The Export-Import Bank is supposed to finance transactions that the private sector deems too risky but that are still worth doing. If that sounds a bit like searching for a square circle, then you won’t be surprised by the following report about what the Export-Import bank actually does. From Diane Katz:
Multinational corporations attract the largest proportion of Ex–Im financing, including the construction and engineering firm of Bechtel, ranked by Forbes as the fourth-largest privately held company by revenue, and Lockheed Martin, valued in excess of $50 billion. But the bank’s foremost beneficiary is Boeing, the world’s largest aerospace company (with a market capitalization exceeding $91 billion). In the past five years, the company has profited from 197 Ex–Im deals totaling $48 billion. Last year alone, Boeing-related financing comprised 30 percent of all Ex–Im activity.
These and the other deals with titans of industry belie claims that the bank is necessary to fill “gaps” in financing—that is, bankrolling deals that supposedly pose too much political or economic risk to garner private capital. In fact, U.S. exports hit a record-high $2.2 trillion in 2013, up from $1.4 trillion five years ago, reflecting no shortage of private export capital. […]
If the bank were stepping in where private investors fear to tread, a larger proportion of its financing would be directed to Africa and Latin America, where risks are greatest. Instead, bank authorizations last year were concentrated in Asia ($9.7 billion), followed by Europe ($5.7 billion) and North America ($3.4 billion). In contrast, Latin America has received $2.9 billion and Africa a measly $600 million. [Internal citations omitted.] [The Heritage Foundation, April 11]
Congress can end this crony capitalist enterprise when the Export Import Bank’s authorizing legislation expires in September.