As a candidate for President in 2008, Barack Obama wanted to eliminate the Export-Import bank, which in his words was a “fund for corporate welfare.” Now that he is President, Obama has changed his mind and the White House now brazenly characterizes Ex-Im’s work as “essential,” and “vital” in helping big business access financing.
With the Ex-Im Bank set to expire on June 30, its supporters are desperately fighting to keep it alive. After a series of scandals including allegations of bribery, the bank has become toxic and many former supporters have decided enough is enough. Curiously, President Obama has taken the opposite approach.
The President remains stubbornly committed to preserving the culture of crony capitalism that is emblematic in the nation’s capital. In recent months, the Obama Administration has gone all in to ensure the bank’s charter is renewed. Speaking at the Export-Import Bank’s Annual Conference in April 2015, National Security Advisor Susan Rice stated that it was an important tool for American competitiveness and apparently no longer corporate welfare:
“That’s why the Export-Import Bank of the United States is essential. Last year, financing from the Bank helped thousands of American entrepreneurs reach new markets and grow their small businesses. It supported 164,000 private sector American jobs . . . And, I can tell you, when President Obama meets with foreign leaders, Ex-Im is an important part of our diplomacy. So, I join the President, Members of Congress from both parties, the American Chamber of Commerce, the National Association of Manufacturers, and small business owners across the country in calling on Congress to reauthorize the Ex-Im Bank with a long-term mandate to continue its vital work.”
Recent studies have shown these arguments to be false. Ex-Im subsidizes a small fraction of exports, and the overwhelming majority of its loans benefit a few well-connected corporations. One politician who understood this was presidential candidate Obama. In stark contrast to President Obama, candidate Obama argued it was time to end this wasteful tool of crony capitalism:
“I am not a Democrat who believes that we can or should defend every government program just because it’s there . . . there are some that have been duplicated by other programs that we just need to cut back, like waste at the Economic Development Agency and the Export-Import Bank that has become little more than a fund for corporate welfare.”
So what has changed in this time? Well, since then the Ex-Im Bank has been used to finance companies with close connections to the administration like Solyndra. Just one year before Solyndra declared bankruptcy, Ex-Im granted Solyndra a loan to the tune of more than 10 million dollars to “finance the overseas sales of products.”
In fact, the Ex-Im bank is a huge part of the Democrat political machine. In a candid moment, Bill Clinton said that the audience at one of the bank’s recent conferences was “full of people who once worked for me.” Furthermore, the head of Ex-Im was a Clinton appointee and has been a prolific donor to the Clinton’s over the years. Perhaps this is why Obama supports the bank, and why Hillary Clinton wants to “put the Ex-Im Bank on steroids.”
Instead of supporting a Bank that pick winners and losers and subsidizes huge corporations, President Obama should listen closely to candidate Obama’s remarks and help eliminate this “fund for corporate welfare.”