Yes, unbelievably, we are subsidizing foreign companies so they are in a better position to compete against our own. This, in spite of the fact that Ex-Im’s own charter clearly states it can only grant loans to credit-worthy entities and must never undermine American companies.
But maybe the most egregious example of how dysfunctional and misguided the Ex-Im Bank’s actions really are is present in the airline industry. The bank provides financing to foreign airlines that in turn purchase American aircraft, allowing them to compete against U.S.-based carriers. These foreign companies use our subsidy to offer lower prices since American companies cannot qualify for this corporate welfare, and they, in turn, lose business.
Why is taxpayer-backed money being wasted on companies that should be able to seek capital from private lending institutions? And if banks decide against providing some of these companies with loans, shouldn’t that tell us something?