The authority for the Export-Import Bank expired on July 1and has not been renewed. This is an event to be applauded by every American taxpayerand to my memory is the first government program of substantial size to be ended in more than 60 years.
This view is part of an entire fabric of thought that our government has become too large, too intrusive, too expensive and too out of control. With each new program comes a new agency, a new budget, a new set of untouchable bureaucrats, a new collection of advocate-beneficiaries and a new layer of dependency, and most particularly, a new collection of politicians using the program as a protective layer against being voted out of office.
The Ex-Im Bank’s website — which is still in operation — says: “Small business exporters need certainty and protection to tackle new markets, expand and create jobs.”
This sounds good.
Unfortunately, the reality is that, in order to do this, the Ex-Im — that is, the government — has to decide who gets to win and who gets to lose. This is the underlying principle of “government help.” It is the massive weight of the government’s thumb on the scales of free-market competition. Our small businesses have consistently shown that, given the freedom to operate, they can compete with anyone in the world. They don’t need the government, except to remove the obstacles that foreign governments put in the way.
Another quote from the Ex-Im website: “With nearly 60 other export credit agencies around the world trying to win jobs for their own countries, EXIM Bank helps level the playing field for American businesses.”
This is the proponents’ version of “if the other guys are doing it then we should do it, too.” This is a lose-lose game for free markets. Other governments exist on bribery, which we have made illegal. We should make credit assistance by governments illegal as well. We should instead examine ways in which to remove the undue influence of the “other export credit agencies.” It is absolutely against free competitive market principles for a government, any government, to insert itself into commercial transactions between private companies as long as those transactions comply with all laws.
A third quote from the Ex-Im’s website: “Over the past two decades, the Bank has generated nearly $7 billion more than the cost of its operations.”
If this is true, then why does it need government funding? Better yet, why isn’t it a private function? If the benefits to the client companies are that great, and the returns from this kind of lending are that good, why is the government involved at all?
My opposition is not based on dislike of any corporation or type of transaction. It is based on principle. We either have principles or we don’t. They should not be selective by company or product.
This same logic applies to many government programs, among them:
- Fannie and Freddie manipulating the mortgage market.
- Use of the tax code to grant tax preferences to select groups and companies.
- Funding of "favored" industries such as wind and solar.
- Tax and government grant and contract preferences based on gender or race.
- Misuse of the EPA's authority to implement policies that have little to do with the environment.
Thomas Jefferson once said. “A government big enough to give you everything you want is big enough to take away everything you have.” In order for the government to give something, it must take something from someone else. We will all be much better off by limiting what the government can take.
Our founders were wise enough to severely limit what the federal government should be involved in. In the last 100 years, our political “leadership” has consistently and detrimentally found ways to subvert these limits. Let’s all hope that the expiration of the Ex-Im bank’s lending authority is the beginning of a reversal of that trend.
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