Photo from The Hill.com
Earlier this year, the charter of one of the most controversial tools in the big business sales arsenal died. Popularly known as the Ex-Im Bank, the Export Import Bank of the United States was a New Deal Era concept where the BUYERS of large ticket items from American companies were able to apply for credit and loans from the U.S. Treasury, and then paid the loans back to American taxpayers with interest.
Over the years, the Ex-Im Bank has helped foreign buyers of heavy equipment, big ticket items AND customers of smaller firms be able to get credit in order to be able to afford things like airplanes, earthmovers, and energy related equipment. Of late, the number of American firms able to make sales via Ex-Im Bank loans and credit extensions has been, shall we say, limited, and as a result, along with a poor understanding of how the institution operated, in addition to not completely true or unfair charges of “corporate welfare” and “crony capitalism,” have poisoned the well of popular opinion among the small business minded.
This week, the House of Representatives revisits the Ex-Im Bank with eyes on maybe resuscitating the charter. In its purest form – a sort of lending institution to foreign buyers with less than perfect credit where profit for the taxpayers is made – the IDEA isn’t so horrid. However, the PRACTICE of the Ex-Im Bank in the years before its demise completely lent credence to the detractors. Very few firms’ customers were able to get loans from Ex-Im, and the American company with the largest number of buyers to get credit of late was Boeing. (So, they’re selling passenger jets in competition with France’s Airbus.) Boeing also happens to be a large donor to the Hillary Clinton entities. There are other companies involved (G.E., maker of jet engines, is one of them), but Boeing is a pretty recognizable American enterprise, and the poster child for all that was wrong with Ex-Im.
In that respect – the fact that large scale donors to politicians were benefiting via loans to their customers – the charges of cronyism, and corporate welfare have some validity even if the actual profit on the loan itself goes into the U.S. Treasury. With the Ex-Im Bank no longer operating, though, some firms looking to develop foreign customers have had to move some operations overseas according to some labor unions and at least the U.S. Chamber of Commerce who are normally not on the same side. Thus, the arguments from all directions are exacerbated.
Anyone else seeing a vicious circle here?
For opponents of the Ex-Im Bank, the congressional maneuvering that is forcing a vote to bring the creature back to life, frankensteined or not, is unfair, a waste of time, and resulting from too many people wanting large government. (Plus, they thought they had taken care of that, and the establishment GOP is just not accepting its licking.) Proponents are pushing the number of jobs to be maintained and the revenue for taxpayers via the loans, even if there are those that argue the entire arrangement costs taxpayers. Both arguments have some merit.
So, where to go in the argument of euphemisms? Some plain speaking without the idea of corporate welfare being part of it would be a nice start, since the taxpayers see a profit and a form of loss in the end from both sides. (Loss would be the competition from foreign firms once they have acquired new assets.) Perhaps the answer is in icing the whole exercise for a bit and working out a different arrangement where the larger firms who “don’t need” their customers getting loans that they couldn’t get at home are excluded. Discussion on adjusting the corporate tax rate might be a good idea. There’s plenty of things to talk about on this, on that the critics from the Heritage Foundation and other conservative groups are correct.
Until such time, though, that the sniping back and forth on the Ex-Im Bank dies down, and the people take a step back from the euphemistic rhetoric to THINK about what will happen one way or another without the loans to foreign customers, any rational discussion on the Ex-Im Bank just is not going to happen. Pity. This is such a small part of both the federal budget and global commerce, it would have been a nice place to let the controversy die.