The Ex-Im Bank Redux
Adam Smith, the first and still best of all of the world’s economists and moral philosophers, once wrote in opposition to all systems of “preference and restraint”.
That lesson is lost on most politicians and all special pleaders who support re-authorization of the taxpayer-financed Export-Import Bank, whose funding is once again set to expire at the end of June 2015. The Ex-Im Bank is a poster child for crony capitalism. The list of the major beneficiaries of its subsidies and loan guarantees is headed by Boeing, Caterpillar and other large U.S. corporations, none of which need privileged access to the common pool resources of the federal budget to sell their products overseas. The Ex-Im Bank allows foreign airlines and mining companies, among others, to buy capital equipment from U.S. manufacturers on the cheap, thereby gaining advantages over their rivals in the global marketplace, many of which, like American and Delta airlines, are headquartered in the United States. Subsidies to exporters at the expense of ordinary American taxpayers not only distort competitive market forces, but, insofar as they help Boeing and hurt U.S. commercial airlines, also are morally indefensible.
I once told Mercatus’s Veronique de Rugy in person that if fiscally responsible commentators like us cannot kill the Ex-Im Bank, we cannot kill any other profligate federal spending program that delivers special benefits to politically well-organized lobbyists, paid for by you and me.
It is past time for all Americans to stand up against all systems of preference and restraint. Although many other for opportunities for opposing Washington’s expansionism could be put on the table, the pending re authorization of the Ex-Im Bank is a good place to start.