There’s a fight brewing in Washington and it’s a fight that’s been a long time in coming. Finally, a movement is taking shape that could address a certain government agency that’s been allowed to meddle in our economy for far too long: the Export-Import Bank of the United States.
The charter for the Ex-Im Bank, as it’s commonly known, is set to expire on Sept. 30 and a growing chorus of voices is calling for the serious reforms or, barring that, allowing the bank’s charter to expire, eliminating it for good.
One of the leaders in this effort is Utah’s Sen. Mike Lee, who in a speech to the Heritage Foundation called the "cronyist" bank "another taxpayer-funded example of distorted public policy that further erodes Americans’ confidence in our markets and our system."
What is it exactly about the Ex-Im Bank that would cause it to "erode Americans’ confidence"?
Once the bank’s stated purpose is understood, its flaws come into clear focus. The bank was created in the 1930s with the same goal it has today – providing money for foreign entities to buy products made in America.
This might seem like a good idea in theory, but economic reality quickly reveals several problems. For one, these foreign companies — many of which are government owned — are perfectly capable of taking their American-made products — which they’ve bought at cut-rate prices thanks to Ex-Im financing — and use them in competition against American businesses. That doesn’t help our economy in the long run.
In addition, Ex-Im cuts most of their deals with major corporations like Boeing and GE, who are most certainly not in need of government handouts considering the tens of billions in revenue they post each year.
Perhaps most egregious is the Ex-Im Bank’s disregard for the American worker. In these tough economic times, our top priority should be growing the economy and creating jobs. But the Ex-Im Bank seems to be more focused on corporate cronyism. Though they themselves state that "creating and sustaining jobs is Ex-Im’s mission," there’s a lot questions surrounding just how many jobs the bank truly supports. In the airline industry alone, the Ex-Im Bank’s actions have resulted in the loss of thousands of jobs.
The Ex-Im Bank was cited last year by the Obama Administration’s own Government Accountability Office (GAO) for not being transparent about their methodology used to determine the number of jobs "supported."
For instance, the bank made no distinction in their reporting between full-time, part-time and seasonal jobs, counting each type equally. They also made calculations based on average industry data, not necessarily looking at their specific clients.
Finally, the GAO noted that the bank’s methodology was unable to account for "what would have happened without Ex-Im financing." So the bank assumed themselves essential when making their calculations. All of this makes the final determination of "jobs supported" by Ex-Im worthless and demonstrates yet again their math cannot be trusted.
This is exactly the sort of practice that would, in Sen. Lee’s words, "erode Americans’ confidence."
A taxpayer-funded institution engaging in corporate cronyism on the front end and cynically manipulating their economic reporting on the back end should be hard for any American — liberal or conservative — to stomach.
If the recent backlash as Sept. 30 draws near is any indication, confidence in the Ex-Im Bank is starting to erode quickly. The bank cannot be allowed to continue their "business as usual" — sweetheart deals for giant corporations and foreign-owned entities, and raw deals for American workers and taxpayers. Serious action must be taken to either fix the Ex-Im Bank or get rid of it once and for all.
Stephen DeMaura is president of Americans for Job Security.
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