America’s Export
Import Bank
From
Boeing to GE to more than 3,340 small businesses across America, the Export Import Bank has worked for more than 80 years to further support American businesses in
their ventures abroad. Originally
created in 1934 with the purpose of easing the grip of the great depression on
American exports, the EXIM Bank has grown in to one of the most successful
quasi-public entity of the United States government. In 2014 alone they helped support $27.4
billion of the US’s total $2.35 trillion export sales at no additional cost to
the taxpayers. In fact the government
saw a surplus of $675 million in net revenue on loans to both small and big businesses. However despite its great success over 81
years the EXIM Bank was forced to cease operation for the first time as of June
30th because their charter has not been reauthorized. The EXIM Bank is currently at risk of
dissolving if its charter is not renewed, such a failure in re-authorization
poses a threat not only domestically but internationally.
It
seems almost laughable that such an entity would be the target of political
strife, when it has been more successful at job creation than most
politicians. The EXIM Bank has become a
powerful tool for business transactions between US companies and risky
buyers. The EXIM Bank aids in loans and
prevents US businesses from being hurt by bad deals, one example is Boeing’s
satellite manufacturing business. The
risk exist for Boeing that in the production of an $80 million satellite that
the suspected buyer could just back out of the deal. In such a case the EXIM bank insurance policy
would prevent a total loss for Boeing, and has a default rate of near zero at 0.175%. Yet it is for the very way the bank operates
that makes it a target for those who see it as a threat to global competition
and as a cushion for big businesses. But,
such worries are completely unfounded because there has never been a market in
which a bank can be considered unfair, so long as it turns a profit. It is business and as Coolidge so eloquently
said “America’s business is business”.
It
would be poignant if such a desire to eliminate all forms of government “aid”
were to come true even when the societal benefits are greater than the cost. This should not be something that should be
cast aside because of a person’s belief, when there is empirical data to show
its use for our nation. For in our world
America’s greatest influence relies on the success of its markets and
businesses, we should not sacrifice one of the few things we excel at. To do so would be a failure in judgement as
well as a simple case of self-immolation to both our economy and a tool of
American foreign policy. For in that
world in which a person so blindly believes that elimination of such a banking
entity will lead to further growth, is a world in which classical economic
theory actually holds true. But, so long
as we aren’t in that world there is hope for the re-authorization of the EXIM
Bank and for what William T. Stead called the Americanization of the world.
---Nathaniel Dust---
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