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Right should support the Export-Import Bank

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Rising exports mean jobs and a growing economy.  Nothing complicated about that.

And there is nothing complicated about supporting the federal government's efficient, profitable and very professional support of exports, which produce real jobs at great wages.

That support comes primarily from the U.S. Export-Import Bank (the "Ex-Im"), which since 1934 has helped finance and insure export transactions from American manufacturers to foreign purchasers.

Last year alone, the Ex-Im provided more than $6 billion in such financial assistance, and netted more than $700 million to the U.S. Treasury.  Supporters of international trade and all the benefits it brings and of a vibrant American manufacturing sector want to increase the Ex-Im's authorization to provide support.

As with any bank, there is a risk of default, and some transactions go bad and cost money.  But the risk is quite low measured against any other enterprise. 

"Borrowers have defaulted on less than 2% of all loans backed by Ex-Im since its inception in 1934, a default rate lower than commercial banks," The U.S. Chamber of Commerce argues in a letter urging rapid reauthorization by Congress of Ex-Im, which must happen this spring.


"he U.S. Export-Import Bank is a vital tool to help grow U.S. exports and increase American jobs," adds the National Association of Manufacturers (NAM).

"Ex-Im Bank is currently operating under an extension that expires on May 31, 2012," NAM continues. "Congress must pass legislation to reauthorize Ex-Im for the long term and substantially increase its lending authority."

NAM concludes its appeal by noting the consequences of inaction: "Absent congressional action, the Ex-Im will run out of funding ability in the coming months—derailing pending sales of U.S. manufactured products and harming manufacturing companies of all sizes."

So, no-brainer, right?  Wrong. 

"[M]any conservatives question the propriety of such government financing in an economy based largely on free enterprise," argued a February 8 white paper from the Republican Study Group (RSC), a generally excellent organization led currently by Ohio's Jim Jordan, a rising star of the conservative movement.

The RSC Policy Brief's author, Ja'Ron Smith, marshals some extraordinary arguments against Ex-Im, including the stunning assertion that it represents an unconstitutional participation of the federal government in commerce, a novel proposition to me and I suspect 95%+ of the Constitutional Law professors at work in the nation's law schools today.

Smith also asserts that the Ex-Im is a lot like Fannie and Freddie, and even operates to create "competitive disadvantages" for "American competitors of the companies who benefit from the Ex-Im," citing domestic airlines who object to the Bank's assistance to Air India. 

Since none other than The Washington Examiner's own Tim Carney is cited as the authority for the proposition that Ex-Im is an assault on everything conservative, I have to note my dissent, and I suspect the dissent of "many" other conservatives who think Ex-Im is not merely an appropriate role for the federal government but one of its most urgent missions, and not just because of the tens of thousands of real jobs it helps nurture and maintain.

This is a core freedom-and-stability, peace-and-prosperity issue.  Support of vibrant international trade, particularly with crucial allies whose economies are putting down deep roots in free or nearly-free markets at home and abroad, is wholly within the Framers' vision, and Brother Carney is simply wrong to list Ex-Im as just another expression of President Obama's "National Greatness Liberalism," as Tim put it.

Critics of Ex-Im might want to reread Federalist 11 and not with the blinkered view that it is limited to Hamilton's defense of a robust naval power, though it is that.

Hamilton argued for a trading empire, a robust union deploying its combined power and resources to advance the nation's interests abroad to the benefit of its merchants and thus its people at home.

For nearly 80 years, Ex-Im has been contributing to that originalist policy, and it would be a terrible triumph of an absolutist ideological tilt to strike even partially at one of the things the federal government not only ought to be doing, but which it has been doing and doing well under both Republicans and Democrats.

There are scores of arguments to make against the president's disastrous interventions in the marketplace.  Conservatives weaken their credibility when they shoot at successes and destroy jobs in the process.

Ex-Im is a success, one which conservatives can support proudly and from which they can draw lessons on the right functioning of the federal power with which to argue against the abuses and distortions of that power.

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