ON EX-IM BANK, THE DEMOCRATS ARE THE REAL CORPORATE SHILLS

BY VERONIQUE DE RUGY

03.15.15

When it comes to being pro-big business, conventional wisdom says the Republicans are most likely to distribute the goods. It’s a valid criticism. Republicans are indeed big supporters of business interests. But these days, they are second to the Democrats.

Case in point: The congressional Democrats’ recent and unanimous support for the Export-Import Bank. A bill recently introduced by Democrats would reauthorize the bank’s charter for seven years and expand its lending ability by $20 billion.

The ExIm Bank has been around for decades. Its primary activity is to extend cheap loan guarantees and direct loans to foreign companies to buy U.S goods under the pretense of boosting exports and creating jobs.

Don’t buy it. Economists have shown that these kinds of export credit subsidies will never raise the overall level of trade. The subsidies are also hurtful (PDF) since they simply redistribute wealth away from unsubsidized American firms, employees, and consumers and direct it toward a tiny number of beneficiaries.