Don’t buy Ex-Im opponents’ magic tricks

There’s a telling moment in the 2013 crime-magic caper “Now You See Me,” when a former magician played by Morgan Freeman warns an investigator, “Look closely, because the closer you think you are, the less you’ll actually see.”  The age old secret of the magic arts—diverting the audience’s attention from what’s really going on—is clearly at play in the latest attempt of opponents of the Export-Import Bank of the United States (Ex-Im) to destroy this jobs-creating, small business-supporting institution.
 
Some of the Bank’s opponents, including an economist who wrote a recent opinion piece in The Hill (“Ex-Im Should Go,” Feb. 19) charge its activities benefit large, politically connected companies. These arguments represent a clever sleight of hand. Ex-Im actually helps American companies large, medium and small, and supports their workers—some 1.2 million since 2009—aiding them in the hardball competition for overseas sales against businesses which receive massive foreign government assistance. In reality, nearly 90 percent of Ex-Im Bank’s transactions go to small businesses.  And all categories of American businesses are able to apply for Ex-Im support; that’s why wineries and pickle makers have turned to it for assistance in exporting as well.

{mosads}Yes, large companies such as Boeing have benefitted from Ex-Im financing, which eventually is repaid more than in full at a net benefit to the Treasury.  And considering the stakes in the global competition to sell manufactured goods, we shouldn’t apologize for that.  The company’s overseas airplane sales are up against stiff foreign credit agency-backed competition, but they account for the single largest positive category of U.S. exported goods. Sadly for the sake of reasoned public debate however, Bank opponents think the public is not sophisticated enough to recognize that for every Boeing aircraft sold, literally thousands of medium and small supplier companies throughout the country indirectly benefit. And there’s also the invisible lucky rabbit in the room: the hundreds of medium and small sized companies that gain every time for years on end when a foreign airline which purchased Boeing aircraft needs their expertise and equipment for maintenance, repair or overhaul work.

As long as we’re on the subject of magic tricks, one of the oldest in the Ex-Im opponents’ repertory is to convince the audience that the clear glass window they are looking through contains no distortions.  But capital markets aren’t perfectly crystal clear.  Sometimes private sector banks are unable or unwilling to assume credit and country risks, and the government is needed to step in to fill gaps or flaws in the trade financing picture.  This is the theory upon which Ex-Im operates and it’s a solid one.

For those members of Congress on the Republican side of the aisle, I urge them in the spirit of Ronald Reagan not to just blindly trust Bank opponents, but actually to verify the real facts about this institution that every GOP President from Eisenhower to George W. Bush has supported. Check in with the owners of the many small companies in your states and districts that owe their livelihoods to robust sales in foreign markets and directly or indirectly have benefited from the Bank. Find out if they really want the Bank to end. And to those congressional Democrats, who are reluctant to assist job-creating corporations, please heed the words of President Clinton, who said, “Export expansion obviously encourages our most advanced industries. I am committed to promoting these exports, and that’s where the Ex-Im Bank plays an important role.”

While it might be nice in theory to eliminate all foreign export credit agencies with the wave of a magic wand, the reality is 60 countries provide export credit and are aggressively attempting to tilt the playing field in their favor. Unilaterally making Ex-Im disappear would certainly be a bad trick to play on the American public.

Blakey is president and CEO of the Aerospace Industries Association.