The PR Campaign for the Ex-Im Bank

Lobbyists will fight for those billions:

….Stories have begun to appear in the press about the sympathetic small businesses that would be “victims” of an Ex-Im shutdown. These stories are predictable: the media is part of the system too. But if Ex-Im Bank were to be swept away in a storm of tea-party fervor, as seems increasingly likely, the sun would rise tomorrow. America exported $2.3 trillion worth of goods last year, of which Ex-Im financed $37.4 billion—a mere 1.6%.

Yes, Boeing would be inconvenienced. Boeing is the single biggest user of Ex-Im finance. Airplane sales are negotiated sales, so the availability of subsidized finance goes directly to Boeing’s bottom line, since Boeing can charge slightly higher prices for its planes.

But Boeing will survive. Boeing is part of a duopoly, along with Airbus, with bulging order books and sizable profits. In fact, note an exquisite correlation: The cost of Ex-Im going away would be negligible in relation to Boeing’s margins and cash flows, but the benefit of Ex-Im staying around is large in relation to the lobbying dollars Boeing allocates to its preservation. Thus Boeing lobbies for its preservation.

But wouldn’t some smallish heart-tugging exporter like the widely-cited FirmGreen Inc., a maker of landfill gas systems that it ships to South America, also potentially lose sales at the margin if Ex-Im finance weren’t available? Yes, such an exporter exists—which is why no government program, once started, ever disappears, never mind that unneedy Boeing actually is its primary beneficiary….

Via Holman Jenkins: What’s an Alternative to Crony Capitalism? @ WSJ.

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