5 Reasons Why The Ex-Im Bank Should Not Be Reauthorized

When government picks winners, taxpayers lose.

1. It is a Wasteful Bureaucracy

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Despite starting as a small agency created by one of Franklin Delano Roosevelt’s executive orders to help promote the national export in 1934, the Export-Import Bank has ballooned into a staggering, $100 billion dollar bureaucracy which serves to offer preferential treatment to foreign companies and benefit special interests connected to the elites in Washington, D.C. As if the problem was not large enough, some Democrats want to expand the Bank’s program total to $140 billion for the immediate future.

2. Corruption Permeates It

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In the past few months alone several senior officials have been suspended from their posts pending an investigation into the acceptance of gifts and favors from companies seeking to gain an advantage in the trade system. One of the more glaring examples is that of Johnny Gutierrez, an employee with the Bank’s short-term trade finance division who allegedly accepted sums of cash in exchange for helping a Florida-based company attain government financing for a trade project in Latin America. Gutierrez was taken in for questioning in April, and others remain the subject of scrutiny by federal investigators to this day.

3. It Promotes Crony Capitalism

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The Boeing Company has received a slick deal through the Bank that undermines Delta and other American airlines. Foreign companies who gained the advantage of low-rate loans offered almost exclusively to them by the Bank are turning around and purchasing widebody jets from Boeing, granting unfair advantages to a company that donated money to Barack Obama’s 2008 presidential campaign totaling over five times that donated to John McCain the same year.

4. The Unfair Market

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The Ex-Im Bank’s practice of giving low-rate loans to foreign firms also has resulted in these companies slashing their airfare prices to undercut American competitors. Adding to this is the fact that many of the beneficiaries of the Bank’s preferential treatment are also funded by the government of their origin states, creating a situation in which free enterprise is being strangled by the force of law.

5. The Private Sector Does Better

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The overarching problem of institutions like the Ex-im Bank is that they frustrate the emergence of better quality products and services by giving leverage to the connected few. If a company is committed to providing superior service to its customers, the government should respect that and allow free enterprise to reign. Throwing a bureaucratic morass into the mix stifles the ambitions of newer companies and creates an environment where poor performance is acceptable because its purveyors have the financial backing of one or more states.

As House Majority Leader-elect Kevin McCarthy said on the subject of the Bank, “One of the biggest problems with government is they go and take hard-earned money so others do things the private sector can do.”