Andy Koenig: Kansas won’t miss Export-Import Bank

Has Kansas’ economy suffered since July 1? It was supposed to.

At least that’s what lobbyists in Washington, D.C., predicted would happen after the Export-Import Bank expired on June 30. Over the past decade, this little-known federal agency handed out more than $200 billion in taxpayer-backed financing to businesses, supporting only 1.6 percent of Kansas’ exports along the way. Many of those companies claimed the sky would fall if Congress didn’t keep the taxpayer money flowing.

Then Congress called their bluff.

At midnight on June 30, the bank expired. And the sky didn’t fall, either in Kansas or anywhere else in America.

This shouldn’t come as a surprise. The Ex-Im Bank is corporate welfare, using public money to finance private profits. Although this helps a select few well-connected companies, it simultaneously harms the broader economy. In that sense, Ex-Im’s expiration is actually good news for countless businesses, big and small, in Kansas.

Here’s why. The Ex-Im Bank supports less than 2 percent of America’s exporters. The other 98 percent – more than 300,000 companies – don’t get this taxpayer-financed help.

This has put many of those firms at a competitive disadvantage for years. Similarly, the bank helps foreign companies gain market share over American companies when it helps them buy exports with taxpayers’ help. And when the bank supports one business’ exports, that same business’ local buyers can face higher prices for the same product.

That isn’t what the Ex-Im Bank’s beneficiaries have been saying. They’ve been claiming that the bank’s expiration will cost jobs and hurt the economy. One company has even threatened to move jobs overseas.

Yet if these deals are actually beneficial, the private sector will finance them. Financial analysts on Wall Street have already indicated that private banks want a bite of Ex-Im’s business.

Unfortunately, Ex-Im’s backers are still scheming to resurrect the bank later this month. Instead, they should look to policies that could boost America’s exports without putting taxpayers on the hook.

Congress should lower the corporate tax rate, which at 39.1 percent is currently the highest in the industrialized world. This puts American companies at a gross disadvantage compared with their international competitors.

Lawmakers should scale back excessive and unnecessary regulations. Federal regulations alone cost nearly $2 trillion every year, or about 10 percent of America’s economy. Businesses can’t create jobs and grow the economy when they’re strangled by red tape.

And Congress should also work to break down artificial barriers to international trade. Tariffs, duties and other protectionist barriers stifle global commerce.

Reforms in these areas would dramatically improve America’s economy. Resurrecting the Ext-Im Bank would not.

This story was originally published July 11, 2015 at 7:01 PM with the headline "Andy Koenig: Kansas won’t miss Export-Import Bank."