The Export-Import Bank is a hoary, old financial institution with the purpose of facilitating American exports by providing financing or guaranteeing loans for cross-border transactions in which the private sector declines to participate.
There’s a hint there.
It may be that such government involvement might have done some good in the bad, old days before widespread free trade agreements. It may be, too, that tariffs were a good idea a long time ago. Or maybe not.
Free trade agreements signed since those days have facilitated lower prices, more freely moving “factors”—economist-speak for the goods that companies take in and process into goods that they then sell—and more freely moving labor.
Free trade agreements, in this way, have resulted in a broader range of goods for American consumers and American companies and have produced them at lower prices than heretofore.
The hint is this: if no one in the private sector wants a part of a deal, it’s likely to be a waste of taxpayer money for the Ex-Im Bank to get involved.
Some supporters of the function of an Ex-Im, if not of the bank itself, mention as William Galston did in a recent Wall Street Journal op-ed that
Ex-Im supported the exports of more than 3,400 small businesses that probably could not have obtained commercial financing, for reasons unrelated to the creditworthiness of the prospective borrowers or to the quality of their proposed transactions.
There is, however, nothing stopping those small businesses from forming their own private-enterprise association to support each other with such needed financing.
Galston cited other supporters who see the aircraft industry as an industry desperately needing the Ex-Im Bank [emphasis added].
[T]he manufacture and sale of commercial aircraft is far from a free market. Boeing’s major competitor—Airbus—receives massive export subsidies from a European consortium. In the best case, Europe and the US would negotiate the mutual elimination of subsidies. But until that happens, say Ex-Im’s supporters, it would be self-destructive for the US to stand down unilaterally.
These supporters, apparently, think this is another area where the US should lead from behind.
No, let the Ex-Im’s authorization expire, say I.