Opposition to the Export-Import Bank is an idea, and we are all entitled to our own ideas and opinions. The Examiner‘s Tim Carney is no exception. But before an idea is transformed into public policy it should be measured by its costs and benefits.
So does the idea that Ex-Im Bank should not exist come with costs? In our global economy, where growth markets are not in the U.S. but outside our borders, businesses need government-backed lines of credit and loan guarantees to remain competitive, which is what Ex-Im provides. When these lines of credit are lost, American competitiveness is also lost, translating directly into reduced job creation and job loss. Make no mistake – the loss of jobs in South Carolina and across the nation will be a consequence of doing away with this important institution.
The tangible cost of Ex-Im’s expiration is a reduced quality of life for potentially hundreds of thousands of people. This isn’t about big corporations, it’s about the suppliers to those companies and small businesses trying to expand their markets.
Those opposed to Ex-Im are largely in conservative circles, which is baffling when measured against the so-called “conservative” priorities of reduced government spending, private sector job creation, deficit reduction and reduced regulation.
Abolishing Ex-Im will not reduce government spending. It will not create private sector jobs. It will not reduce the deficit. In fact, it will do the exact opposite. Ex-Im provides loan guarantees that businesses pay back. The interest from Ex-Im loan guarantees is put toward paying down the deficit. Private sector business, including Ex-Im customers, are the engines that create good jobs for everyday Americans.
This is the fundamental mistake of conservative opposition to Ex-Im. It is the placement of a priority on an idea over the idea’s impact on individuals. And the impact to individuals is tangibly detrimental.
Carney and economist Don Boudreaux, whom he quotes, argue that there is a great benefit from Ex-Im’s expiration, but the last I checked, none of the so-called victims of Ex-Im have started hiring now that the bank has lapsed. What I find to be more disturbing is that there could be an economics professor, even a former one, from my esteemed alma mater that doesn’t know the difference between a subsidy and a loan guarantee. I learned that in Econ 101.
Unfortunately, this is the real world, where ideas have consequences. American workers are watching their jobs disappear as companies lose projects, halt expansion plans and move work overseas to one of 60 countries smart enough to support their manufacturing industry. The groups opposing Ex-Im have no vested interest in the communities across the country sustained by the businesses that Ex-Im supports. Think tanks are not matching 401(k) contributions in Ohio. They are not buying movie tickets in South Carolina. It’s those in jobs provided by Ex-Im backed businesses providing for these livelihoods.
Ex-Im Bank is not an idea to be batted around like kittens playing with a ball of string. But that is precisely what happens when one side of a public debate has no vested interest in the people affected by the outcome of their discourse.
The American people can, and will, see for themselves the impact of closing the Ex-Im Bank and will vote accordingly in the next election. And as I argued in my initial piece on the topic, the voters of South Carolina, an early primary state where Ex-Im plays a huge role in job creation and the economy, should make their voices heard and demand action from the presidential candidates seeking their support.
Stephen Aaron is a vice president at LEVICK, a Public Affairs and Communications firm based in Washington, DC. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
