Crony capitalism hurts young people. Politicians pass legislation that supports large, well-connected corporations while young Americans are left to foot the bills. For decades, crony capitalism has been embodied by a federal agency known as the Export-Import (Ex-Im) Bank, which takes money from young taxpayers and gives it to big corporations. Young people simply cannot afford this. But there’s hope. This fall, the Bank is set to expire, and it’s time our lawmakers took our side by allowing the Bank do just that.
The Ex-Im Bank provides taxpayer-backed loans and loan guarantees to global corporations. Originally created in 1934 during the Great Depression, the Bank was intended to help get the nation’s manufacturing industry on its feet. But now, 80 years later, there’s no justification for the Bank.
Supporters of Ex-Im claim that companies, like the behemoth manufacturer Boeing or energy giant General Electric, need taxpayer subsidies to export their products and make a profit. The truth is that these companies don’t need any help. Over 98 percent of all U.S. exports come from companies doing just fine without taxpayer-backed funding from the Ex-Im Bank. Big corporations have friends in high places, while young people are left to make due with no help from anyone.
Young people should be worried about the Ex-Im Bank. Every dollar the Bank guarantees to these corporations is backed by the “full faith and credit of the United States.” If any company misses a payment, we are responsible. 15.2 percent of young people are unemployed. Collectively, Americans owe $1 trillion in student loans. To think on top of all of that we’d be responsible for the defaults of huge corporations?
It gets worse — we are already paying for the Ex-Im Bank. The Congressional Budget Office has reported that the Bank is actually operating at a deficit and will cost taxpayers more than $2 billion over the next ten years. My generation is already paying high taxes during our leanest years, and we’re unable to find stable jobs, buy homes, and start families. Forcing another government expense on us is bad policy now and for our future.
Ex-Im officials think they can dupe us into supporting the Ex-Im Bank by touting the Bank’s dedication to small businesses. Sure, the initial charter of the Bank was to reinforce small businesses during lean times; but this is no longer the case. In reality, small businesses do not receive Ex-Im loans — last year, 66 percent of all loans went to Boeing’s overseas customers. Furthermore, Ex-Im Bank creates barriers to entry for small start-ups because they are not politically connected enough to secure this government patronage. Entrepreneurship is a viable path for many in our generation to secure their own future. Ex-Im is now a stumbling block in our way. GenOpp wants to hammer this point home, and we chose a unique way to tell our peers what a boondoggle this bank is.
If these loans made any financial sense, private lenders would provide them. But private lenders only offer loans to creditworthy individuals or companies, not to huge corporations that are only worthy of such financing because of their political connections. The federal government is overstepping its bounds by offering loans for undisclosed reasons. If this isn’t a red flag for cronyism, I don’t know what is.
The Ex-Im Bank is a dishonest, crony tool that exploits taxpayers to finance huge corporations. Lawmakers have for too long teamed up with powerful businesses and put the interests of younger, less-connected generations aside. But we are not a generation that will be ignored any longer. We are creative and entrepreneurial, and it is time our lawmakers fixed something that wasn’t working so that young Americans had a fairer shot at success. Young people need jobs, not higher spending that only ends up lining the pockets of big corporations. By allowing the Ex-Im Bank to expire, we can take a step forward in freeing our futures.
