By Herman Cain ——Bio and Archives--July 26, 2015
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Ex-Im’s supporters say the bank is profitable and has a minuscule default rate, ignoring that Ex-Im uses government accounting. Ex-Im estimates that its six largest credit programs will yield a $14 billion surplus from 2015-2024. But the Congressional Budget Office projects that if Ex-Im used fair-value accounting as private companies do, those six programs would cost taxpayers $2 billion. Ex-Im’s financial exposure ballooned to $112 billion in 2014, up from $75.2 billion in 2010. The Heritage Foundation’s Diane Katz has documented a litany of bad bets and fraud, including a $3 billion deal in Papua New Guinea that lost track of $577 million. Ex-Im’s Inspector General found in May that the bank’s “risk assessment for FY 2014 reporting provided limited insight into the actual risk of significant improper payments.”President Obama wants to revive Ex-Im, and so do most congressional Democrats. That makes sense because Democrats love to see government intervene in markets, including credit markets. The U.S. Chamber of Commerce wants Ex-Im back because its members enjoy accessing easy credit while taxpayers suck up the risk. And while most House Republicans oppose it, House Speaker John Boehner is trying to rescue Ex-Im on behalf of his big-government-loving business allies by attaching its resurrection to a highway bill that will be hard to vote against. It remains to be seen whether enough House Republicans will stands firm to keep Ex-Im from coming back. If not, it’s just one more example of how we celebrate the attainment of Republican majorities because we think they will serve as a real check on Obama – only to be disappointed time and again when they fail to actually do so in practice. If the companies in question need loans and are really good credit risks, then private markets will lend to them profitably. There is no reason for the government to distort this market by playing any part in it. And there is no reason for John Boehner to be Speaker of the House if he can’t understand that.
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