With the deadline nearing to re-authorize the Highway Trust Fund or start shutting down the country's transportation system, Congress finally bestirred itself. But not before the U.S. Senate decided to play a little politics and add an extension of the Export-Import Bank to the bill. Which will doubtless please all those interests that would rather have the federal government subsidize them than depend on the free market. Who can blame them? Why should they have to stand on their own two feet like the rest of us? Not when Uncle Sucker is ready to extend friendly credit terms, guarantee loans, and provide insurance for whatever it is these outfits are selling overseas.
The best definition of how the Ex-Im Bank works, or rather doesn't, was offered by the Senate's own majority leader, Mitch McConnell, in the course of the debate over extending it--a "New Deal relic that has outlived any usefulness it might once have had."
Instead of extending the best features of the New Deal, like the Glass-Steagall Act that reformed the banking system back in the 1930s, and lasted till the Clinton administration decided to kill it, the Senate has chosen to extend the worst. Ah, but what if it hadn't? Would our export market dry up, the economy collapse, and the sky fall?
Nah, said Senator McConnell, who refused to be panicked. "If a project is worthy," he pointed out, "private banks will step in to finance it." Why not? They're interested in making money off good loans. What they're not interested in is backing unworthy investments. Like those the Export-Import Bank subsidizes--with our tax money.
Yet the re-extension of the Ex-Im Bank cleared the Senate 67 to 26, demonstrating that, whatever party is in power, some things never change--like the enduring appeal of crony capitalism.
Editorial on 07/29/2015