What is in this article?:
- A Vote Against the Ex-Im Bank is a Vote Against US Manufacturers
- Does Ex-Im Bank Create Jobs?
As the official export credit agency of the United States, Ex-Im provides financing and insurance for export transactions that might not otherwise occur, because private commercial lenders are unable or unwilling to provide financing to foreign purchasers of U.S. exports.
President, Information Technology & Innovation Foundation
Recently I was asked to make a presentation to a manufacturing association’s annual meeting on the topic of U.S. competitiveness and competitiveness policy. When I got to the policy part of my talk I mentioned that it’s important that we take the good ideas from both parties—Republicans and Democrats—as they relate to manufacturing competitiveness policy.
One CEO piped up and said, “There are no good ideas from the Democrats,” and most in the room laughed in approval. This implied that all good ideas from Washington related to helping manufacturers are coming from Republicans. Like the opposition from some Republicans, especially in the Tea Party, to reauthorizing the U.S. Export-Import Bank (Ex-Im Bank).
For these folks, helping companies, particularly manufacturers, export their products around the world constitutes inappropriate intrusion into the free market and an example of “crony capitalism.” As Ezra Klein writes, “a necessary predicate of reform conservatism is for conservatives to get comfortable fighting big businesses that partner with the state.”
Unfortunately, the painting of Ex-Im as corporate welfare ignores the tremendous value the agency provides to our economy. As the official export credit agency of the United States, Ex-Im provides financing and insurance for export transactions that might not otherwise occur, because private commercial lenders are unable or unwilling to provide financing to foreign purchasers of U.S. exports.
The bank provides this support at no cost to the U.S. Treasury, and in fact the Bank earned $2 billion more than the cost of its operations over the past five years, money it has returned to the Treasury to help reduce the federal deficit.
Moreover, Ex-Im plays a key role in leveling the playing field for U.S. exporters by matching credit support that other nations provide, ensuring that U.S. businesses are able to compete based upon the price and performance features of their products. The bank is thus a key institution supporting the competitiveness of U.S. manufacturers. For example, since 2009, the Bank has supported 1.2 million private-sector U.S. jobs, including 205,000 jobs in 2013 alone.
Nevertheless, just as right-wing populists have invoked the term “industrial policy” to foreclose any debate on policies that might support the competitiveness of U.S. industry, so opponents of the Ex-Im Bank seek to artificially cut off all intelligent debate regarding the important and needed role of export credit to support U.S. manufacturing exports by dismissing Ex-Im’s role as mere “crony capitalism.”
But their definition of what constitutes “crony capitalism” is effectively any proactive public policy that would assist U.S. enterprises in global competition. By their terms, it would be “crony capitalism” to expand the R&D tax credit or to support community college training programs focused on manufacturing skills; after all, aren’t these just another “hand out” to businesses?