Apr 09 2014
The American economy is the envy of the world, primarily because it is still seen as a place where anyone – regardless of who you are or where you come from – can work hard, play by the rules, and succeed.
That belief is predicated on the notion that America has a thriving, competitive and free enterprise economy in which the best ideas and hardest workers win the day, while those who are less successful always have a fair chance to try again.
The free enterprise system is not perfect, but it is fair. Unfortunately today, Americans increasingly believe our system is rigged. And in President Obama’s America, they have good reason.
From the stimulus to cash-for-clunkers, from the bailouts to cap-and-trade, from Dodd-Frank to Obamacare, every name-brand initiative of the president’s term has distorted public policy to privilege well-connected insiders and elites at the expense of taxpayers and consumers.
The Export-Import Bank is another taxpayer-funded example of distorted public policy that further erodes Americans’ confidence in our markets and our system.
In short, ExIm Bank exists to dole out taxpayer-backed loan guarantees to help American exporters. Most of the benefits go to large corporations that are perfectly capable of securing private financing anywhere in the world. That is to say, Congress allows ExIm Bank to risk taxpayer money unnecessarily to subsidize well-connected private companies.
This kind of public policy privilege, best described as “crony capitalism,” is a threat to the free market and its moral underpinnings.
Crony capitalism corrupts the free market by rewarding political connections over competitive excellence. It subverts the rule of law by codifying inequality. It undermines social solidarity by pitting citizens against one another, twisting cooperative communities into rival special interests.
That’s why in Obama’s crony-economy we are seeing record corporate profits, but stagnant middle class wages and an anemic, jobless recovery. Cronyism has promoted and exacerbated inequality. It has isolated the poor and squeezed the middle class.
There are three principal reasons why we should start making this part of the debate right now.
First, we should do this to fix the economy. Nearly all net job creation comes from firms that have existed for five years or less. But cronyist policies tilt the playing field against those very firms and make it next to impossible for them to succeed, grow, and create new jobs. Leveling the playing field creates competition in both directions: it allows smaller, younger firms to compete, and it forces larger, older firms to do the same. That dynamic competition is what creates new jobs, growth, and opportunities up and down the economy.
Second, it’s a matter of basic justice. The American people have a fundamental right to equal opportunity under the law, and it’s government’s job to protect it. If the people who “work hard and play by the rules” are forced by government to bail out, prop up, and subsidize elite insiders who don’t, then the land of opportunity isn’t.
Third, as those who most support free enterprise and equal opportunity, Republicans must bear the burden of reform. We believe in the power of free markets and a voluntary civil society to expand opportunity, lift people out of poverty, and support a secure and prosperous middle class. So it’s our responsibility to follow through on our convictions and close our own branch of the Beltway Favor Bank.
And it starts with conservatives having an agenda to end cronyism. Fortunately, some of us have already started working on it.
These proposals focus on protecting the American people from the economic harm that comes from the collusion of big government, big business, and big special interests.
For example, we have policy reforms that:
- force Congress to periodically reevaluate expensive regulations,
- level the playing field for all energy producers,
- open our higher education system to new students, teachers, and competition,
- give Americans the right to choose whether or not to join a union,
- cut out the bureaucrats who waste critical infrastructure funding,
- and, yes, eliminate taxpayer subsidies to organizations like the ExIm Bank.
This agenda will create jobs, grow the economy, and increase opportunities by allowing small businesses - and forcing big businesses - to compete on a level playing field, where success depends on customer service, not political connections.A conservative agenda to get right on cronyism will be good for jobs, good for the economy, and, above all, the right thing to do.
Eventually this year, the reauthorization of the ExIm Bank will be before the Senate and I hope my colleagues keep these points in mind.
But before us today is the nomination of Wanda Felton to be First Vice President of the Export-Import Bank.
Ms. Felton sat on the board of the ExIm Bank at a time when it declined to take several recommendations from its own Inspector General to lower its risks, which, in turn, put taxpayers at greater risk.
The ExIm Bank has also continued to make claims about the importance of ExIm on job creation without necessary caveats or references to their methodology, claims that the GAO heavily criticized.
I cannot support putting someone back into this position after largely ignoring these recommendations by government watchdogs.
For all of the reasons I've mentioned, I respectfully ask my colleagues to oppose the nomination of Wanda Felton to be First Vice President of the Export-Import Bank of the United States.