One pillar of President Obama’s “Win The Future” America, Inc., National Greatness Liberalism industrial policy is his export initiative, which is driven largely by a subsidy agency called the Export-Import Bank of the United States — Ex-Im for short.
Ex-Im subsidizes U.S. exports — mostly Boeing jets — by giving taxpayer-backed financing to foreign buyers. This is called private profit (for Boeing and the foreign airline) and public risk (U.S. taxpayers foot the bill if the foreign buyer defaults).
These subsidies sure help Boeing, but some U.S. businesses aren’t happy about them. Bloomberg reports:
The trade association for the largest U.S. airlines filed the lawsuit yesterday in federal court in Washington, claiming the bank didn’t seek public comments or consider the impact on the U.S. airline industry before approving $1.3 billion in loan guarantees and $2.1 billion in preliminary commitments to support the sale of 30 Boeing Co. (BA) aircraft to Air India….
The group asked the court to find the loan-guarantee commitments unlawful, to prevent them from being issued and to require the Export-Import Bank to study the loan’s potential impact on U.S. industry and jobs.
Ex-Im has previously helped foreign companies at the expense of U.S. companies, like when the agency helped GE build a plant in Mexico so that GE could shut down its plant in Bloomington, Indiana.
These stories only show more acutely what we already know about government intervention in the economy: it can always benefit certain parties, but at the expense of the economy as a whole.
