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 Airlines 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?
The problem isn’t limited to Delta. A recent Cato Institute study estimated the net costs imposed on firms in downstream industries on account of Ex-Im’s subsidies to firms in supplier industries to be $2.8 billion per year, and that firms in 80 percent (189 of 237) of U.S. manufacturing industries incur costs that exceed the total value of Ex‐Im subsidies they may receive. In other words, the average firm in four of every five manufacturing industries is made worse off by the Export‐Import Bank.
Oklahoma is home to hundreds of companies in the industries that have been victimized in precisely the same manner as Delta. Oklahoma’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. Crane Carrier Company of Tulsa, a producer of truck and bus bodies; search and navigation equipment manufacturer Frontier Electronic Systems Corporation of Stillwater; Oai Electronics, which produces printed circuit boards in Tulsa; and Cooper Cabinet Systems, a kitchen cabinet manufacturer in Oklahoma City are just a few examples of Oklahoma businesses that bear the costs of Ex-Im’s subsidies. There are many more.
According to the Cato Institute study, the five broad manufacturing sectors incurring the largest downstream costs from Ex-Im’s subsidies account for 23 percent of Oklahoma’s manufacturing economy. Included among the top ten most heavily burdened manufacturing industries are Oklahoma’s fourth, fifth, sixth, and seventh most important manufacturing industries: food, beverage, and tobacco; chemicals; plastics and rubber products; and, computers and electronics, respectively.
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 Oklahoma’s business victims to speak up as well.