Marathon Pundit: George Will weighs in on the Ex-Im Bank

Monday, March 19, 2012

George Will weighs in on the Ex-Im Bank

Boeing headquarters, Chicago

In his latest column, George Will weighs in on the Export-Import bank.

From the Washington Post:

Sallie James was born in Australia on July 4, 1976, which suggests that Providence planned what happened 30 years later: She moved to Washington. She studies trade policy at the libertarian Cato Institute, and her report "Time to X Out the Ex-Im Bank" illustrates how corporate welfare metastasizes as government tries to rectify the inevitable inequities of its constantly multiplying favoritisms. And while picking American winners, the Export-Import Bank creates American losers.

The bank, whose current reauthorization expires May 31 and which two months before that might hit the $100 billion cap on its loan exposure, subsidizes myriad export transactions with guaranteed loans to make U.S. exports cheaper. Mission creep is a metabolic urge of government agencies, but there may be mission gallop at the bank as it tries to correct the collateral damage it does to some U.S. companies and as it is pushed to further politicize credit markets by mirroring the market-distorting policies of foreign governments.

The bank's Web site says that it helps "to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters." But a leveler’s work is never done.

There is a reason critics have called Ex-Im "Boeing's bank." America's biggest exporter is by far the biggest beneficiary of the bank's activities. But when the bank's interventions in financing help Boeing sell planes to China, India and other nations, it enhances the ability of those nations’ airlines to compete — often using discounted excess capacity — with U.S. international carriers.