Monday’s radio show will feature a debate on the Export-Import Bank and whether the Congress ought to “reauthorize” it — which means keep the 81-year-old agency alive and assisting America’s exporters in a variety of ways to sell their products overseas. This usually means a loan guarantee. A private bank loans the money to make […]
Ex-Im Bank: American soft power at its best
Monday’s radio show will feature a debate on the Export-Import Bank and whether the Congress ought to “reauthorize” it — which means keep the 81-year-old agency alive and assisting America’s exporters in a variety of ways to sell their products overseas.
This usually means a loan guarantee. A private bank loans the money to make the export happen, backed up by a federal guarantee in case the transaction hits the rocks. In the past eight years alone the “Ex-Im” has helped 8,886 American companies sell their goods and services abroad, creating by conservative estimates 165,000 good manufacturing jobs.
Some of Ex-Im’s biggest customers are big companies like Boeing and GE. Poor countries want to buy their airplanes and giant turbines, but banks often won’t lend to them without an Ex-Im guarantee.
Most of the bank’s beneficiaries, however — not counting the people served in the Third World — are much, much smaller American companies. Chicago’s Howe Corp., for example, employs 40 people to make ice machines that you will see in American stores keeping fish fresh, for example. Those machines are wanted around the world, but it might seem risky to Howe’s bank to financing their shipping to remote places in Africa. This is where Ex-Im steps in with a loan guarantee. Happy company, happy employees, happy customers abroad, happy shoppers abroad, happy fishermen abroad, whose product now becomes more reliably marketable.
Howe now sells its machines in 100 countries. American technology is thus making fresh food available through local entrepreneurs because an agency of the federal government guaranteed a private bank loan. A strong, export-centric federal government doing what it should be doing: strengthening America’s place in the world order using a marvelously quiet and effective bit of “soft power.”
Many conservatives want to kill the bank and make it a pelt on the wall of the new Congress to point to, an easy-to-use talking point for campaign 2016. But here’s the kicker: The moment we stop supporting our exporters in the sale of their ice chip machines or turbines, that very moment arrives China’s or Russia’s version of Ex-Im (and yes, most definitely both our near-peer competitors have them and use them to advance their counties’ manufacturing base) supporting the Russian or Chinese version of the ice-flake machine.
There is no “playing field” that needs leveling here as some conservative critics say. There is only the endless competition of geopolitics, and of a particularly rough and tumble sort.
It is simply nuts to quit the field and leave the export-support business to the PRC and Putin (and France, when it comes to airplanes, and all sorts of other countries when it comes to various other industries). Global powers have to play by global rules, not those that “The Austrian School” would prefer the world to adopt. No one is applauding the efforts of self-identified “anti-crony capitalist” conservatives to do away with Ex-Im more than the Central Committee of the PRC and the Putin gang. Another step back from the world is exactly what these countries would love for America to take.
So I have two friends and colleagues coming into the studio to duke it out Monday. Tim Carney is a senior columnist for this newspaper and a one-time editor of my books when he worked at Regnery. Dan Renberg is one of my law partners and a one-time board member of the Export-Import Bank, though he is no longer on the Board. Carney-Renberg isn’t Mayweather-Pacquiao by any means, and since I’m pro Ex-Im, Carneyites will complain my finger is on the scale. But there are buttons to push and producers in my ear that need ignoring, so I can’t actually be in the debate.
I write this column before the debate is held to put this as bluntly as we can. This isn’t Solyndra. This isn’t picking winners and losers. It isn’t “the Stimulus.” This is about America’s role as a leader in the world and whether we are going to simply shut down international outreach efforts, export support mechanisms, Third World aid programs, etc.
Some small-government conservatives want all of that, and they will end up with a small country if they succeed.
This column was originally posted on WashingtonExaminer.com