April 30, 2015

Big Data, Big Business, and Big Government: How Bureaucrats Are Keeping People in the Dark about the Export-Import Bank

Veronique de Rugy

George Gibbs Chair in Political Economy
Summary

For years, many in the free market movement—myself included—have argued in favor of abolishing the U.S. Export-Import Bank, a New Deal–era agency that exists to facilitate a relatively small number of domestic exports through its taxpayer-backed credit programs. The fundamental case against the Ex-Im Bank is simple: It's not the federal government's job to subsidize private businesses, period.

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This article appears in the June edition of Reason Magazine

When the feds disappear huge amounts of data about a dysfunctional, cronyist federal agency without warning, it should raise a few eyebrows. When the bureaucrats evade questions about what happened to the trove of facts and figures, alarm bells should start ringing. And when they staunchly refuse to restore the missing data, despite an outcry from researchers and activists, it's time to take matters into your own hands.

For years, many in the free market movement—myself included—have argued in favor of abolishing the U.S. Export-Import Bank, a New Deal–era agency that exists to facilitate a relatively small number of domestic exports through its taxpayer-backed credit programs. The fundamental case against the Ex-Im Bank is simple: It's not the federal government's job to subsidize private businesses, period.

Unfortunately, principled arguments against programs like this one are a tough sell to policy makers, Republicans and Democrats alike. That's because most politicians are slaves to special interests who have gotten very good at explaining why small businesses or producers of green energy or companies located in hard-up congressional districts should be the exception to that rule. It's also difficult to rally the losers in this bargain against it, because the costs are dispersed across a mass of victims, most of whom either are unaware of the harm they are incurring, or know but lack the motivation to make their objections heard.

Ex-Im, for example, artificially reduces the cost to foreign airlines of buying Boeing planes. Politically powerful Boeing reaps the rewards, but U.S. airlines, which don't benefit from the subsidies granted to their overseas competitors, are harmed. However, a U.S. carrier may not appreciate the disadvantage it's at until after the savings it isn't getting have allowed a foreign airline to open a new route or reduce its ticket prices. By then, it may be too late to speak up.

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