul Labrador is a member – became such a big force in Congress.
“The Ex-Im Bank is the ‘bridge to nowhere’ of corporate welfare, and is a classic example of crony capitalism,” according to a caucus statement. “The Bank has failed to comply with reform requirements. There are 31 open fraud investigations at the Bank and one indictment, with more possibly to follow.”
Labrador’s group says Ex-Im Bank supports less than 2 percent of U.S. exports “and supports mega-corporations at the expense of small businesses – literally picking winners and losers among American workers.”
Labrador isn’t alone with his opposition in Idaho’s congressional delegation. Sens. Mike Crapo and Jim Risch voted against reauthorization, leaving Simpson standing alone as a defender. Crapo’s spokesman, Lindsay Nothern, says most Idahoans “we hear from” are opposed to the Ex-Im Bank.
“Exports are a vital part of our economy and Congress should promote U.S. trade with other countries,” Crapo said in a letter to constituents. “The best way to do that is by making a more fair tax code, creating a more effective and efficient government and tearing down overseas barriers to American trade. I will work to ensure that the American taxpayer is protected and that government agencies are not the ones picking winners and losers in the competitive sphere of the global marketplace.”
Labrador and Crapo probably have good points in their criticism of the Ex-Im Bank (shock, shock, a government entity has serious flaws). But if Simpson and Sayer are right, then it’s Congress – and not the Ex-Im Bank – that ultimately chooses winners and losers in the global marketplace.
