03/15/12 Kill the Ex-Im Bank
Most people know that Fannie Mae and Freddie Mac were behind the housing meltdown. Few people have heard of the Export-Import Bank. Its kind of like Fannie and Freddie. But instead of funding bad mortgages the Ex-Im Bank funds crony capitalism.
It was started by FDR in 1934 to loan money to the Soviet Union. That worked well for us, didn’t it? Now it provides low-interest loans to foreign companies to buy U.S. goods.
It’s near its debt limit of $100 billion. Congress wants to raise it to $160 billion. $50 billion has been loaned to support one company: Boeing. Supporters say funding U.S. exports makes sense. But does it?
The money only goes to foreign companies — in this case, foreign airlines. They buy Boeing jets for less than U.S. airlines. This gives foreign airlines a competitive advantage over U.S. carriers in the global market. According to one estimate, it has cost U.S. airlines 7,500 jobs.
But why should the U.S. taxpayer be on the hook for loans that private banks can easily make? And if the loans are too risky for the free market to consider — then why should taxpayers guarantee risky loans? We’ve been there, done that.
It’s time to kill the Export-Import Bank.