Posted by Anita Folsom
The Ex-Im Bank (Export Import Bank) is in the news these days. But what is it?
“Created in 1934, the Export-Import Bank was a product of [Franklin] Roosevelt’s New Deal. FDR initially wanted the Ex-Im Bank as a foreign policy tool to make easy credit available to nations he liked…. The Ex-Im Bank often expected to lose money because it was making risky loans, or giving subsidies, to favored countries or favored American corporations. The Ex-Im could lose money regularly and get replenished in annual appropriations” from the federal government. (Uncle Sam Can’t Count, Chapter 7)
That spending pattern has continued to this day, and the Ex-Im Bank comes up for renewal in a few weeks. But many Americans are waking up to the waste and political corruption caused by such a government entity.
In yesterday’s Wall Street Journal, former Texas Governor Rick Perry announced “Why I’m Changing My Mind and Opposing the Ex-Im Bank.” First of all, on April 13 an Ex-Im loan officer, Johnny Gutierrez, pleaded guilty to accepting bribes on nineteen separate occasions from clients of the bank. And that doesn’t include the 31 corruption and fraud investigations still pending in regard to mismanagement at the Ex-Im.
Perry admits that during his tenure as governor, he liked the fact that 1200 Texas businesses received help from the Ex-Im Bank in funding more than $24 billion in exports. The economy of Texas was thriving and job creation was Perry’s number one priority.
Now Perry is pointing to the sluggish national economy, and he realizes that bank loans from the government don’t fuel a robust economy. No one can overtax segments of the population to create prosperity in another segment without damaging the people’s ability to invest and create new jobs. Here is Perry’s three-point plan to revitalize the American free market system:
(1) Simplify the tax code and reduce corporate taxes. The corporate tax rate in the U.S. is among the highest for industrialized nations. Start-up companies face an avalanche of regulations just to open their doors.
(2) Reduce the federal debt by reducing spending, and no new tax increases.
(3) The U.S. needs a regulatory system that is stable. Regulations under Obamacare, the EPA, and the IRS have grown by the thousands under the Obama administration. If regulations change rapidly or constantly increase, businesses tend to locate in other countries, avoiding the U.S.
From 2008 until 2011, more American businesses closed their doors than opened them. This dismal statistic serves as a wake-call to all Americans, including Rick Perry. The Ex-Im Bank under both Democratic and Republican presidents has been a ready-made candy jar from which to dollop handfuls of cash – in the millions – to political allies. That is what the Ex-Im Bank was set up to be, that’s what it has been for years, and that’s what it is today. It is time to abolish the Ex-Im Bank.