Democratic presidential candidate Bernie Sanders is one of a kind. He is the only self-proclaimed socialist in Congress, and he is also the only Democratic candidate in the presidential race to oppose crony programs such as the Export-Import Bank of the United States. Hillary Clinton, a big supporter of the bank, and Sanders clashed quite vigorously on the issue during the recent presidential debate in Flint, Michigan.
The Ex-Im Bank didn’t exist to help small businesses — at least not in recent years. Over three-fourths of Ex-Im’s financial assistance went to just ten massive corporations, the top three recipients of which were Boeing, General Electric and Caterpillar. According to a study done by Veronique de Rugy of George Mason’s Mercatus Center, Ex-Im provided support for less than one percent — 0.28 percent, to be exact — of small businesses. Furthermore, in past years Ex-Im has been found doctoring their stats and mischaracterizing businesses with as many as 1,500 employees as a “small business.” Aside from manipulating data, Ex-Im has been plagued with scandal and corruption — with 31 open fraud investigations on bank employees.
From a letter to Forbes:
So I’ve a question: why does Ex-Im need government reauthorization? If it receives no money from taxpayers – indeed, if it turns such a profit that it “gives them money” – surely private investors will eagerly seize the opportunity to serve the profitable markets that Ex-Im has abandoned.
Mr. Brinkley answers that markets served by Ex-Im are too risky for private banks. But this answer makes no sense if Mr. Brinkley is correct in asserting that Ex-Im receives no money from taxpayers. Loan portfolios that are so risky that they require taxpayer backing are by their nature loan portfolios that over time are not profitable; they are loan portfolios that do not repay lenders adequate returns on their loans. The very need for taxpayer backing of such loans implies that taxpayers are destined to cover losses on, rather than to reap profits from, these loans.
In short, Mr. Brinkley’s case for reauthorizing Ex-Im is a hopelessly illogical muddle, for it asserts that Ex-Im is simultaneously profitable and unprofitable. A government agency that must be defended by such twisted thinking is surely one that ought to be shuttered permanently.
“In fact, little of Ex-Im’s money goes to small businesses. In 2013, 93 percent of the loan guarantees benefited five companies. Boeing was the beneficiary of about 20 percent of all commitments. Ex-Im has given hundreds of millions of dollars in loan guarantees to state-owned Russian bank Vnesheconombank (VEB). VEB finances Russian arms exporter Rosoboronexport…
Most Dems and a good number of particularly corporate inclined Republicans in the Senate and the House would like to see the bank resurrected. Ex-Im means big bucks to some very large companies. As such the lobbyists have descended on Capitol Hill en masse.