Ex-Im Critics Are Helping Foreign Competitors Destroy The U.S. Economy

Here’s a quick public-affairs quiz.  What prominent liberal gave a speech this week saying federal assistance to exporters is “corporate welfare” that helps big business at the expense of the “Main Street economy,” and called for the U.S. to unilaterally disarm in the global competition for trade markets?  Was it (a) consumer advocate and senator Elizabeth Warren, (b) progressive legal scholar Cass Sundstein, or (c) political commentator and gay activist Andrew Sullivan?  The answer is (d) — none of the above.  The person who expressed those left-wing sentiments was House Finance Committee Chairman Jeb Hensarling, Republican of Texas.

Hensarling has joined forces with a handful of Tea Party types and academics on the fringes of the GOP to argue that the U.S. Export-Import Bank should be put out of business for the sake of ideological purity — even though it costs taxpayers nothing, even though hundreds of exporters say its loan programs are crucial to their survival, and even though many of his own constituents rely on its services.  Like the mindless liberals of the pre-Reagan era that Ex-Im critics unconsciously echo, Hensarling thinks abolishing America’s only export credit agency should be “a defining issue for our party and a defining issue for our movement.”

That’s what he told an audience at the Heritage Foundation — an organization that has become the nation’s most influential think tank by championing causes that millions of Americans care about.  You know, like tax reform, restraining the growth of the welfare state, and protecting Second Amendment rights.  Ex-Im is not one of those issues.  It’s a small agency that generates a modest profit in fees each year from loans that help U.S. exporters to sell abroad.  Five dozen other countries have similar agencies, and many of them are far more aggressive in helping exporters.  All Ex-Im really does is level the playing field for the big boys like Boeing and General Electric while helping thousands of smaller exporters to get financing they can’t obtain from the local Farmers & Merchants Bank.

Hensarling’s state is a big user of such services — although calling it “aid” would be an exaggeration, because Ex-Im loans have to be paid back with interest.  Users almost never default on their payments, but if they did Ex-Im’s reps would show up to repossess their GE locomotives.  The point is, these programs don’t cost the government a cent, but they sustain hundreds of thousands of jobs in the U.S. that otherwise would be wiped out by foreign competition.  Hensarling doesn’t seem to care.  He says we “should simply let Ex-Im expire” after 80 years of operations when it comes up for reauthorization later this year — even though exporters in China and France and Japan will still have far more extensive financing programs available from their governments on which to draw.

There was a time when being conservative automatically meant being pro-American.  That’s not where we are today.  Some right-wing ideologues sound like they want to burn down the village to save it.  Rep. Hensarling and his fellow travelers seem oblivious to the fact that when the new millennium began in 2000 U.S. exports of manufactures were three times greater than those of China, and ten years later China’s exports of manufactured goods were 50% bigger than ours.  The U.S. had a trade deficit of nearly $5 trillion in manufactured goods during the intervening period while China ran a huge surplus and its global market share kept growing and growing — to a point where it surpassed America as the world’s biggest exporter of goods.  If Rep. Hensarling has his way, China will keep growing at the expense of his constituents, and America’s influence in the world will continue receding.