by Veronique de Rugy
June 25, 2014
As we consider the reauthorization of the US Export-Import Bank (Ex-Im), we must acknowledge two fundamental realities. First, export promotion programs, like Ex-Im finance, are not critical to US exports. At most, Ex-Im can claim to influence roughly 2 percent of both the value of total US exports and the total number of export-related jobs. Second, Ex-Im has a self-refuting mission. Its charter instructs administrators to extend assistance to projects that cannot find financing in private markets; these projects must also provide a reasonable chance of repayment. However, the fact that a project cannot find private finance is strong evidence that it does not provide a reasonable chance of repayment. If the Bank is making profits, it ought to be privatized. If it is suffering losses, it ought to be shut down. Neither scenario supports federal government involvement. The Bank is an expensive hypocrisy, being carried on the backs of taxpayers for the benefit of a few. Its charter ought to be allowed to expire, and free trade allowed to flourish.