While Americans turn their attention toward the upcoming election and the daily onslaught of poll numbers, advertisements and candidate gaffes, the federal government – with the full faith and credit of the United States – continues to dole out and guarantee billions and billions of dollars in loans to foreign companies seeking to do business with American ones.
This is the result of the Export-Import Bank, a largely unaccountable, independent organization, which is charged with dispersing $140 billion. Its actions bring a whole new meaning to the process of picking winners and losers in the marketplace, a practice that entails selecting politically-favored projects – such as so-called green energy programs – without the proper risk assessments, government oversight or public scrutiny. Free markets don’t stand a chance against such a behemoth of crony corporate welfare that operates with the support of the current administration.
Everyone’s heard the story of Solyndra, the now defunct solar panel manufacturer that received more than $500 million from the government. President Obama touted it as the “green” answer to our unemployment problem. Yet few have heard that the Ex-Im Bank provided $10.3 million in guaranteed loans to Solyndra. Another example hails from North Las Vegas where Amonix, a solar plant, which also went bankrupt received millions in guaranteed loans from the Ex-Im Bank. And yet another example is presented in Abound Solar, a Colorado solar panel manufacturer, which also went belly up recently after receiving a $9.2 million dollar loan from the Ex-Im Bank.
These examples illustrate a point that capitalists have been making for some time, which is the top-down government approach currently employed by the Ex-Im Bank leads to market inefficiencies and is ultimately bad for our economy. Further, this kind of government-led economic financing can actively diminish U.S. competitiveness in the global market and at its very worst, damage American firms risking jobs here at home.
New Hampshire has not escaped the fray when it comes to the risky business of Ex-Im’s gambling ventures with taxpayer dollars. A Westinghouse plant in Newington is manufacturing parts for the $2 billion construction of “first nuclear power plant in a Persian Gulf nation, the United Arab Emirates.”
Who’s backing the loan? None other than Ex-Im Bank; all for the sake of creating an energy plant overseas, rather than at home during a time when tapping America’s energy resources would boon both a flagging economy and our national security.
In fact, last year saw the Bank dole out $18 million for financing exports in New Hampshire alone. The repeated failures of such government investments are clear proof of the danger to New Hampshire jobs, and small businesses, left off the government gravy train.
Luckily, some Members of Congress decided to take action. Last spring, during a hearing in the U.S. House of Representatives over the re-authorization of the Bank’s charter, Congressional Republicans teamed up to demand reforms from the wayward agency. After a drawn out battle, the new re-authorization bill named theExport-Import Bank Reauthorization Act of 2012 (H.R. 2072) demanded more transparency and accountability.
The bill even went so far as to establish a provision which empowers the Treasury Secretary to start winding down the Ex-Im Bank’s program in its entirety. But the truth is, more work remains. While there are multiple provisions within the new law to curtail the Bank’s activities, lawmakers and government bureaucrats must carry it out.
Currently, the political season is in high gear, but soon it will ramp down and we will be back to a place where there is regular order and a president with a new law in place that allows him to place a check on a federal agency whose actions in multiple sectors, can been immensely damaging to employees and employers. The question is whether the president will act.
Let’s hope whomever is the in the White House has the good sense in 2013 and beyond to understand that it is the free markets, not government-sponsored corporate welfare, that built the biggest and most successful companies in America. If we are serious about creating more jobs in the U.S., we will ensure the government is exercising the authority it has been given by the Congress and put an end to government subsidies that expose taxpayers and kill American jobs.