The list of local companies supported over the years by the Export-Import Bank is not filled with household names. There is Conquest Consulting Group, and The Neil Jones Food Company, and Northwest Natural Products, among others — each of them providing local jobs while conducting international business with assistance from the federally operated bank.
It is a story repeated throughout Washington. As Kris Johnson, president of the Association of Washington Business, wrote in a recent opinion piece for The Seattle Times: “The bank provides a lifeline to ensure the health and growth of our state’s critical manufacturing sector. … Since 2012, Washington state’s economy has benefited greatly. In total, 174 companies utilized the bank’s services, representing $78 billion in export value to the state.”
Given the importance of the Export-Import Bank in Washington — and in other states — Scott Garrett represents a disappointingly poor selection to head the agency. President Trump should rescind his nomination of Garrett and support efforts to return the bank to full strength.
During last year’s presidential campaign, Trump echoed staunch conservatives who are working to shut down an enterprise that has existed since 1934. The Ex-Im Bank provides loan guarantees and insurance for American manufacturers to help those companies compete internationally. Critics claim this amounts to crony capitalism and is corporate welfare for large manufacturers such as Boeing. Those critics in Congress managed to shut down the bank for six months in 2015 while delaying its re-authorization, and they have limited its activities since then.
After meeting with Boeing CEO Dennis Muilenburg in April, Trump said: “I was very much opposed to Ex-Im Bank because I said, ‘What do we need that for IBM and General Electric?’ It turns out that, first of all, lots of small companies will really be helped, the vendor companies. But also maybe more importantly, other countries give” such aid, and so “we lose a tremendous amount of business.”
That represents a strong argument in favor of the Export-Import Bank. When Boeing strikes a multibillion deal to export airplanes, small vendors in Washington and elsewhere also benefit. And, thanks to the repayment of loans, the Ex-Im Bank routinely makes money; in 2013, it returned more than $1 billion in profit to the U.S. Treasury.
Trump’s newfound understanding of the bank, however, was short-lived. Instead, he took a step to scuttle operations by nominating Garrett, a former Republican congressman from New Jersey who had been an outspoken critic of the bank while in office.
This continues an unfortunate strategy driven by Tea Party Republicans in Congress. Rather than help government work for the public, the idea all too often is to create conditions under which government fails — thereby reinforcing the trope that government can’t work. The problem with this ideology is that the Ex-Im Bank is one of the parts of government that is successful in a competitive market. As Jay Timmons of the National Association of Manufacturers wrote for The Wall Street Journal: “At least 85 foreign-government-backed export credit agencies are working aggressively to support their own domestic industries, pulverizing manufacturers in America.”
The United States should do the same by supporting the Export-Import Bank. Garrett’s unwillingness to renounce his previous opposition to the bank and his wishy-washy support for it now mark him as the wrong person to guide an enterprise that benefits thousands of companies both large and small.