July 9, 2014

Is The Export-Import Bank ‘Crony Capitalism?’

Sometimes people can look at the same facts and reach opposite conclusions. That seems to be the case with Export-Import Bank re-authorization.

In an effort to build support for the embattled bank, lobbyists for business groups have begun handing out index cards to members of Congress listing all the companies that benefit from Ex-Im financing in each member’s district, according to The Wall Street Journal.

Opponents of the bank have used similar lists to deride Ex-Im as a form of “crony capitalism” — that is, taxpayer-backed assistance to politically connected companies.

Advocates of the bank say it performs a vital service for American businesses by promoting trade. According to an article by former Congressional Budget Office Director Douglas Holtz-Eakin in The Huffington Post, “Ex-Im serves to level the international playing field for U.S. exporters,” by providing financing that is not available from the private sector.”

Holtz-Eakin argues, “[T]he fact that a program sends a payment to a corporation…simply cannot be prima facie evidence of crony capitalism.”

Detractors, on the other hand, point out that the vast majority of Ex-Im financing goes to large corporations such as Boeing and Caterpillar.

“Since 2012, Ex-Im made a concerted effort to broaden its reach and insulate itself from charges that it was Boeing’s Bank,” Dan Holler, communications director at Heritage Action for America, told The Daily Caller News Foundation. “As a result, various lobbyists are running around Capitol Hill talking about ‘small businesses’ instead of defending the Bank’s relationship with Boeing, GE, Caterpillar, etc.”

Holler added, “Those small businesses are serving as political cover for politicians who cannot justify corporate welfare to some of America’s largest, most successful companies.”

Congress may vote on re-authorization before the August recess.


No comments:

Post a Comment