Rep. Paul Ryan (R-Wisc.), chairman of the U.S. House Ways and Means Committee and the Republican Party’s most recent nominee for Vice President of the United States, recently had occasion to explain to reporters why he opposed extending the charter of the Export-Import (Ex-Im) Bank of the United States. Among his well-reasoned comments, two words stuck out which encapsulate much of the anti-Ex-Im argument all by themselves, “We’re America.”
That one phrase boils down one of the most important reasons why Ex-Im should be allowed to expire after managing to hang on for more than 80 years. The engine of America’s prosperity does not run on handouts or government subsidies, on corporate welfare or government favoritism. Our country was built on the belief that a free people deserve a free market. Companies should enjoy success when they earn it themselves, not when they’re reliant on government handouts. Big Business has, unfortunately, come to enjoy a culture of cronyism in their relations with government – and the Ex-Im Bank is part of that. As Paul Ryan put it, “I see it as crony capitalism.”
Chairman Ryan, who has supported the Bank’s demise in the past, is part of a growing wall of opposition to Ex-Im, which includes national nonprofit organizations like Freedom Partners and the Club for Growth. This coalition of conservatives sees Ex-Im for what it truly is: a way for the federal government to give handouts to certain companies and industries under the guise of helping small businesses, a claim that is misguided and insulting to the American taxpayer.
Ryan’s colleague, House Financial Services Committee Chairman Jeb Hensarling (R-Texas), has noted that the bank gave more than 60 percent of its funding to a handful of “mega corporations” in 2013. More specifically, 30 percent of all taxpayer-backed authorizations given away by Ex-Im that year went to Boeing, a company that by their own admission saw then-record revenues in 2013. A logical person might think such a banner year would necessitate less government assistance going forward, but logic has no place in Ex-Im’s crony-capitalist mentality. In 2014, the share of their funding given to Boeingincreased to 40 percent – even as Boeing’s revenues shattered the previous year’s record.
Ex-Im’s handouts to Boeing not only help a rich company get richer, but can even put hardworking Americans out of a job. When the bank provides subsidies to help Boeing’s clients abroad, foreign airlines are given the opportunity to purchase wide-body jets on more favorable terms than domestic carriers. The additional cost means that U.S.-based airlines must cut expenses elsewhere to remain competitive, which can even include laying off employees. According to the Air Line Pilots Association, Ex-Im’s meddling in aircraft financing has led to the loss of thousands of jobs in the American airline industry.
Ex-Im is helping subsidize foreign companies which are often wholly- or partly-owned by national governments and are directly competing with American businesses. The U.S. government should not be playing a role in picking winners and losers, especially when the only winners make their profits overseas. By helping foreign companies at the expense of those that work to create jobs right here at home, Ex-Im is acting in a way that does not advance our national interests.
Chairman Ryan knows that we as a country are better than this. “The argument that other countries do it is an argument that just does not fly with me,” he says. Major corporations relying on a constant flow of money from the government is contrary to our foundational values. When taxpayer-backed funding goes to companies that measure their profits in the billions, it’s not just crony capitalism – it’s also a perversion of the free market.
America is unique because we have achieved success through individual hard work and sweat equity. But as our government has grown, corporations have lined up to get theirs, and those who can afford big-ticket lobbyists end up benefitting the most. It is precisely these who are fighting to keep the Ex-Im Bank afloat. Shutting it down and thwarting their efforts would be a meaningful rejection of government intervention in the market and our lives.