Ex-Im Bank: Heritage Action Ignores Facts, Hurts America

How do you know when a political movement has lost its way?  One clue is it ignores facts that don’t fit its biases.  Another is that it substitutes abstract ideas for common sense.  A third is that it betrays the principles that made its existence possible.

Heritage Action, a right-wing lobbying outfit, did all three things this week in an attack on one of the federal government’s most effective agencies, and in the process ended up sounding like a collection of doctrinaire Marxists rather than patriots.  The agency it assailed is the Export-Import Bank, which for 80 years has existed solely to help companies export goods made in America.  Every major trading nation in the world has an export credit agency similar to Ex-Im, but Heritage Action thinks America should unilaterally disarm in the face of market-distorting practices by countries like China and France.

What sort of tortured logic brought Heritage Action to such an untenable conclusion?  Well for starters, it doesn’t seem to know the facts.  It says Ex-Im is a “model of special interest-fueled cronyism” that gives “upwards of 80-percent” of its funding to airplane-maker Boeing.  In reality, most of Ex-Im’s support for manufactured exports last year went to items other than aircraft.  It also complains about Ex-Im’s “backing of the failed solar panel company, Solyndra.”  Ex-Im never gave money to Solyndra.  All it did was loan money to a Belgian bank so imports of U.S. solar panels could be financed; the money has been paid back with interest.  Here are a few other facts Heritage Action has omitted from its “analysis”:

1.  Ex-Im uses no taxpayer money.

2.  Ex-Im turns a profit each year (about a billion dollars in 2013).

3.  Ex-Im is prohibited from competing with private-sector lenders.

4.  About 90% of Ex-Im’s export transactions last year were for small businesses.

Aside from Heritage Action’s very selective use of facts, it doesn’t seem to have much grasp of the role Washington has played in making America the world’s leading industrial economy.  Captains of industry in every American epoch have looked to the nation’s capital for support, and when it was not forthcoming — as in the case of shipbuilding in recent times — other countries tended to dominate the market.  Without what Heritage Action calls cronyism, the Transcontinental Railroad would not have been built.  But companies like Caterpillar and General Electric that rely on Ex-Im Bank today aren’t looking for a handout — they just want Washington to level the playing field so they are not at a disadvantage in competing with companies from other countries.

As for Boeing, the designated “bad guy” in Heritage Action’s diatribe, America’s last surviving producer of jetliners is locked in a battle for survival with European competitor Airbus.  The World Trade Organization has ruled that every plane Airbus sells was illegally subsidized.  In fact, Airbus probably would not exist at all without a continuous infusion of prohibited “launch aid” from foreign governments.  Boeing gets no subsidies from Washington.  The companies and countries that use Ex-Im credit to buy its planes have to pay the money back with interest.

So what does Heritage Action propose to do about this?  It wants to eliminate Ex-Im’s role as a leveler of the playing field, leaving the quasi-socialist Airbus with four European credit agencies to tap and Boeing with none.  It doesn’t take a genius to figure out what this would mean over the long run for America’s competitiveness in the jetliner business — one of the few manufacturing categories where the U.S. still has a positive trade balance.  Thousands of workers would lose jobs, Boeing’s market share would gradually drift downward, and eventually Airbus would dominate the business.

Heritage Action needs to find its way back to the real world on the subject of export credit. No other country will follow America’s lead if we unilaterally disarm, they will simply take advantage of us.  The only beneficiaries of Heritage Action’s approach will be foreigners, whose governments take a more practical approach to the marketplace.  This doesn’t sound like a winning theme for conservatives in the November elections.