Skip to main content
Advertising

Originally published Saturday, June 28, 2014 at 8:00 PM

  • Share:
           
  • Comments (0)
  • Print

Export-Import Bank succeeds

The Ex-Im Bank helps finance about 2 percent of U.S. exports, including Boeing jets.


Special to The Seattle Times

Reader Comments
Hide / Show comments
Good lord, another liberal who has never read Ayn Rand. MORE
Where to start with all the false assumptions and misconceptions Talton loads into just one op-ed. The whole piece is... MORE
Well said Mr. Talton! MORE

advertising

Anyone who thinks that House Republicans are copping an attitude against the Export-Import Bank (Ex-Im) and cooler heads will prevail should take stock.

This was the same bunch that was willing to default on American debt and bring on a worldwide depression, all in the name of an extremist ideology that has come to control one of our two great political parties.

The GOP has moved even further right with the primary defeat of Majority Leader Rep. Eric Cantor, an Ex-Im supporter but hardly a liberal or even a centrist. Now dogma, ignorance of history and fantasy are in control. This is now a party that would not allow Ronald Reagan to win a school-board primary.

The fantasy is that an Ayn Rand “free market” of heroic capitalists will succeed if only government gets out of the way of the hidden hand.

The real world doesn’t work this way and never has.

Alexander Hamilton’s dream of a great republic of commerce depended on a big role for government, especially with tariffs to protect manufacturing. Transcontinental railroads were built with heavy government support. Then they were nearly killed when government took to subsidizing interstate highways and airlines.

The real Ayn Rand world is on display in places such as Somalia. The United States is a mixed economy, with the private sector and government intertwined in myriad and delicate ways. Undo one thing thoughtlessly, and the consequences can be severe. We see this with the poisonous industry concentration brought on when Washington stopped enforcing antitrust laws.

The Ex-Im Bank was established in 1934 by Franklin Roosevelt and helps finance about 2 percent of U.S. exports. This is an important 2 percent, representing deals that couldn’t otherwise find financing in a timely manner.

Specifically, the bank makes and guarantees loans to foreign buyers of U.S. products. In fiscal 2012, it backed $50 billion in American exports, supporting 255,000 jobs. The default rate is low. And while the “Bank of Boeing” is important to some big players — Caterpillar and GE, too — it also provided financing for 3,400 American companies of all sizes.

At least 59 other government credit agencies exist around the world to help those nations’ exports, so Ex-Im is hardly unique. Indeed, it is an essential backstop for American exports — and jobs in the state of Washington.

Nor is it the drain on taxpayers that critics claim. The bank says it earned $1 billion in fees in 2013. According to the accounting rules set by Congress, Ex-Im would save the government $14 billion over 10 years.

To be fair, the Congressional Budget Office reports that applying “fair value accounting” would mean the bank would cost $2 billion. Whether it is useful to look at it this way is a source of argument among experts.

Also, the bank recently suspended or removed four officials over allegations of accepting gifts and kickbacks, as well as steering contracts to favored companies.

Indeed, America does suffer from a toxic “crony capitalism,” as Dave Brat, who defeated Cantor, complained.

Example No. 1 is deregulated Wall Street and the Too Big to Fail Banks. Then there’s the tens of billions of subsidies for fossil-fuel companies, the future of the planet be damned. Don’t forget $256 billion in farm subsidies in 2013, much of it going to Big Ag and fat-cat farmers. And the Military Industrial Complex.

And Delta Air Lines complaining about Boeing and Ex-Im. That’s rich considering how Delta grew huge, thanks to the federal antitrust nap and a federal bailout after 9/11.

Citizens United has also given big business and the richest Americans unprecedented and undemocratic power in our politics.

So the delicate checks and balances that created the most powerful economy in the world and the greatest middle class have indeed been knocked askew. Often it has been done by the same ideologues that now want the scalp of the Export-Import Bank.

Author Thomas Frank aptly calls them the Wrecking Crew. It would be a shame if they took their sledgehammers to one of the nation’s important success stories.

You may reach Jon Talton at jtalton@seattletimes.com



Want unlimited access to seattletimes.com? Subscribe now!

Also in Business & Technology

News where, when and how you want it

Email Icon

Want free career advice? And an iPad Mini?

Want free career advice? And an iPad Mini?

Tell us about your goals and challenges and be considered for a future NWjobs career-makeover story, as well as a chance to win an iPad Mini!

Advertising

About Jon Talton

Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest
jtalton@seattletimes.com

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►