There are few subjects I enjoy railing against as much as crony capitalism. Despite riding into Washington on a wave of populism, so far the administration has not made great inroads in eliminating the practice -- quite the contrary. One example involves an entity that many Americans have never heard of: the U.S. Export-Import Bank, or EXIM, for short. The president was initially opposed to it, but now supports it, according to some Democrats. Surprise, surprise: the change of heart apparently happened after a fireside chat with Boeing CEO Dennis Muilenburg. Trump could voice his support for getting the federal agency back in business at a Boeing factory in South Carolina on Friday.
The EXIM Bank, for those not familiar with it, is the U.S. government's official export credit agency. It was established during the Great Depression with the goal of "supporting American jobs by financing the export of U.S. goods and services." Here I'm quoting "The Facts" as presented on EXIM's own government website. In other words, it uses taxpayers' money to guarantee loans to foreign entities for big corporations' projects that will, in actual fact, benefit mainly the big corporations, not the taxpayer.
More "Facts": "EXIM Bank's mission is American jobs"; how noble! "EXIM Bank is more critical than ever to small businesses"; hogwash! "EXIM Bank is efficient and delivers for the American taxpayer"; says who? -- and other statements that are, in my humble opinion, equally spurious. Plenty of people both inside and outside of government, including the Congressional Budget Office, have agreed that all is not as EXIM wants us to believe, which is how the bank came to figure in the news recently.
For nearly two years, EXIM loans for more than the paltry sum of $10 million have been blocked because one senator refused to fill a seat on the bank's board, thereby preventing any substantial activity. Sen. Richard Shelby of Alabama, as head of the Senate Banking Committee, was acting on his belief that EXIM Bank was in effect corporate welfare. Like other critics, he argued that the bank picked winners and losers and was engaged in activity better left to the private sector; that a handful of companies like Boeing and GE shouldn't be allowed to risk taxpayers' money to secure contracts that, the companies claim, are the only way they can keep American jobs in America. Now Shelby has moved on, clearing the way for Trump et al. to fill the necessary seat.
Personally, what sticks in my craw most is EXIM's pious claim about being "critical to small business." The numbers are a little reminiscent of Bush's fuzzy "coalition of the willing" figures from 2003. The New York Times reported last year that although 98% of recent loan applications have been for loans under $10 million, two-thirds of total EXIM aid has gone toward bigger contracts. (I wonder what the average 737 costs these days?) Big Ass Solutions did nearly a quarter billion in sales last year, but we've never yet come close to a $10 million contract. And we would never use EXIM for smaller loans, either -- or the SBA, for that matter. Somehow, we've managed to secure contracts that have added jobs to the American workforce without government assistance, and largely without the help of private banks that want to tell you how to run your business -- I get it, already: I need to sell stuff for more than I paid for it. Thanks.
If Trump ends up backing EXIM, he won't be the first president to have had a change of heart about the bank. Before he was elected, Obama referred to it as "little more than a fund for corporate welfare." Once in office, however, he came around to the Washington way of thinking. Just last year he was pushing a Westinghouse project to build nuclear reactors in India that would require a multibillion-dollar EXIM loan.
It's amazing what "the swamp" can do to a person. It must be something in the water.