I had expressed my severe disappointment back in early February when we heard rumors that President Trump was going back on one of his strongly held campaign themes of wanting to do away with the massive slush fund and bastion of crony capitalism known as the Export Import Bank. Those fears were pretty much confirmed last week during a flurry of announcements which seemed to signal other such reversals. (Take a deep breath and keep repeating, at least we got Gorsuch. At least we got Gorsuch. At least we got Gorsuch.) Now it’s official, with the president making two nominations for positions on the bank’s board. Curiously, the two individuals are seemingly miles apart in terms of their attitude toward Ex-Im. (Politico)
President Donald Trump on Friday announced that he intends to nominate two former Republican lawmakers to fill empty seats on the Export-Import Bank’s board, one of whom has been a prominent opponent of the agency.
Trump tapped Scott Garrett, an Ex-Im critic and a former House member from New Jersey, as president of the bank’s board, and Spencer Bachus, a former chairman of the House Financial Services Committee, as a board member. If they are confirmed, the bank would once again have a quorum, and therefore the ability to approve deals above $10 million.
Ex-Im guarantees loans for foreign companies interested in buying U.S. exports, and also runs programs such as providing insurance and credit to help small businesses secure new customers and working capital.
While leaving the bank’s board unmanned would have been closer to a permanent solution to the problem, the stupidly optimistic side of me has to wonder if these nominations don’t signal something of a “third way” approach which might not be a complete disaster. Last year, when it looked like we had finally driven a stake through the heart of the bank, former New Jersey Congressman Scott Garrett was listed by Heritage Action as being on record against Ex-Im and he had previously referred to it as, “a bank that embodies the corruption of the free enterprise system.”
Conversely, Scott Garrett used to represent Alabama, the home of one of Boeing’s larger plants. (Boeing is the recipient of the vast majority of Ex-Im’s largess and Garrett is a steady supporter.) So what does this mean? We’ve got the pro-bank guy being nominated to be president of the board but one of the other votes any significant funding will require is to be held by a bitter opponent. A more hopeful person could see it as a signal that perhaps the gigantic giveaways benefiting Boeing may be shut off (or at least tapered back) and the focus of the bank might return to actual small businesses as was originally intended. Is that possible? At the New York Times business section, Alexandria Stevenson sees hints that what Trump is actually looking to do is “reshape the bank.”
Mr. Trump said in an interview this week he no longer wanted to eliminate the Export-Import Bank, adding that he planned to fill two openings on the board, which has five members…
“It turns out that, first of all, lots of small companies are really helped, the vendor companies,” he said, adding that other countries give similar assistance. “When other countries give it we lose a tremendous amount of business.”
Choosing to focus far more heavily on small businesses might turn Ex-Im into something which is at least tolerable (though still picking winners and losers) and represent a “reshaping” of the institution. Could that work? I suppose anything could happen in the post-2016 era, but Boeing moves a lot of money around in lobbying circles and donates to almost everyone in Congress. With the door once again open for the bank, it’s hard to see them not being able to muscle their way through. I’m prepared to be joyfully proven wrong, but this isn’t my first time at the rodeo. I wouldn’t bank on it… pun intended.