July 19, 2014

Ex-Im Bank Does Little for Small Businesses

Veronique de Rugy

Senior Research Fellow
Summary

According to the Bank's own data, the vast majority of Ex-Im beneficiaries in Texas are large, politically connected firms like Bechtel and Nobel Drilling. From 2007 to 2014, less than 30 percent of Ex-Im's portfolio in Texas went to small businesses.

In the July 7 guest column "Re-authorize Ex-Im Bank to Grow Economy," Export-Import Bank beneficiary Michele LaNoue claims that critics want to shut the bank without regard for small and medium-sized Texas businesses. The opposite is true.

According to the Bank's own data, the vast majority of Ex-Im beneficiaries in Texas are large, politically connected firms like Bechtel and Nobel Drilling. From 2007 to 2014, less than 30 percent of Ex-Im's portfolio in Texas went to small businesses.

The data also reveal that most of Texas exports take place without the bank's help. The same is true on the national level: Over 98 percent of all U.S. exports occur without any help from Ex-Im at all.

What is good for LaNoue's company is not necessarily what's good for Texas. It certainly is not good for other firms in the state, such as Texas Valero Energy, which claims that its business and employees are hurt by Ex-Im subsidies.

The vast majority of Texan firms are put at a competitive disadvantage by their own federal government so that favored firms can enjoy political privileges.