A hot topic of debate in Congress right now is the Export-Import Bank. The Ex-Im is an export credit agency, or an institution that serves as a go-between between governments and businesses that engage in exporting products. Set to expire at the end of June, many are fighting for the bank to continue its mission to “fill in the gap” when American companies can’t get private financing. In reality, however, Ex-Im serves a little more than corporate welfare for a few well-connected companies.
What Ex-Im does is essentially to subsidize a few massive corporations and do very little for small businesses and the average American. Of the $20.5 billion in loans, insurance, subsidies, and other funds authorized in 2014, a whopping 40% went to Boeing. They have also given hundreds of millions of dollars to the Ex-Im Bank of China and the Industrial and Commercial Bank of China, as well as to a Chinese semiconductor manufacturer that competes with US companies.
It seems that the only people not receiving help from Ex-Im are ordinary US businesses. According to data from 2014, 49 states conducted upwards of 90% of their trade without Ex-Im support. Washington State, the one exception, had close to 18% of its exports backed by the bank because the state is home to Boeing. After South Carolina (6.73%) and DC (6.2%), no state’s Ex-Im backing exceeded 2.5% of exports.
So why are there so many ardent supporters of the the Export-Import Bank? It has received strong support from prominent figures in the Democratic Party, such as Hillary Clinton and Elizabeth Warren, and major unions. All have endorsed the bank as vital to protecting American jobs. In the case of Mrs. Clinton, it seems her interest is not in American jobs but in corporate donations.
In 2014 Ex-Im’s largest recipient, Boeing, contributed $5 million to the Clinton Foundation. The second largest foreign recipient, Emirates Air, also donated as much as $5 million. It appears as though supporting Ex-Im is not good for American businesses so much as it is for the Clinton business. The real winners here are clear, and they’re not the American people.