Ex-Im Bank Is Welfare for the One Percent

This month Congress will consider whether to renew the charter of the Export-Import
Bank (Ex-IM Bank). Ex-IM Bank is a New Deal-era federal program that uses taxpayer
funds to subsidize the exports of American businesses. Foreign businesses, including
state-owned corporations, also benefit from Ex-IM Bank. One country that has
benefited from $1.5 billion of Ex-IM Bank loans is Russia. Venezuela, Pakistan,
and China have also benefited from Ex-IM Bank loans.

With Ex-IM Bank’s track record of supporting countries that supposedly
represent a threat to the US, one might expect neoconservatives, hawkish liberals,
and other supporters of foreign intervention to be leading the effort to kill
Ex-IM Bank. Yet, in an act of hypocrisy remarkable even by DC standards, many
hawkish politicians, journalists, and foreign policy experts oppose ending Ex-IM
Bank.

This seeming contradiction may be explained by the fact that Ex-IM Bank’s
primary beneficiaries include some of America’s biggest and most politically
powerful corporations. Many of Ex-IM Bank’s beneficiaries are also part
of the industrial half of the military-industrial complex. These corporations
are also major funders of think tanks and publications promoting an interventionist
foreign policy.

Ex-IM Bank apologists claim that the bank primarily benefits small business.
A look at the facts tells a different story. For example, in fiscal year 2014,
70 percent of the loans guaranteed by Ex-IM Bank’s largest program went
to Caterpillar, which is hardly a small business.

Boeing, which is also no one’s idea of a small business, is the leading
recipient of Ex-IM Bank aid. In fiscal year 2014 alone, Ex-IM Bank devoted 40
percent of its budget — $8.1 billion — to projects aiding Boeing.
No wonder Ex-IM Bank is often called “Boeing’s bank.”

Taking money from working Americans, small businesses, and entrepreneurs to
subsidize the exports of large corporations is the most indefensible form of
redistribution. Yet many who criticize welfare for the poor on moral and constitutional
grounds do not raise any objections to welfare for the rich.

 

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