Ex-Im Bank, OPIC Keep Up Small Biz Drumbeat
What could be less palatable to a conservative championing limited government and free markets than a taxpayer-backed government entity boasting its alleged support of small business? A whole group of government entities getting together to boast about their alleged support of small business.
That’s happening June 26 when a variety of these entities will join the Overseas Private Investment Corporation (OPIC) a their Expanding Horizons workshop for Florida’s small businesses:
OPIC officials will speak about the variety of financing and risk mitigation tools the Agency has to offer small businesses expanding into developing markets. Additional speakers will include senior officials from the U.S. Small Business Administration, the Export-Import Bank of the U.S., the U.S. Trade and Development Agency and the U.S. Department of Commerce.
By attending the conference small businesses will be able to “learn more about the benefits of entering developing overseas markets and the ways OPIC and other U.S. Government agencies can support them.”
Of course, by “U.S. Government agencies can support them,” they mean how the American taxpayer can support them.
But is it really small business these entities are supporting? And even if that were the case, why is the government in the business of gambling with taxpayer money?
The Export-Import Bank’s primary beneficiaries are massive, multinational corporations like Boeing and Caterpillar, Inc., and they do not need help from taxpayers. Boeing has admitted they could arrange their own financing. Yet these massive corporations receive receive 80 percent of all Ex-Im Bank financing; small firms receive less than 20 percent of the financing.
Not only do these massive corporations not need the help, but taxpayers are put at great risk by the Bank, because it is mired in mismanagement and dysfunction, which “have been documented for years by Ex-Im’s own inspector general and the Government Accountability Office (GAO). “Ex-Im’s books understate the risk of many of the loans borne by taxpayers,” explains Heritage’s Diane Katz, and according to the Bank’s inspector general the it “lacks a systematic approach to identify, measure, price and reserve for its portfolio risk.”
OPIC, which should be privatized, also poses risks to taxpayers, as the Heritage Foundation explains:
OPIC provides political risk insurance, loan guarantees, and direct loans to U.S. companies that invest abroad. It is an example of “socializing the risk and privatizing the profit.”
Socializing risk and privatizing profit, is of course, not how the folks at the conference June 26 will frame their work to prospective clients. But it’s the reality of how they operate.
That’s the same reason why the Ex-Im Bank charter should be allowed to expire in September. As Diane Katz puts it, “Allowing the bank charter to expire should be an easy call for any lawmaker who can distinguish between propaganda and fact.”