Ex‐Im is a government‐run export credit agency, which provides below market‐rate financing and loan guarantees to facilitate sales between U.S. companies and foreign customers. In 2013 roughly 75 percent of Ex-Im’s subsidies were granted for the benefit of just 10 large companies — including Boeing, Bechtel, and GE — that could easily have financed those transactions without taxpayer assistance.
If you count yourself among the majority of Americans fed up with the unsavory, business‐as‐usual, back‐room dealing that continues to define Washington, D.C., take heart in the fact that the charter of the scandal‐prone U.S. Export‐Import Bank is set to expire on June 30. If you are among the misinformed or privileged few who support the bank’s reauthorization, how do you justify the collateral damage Ex‐Im inflicts on companies in Massachusetts and across the country?
Like all Washington subsidy programs, Ex‐Im gives to the few, but takes from the many.
Ex-Im’s management and its Washington‐savvy supporters have been running a shell game, dazzling Congress with the shiny new export sales it finances, while drawing policymakers’ attention away from the costs those activities impose on everyone else. Last year, Delta Air Lines finally had enough and complained about Ex‐Im loans to Air India, which were granted to enable the foreign carrier to purchase aircraft from Boeing. Delta officials demonstrated how those taxpayer subsidies, made for the benefit of Boeing’s bottom line, put Delta at a competitive disadvantage by reducing Air India’s capital costs, enabling it to lower fares and compete more effectively with Delta for international travelers. Why should taxpayer dollars be used to promote the interests of one U.S. company over another?
Massachusetts is home to hundreds of companies in the industries that have been victimized in precisely the same manner as Delta. Massachusetts’s manufacturers of aerospace products, automobile parts, computer network equipment, electrical products, machinery, semiconductors, telecommunications equipment, and more can be counted among the victims because their suppliers secured Ex‐Im dollars to subsidize sales to foreign customers. Thermo Optek Corp., a process‐control instruments manufacturer with 1,150 employees in Franklin; semiconductor manufacturer Intel with 900 workers in Hudson; Schott North America in Southbridge, which employs 220 people making optical instruments and lenses; and, Nexx Systems of Billerica, which produces integrated circuits are only some examples of Massachusetts businesses that bear the costs of Ex-Im’s subsidies. There are many more.
According to a Cato Institute study, the five broad manufacturing sectors incurring the largest “downstream costs” from Ex-Im’s subsidies account for 27.4 percent of Massachusetts’s manufacturing economy.
The Export‐Import Bank temporarily benefits some companies in a conspicuous manner. But it does so by quietly burdening often unwitting American companies in downstream industries. Delta and some others have cried foul. It’s time for Massachusetts’s business victims to speak up as well.