Ex-Im Bank: Hair Today, (Hopefully) Gone Tomorrow
The Export-Import Bank likes to throw around the fact that almost 90 percent of their “transactions” are to small-businesses. For a second, let’s forget how misleading that statistic is since those “transactions” only account for less than 20 percent of their total dollar amount of authorizations and take a look at what one of those transactions includes.
Davex Labs tried and failed to receive credit insurance to export less than $5,500 in hair products to Russia. Who steps in to save the day? You, the taxpayer.
If the private sector is unwilling to insure a transaction that miniscule, why is the government in the business of taking up the slack? The simple answer is that they shouldn’t be. As the Heritage Foundation’s Diane Katz notes:
Ex–Im advocates offer myriad excuses for maintaining government interference in export financing, including job creation, gaps in private investment, and government subsidies lavished on foreign firms. Such justifications do not stand up to the facts, and the purported benefits, if any, are not commensurate with the risk to taxpayers.
It’s also worth noting that in the case of Davex Labs, the Bank is insuring yet another transaction to Russia, a nation that threatens our national security and which the bank currently subsidizes to the tune of $1 billion. While most would consider this deal illogical and misguided, Ex-Im tags it as one of their success stories and touts that “no transaction is too small for our support.”
In the grand scheme of federal programs and agencies, the Ex-Im Bank is relatively small. Let’s take a line out of their book and say that “no deal is too small” when it comes to cutting corporate welfare and let the bank’s charter expire.