Why did GE CEO, Jeffrey Immelt, join the Obama Administration as part of the government’s “Economic Recovery Advisory Board”? To help protect the gravy train for his company, and to keep favors going for friends.
Thus, the Campaign for Liberty:
General Electric’s Chief Executive Jeff Immelt recently claimed that closing the Export-Import bank would mean that “we are basically making a statement as a country that we do not think that exports are important.”
Is that true? If we close the Ex-Im Bank, would exports simply cease to exist? Is this really just, as the Financial Times claimed, part of “Tea Party attacks on big business”? Is GE, who happens to be one of the main beneficiaries of the bank, just looking out for the interests of the American people?
In a word, no.
In a free market, the government does not interfere with voluntary trade. The government cannot prevent people from exchanging their own property, but neither can it force them to make a trade against their will. This is, of course, equally true of international trade as it is domestic trade. So the free market position does not deny that exports are important at all. Indeed, having an international division of labor is extremely important in this mindset, as it promotes peace and prosperity between nations. Thus Frederic Bastiat, the great defender of liberty and the scourge of protectionists, is famously quoted as saying that when goods don’t cross borders, armies will.
There’s a lot of manufactured hysteria over the possibility of closing down the Export-Import Bank–and I doubt many Americans know it exists, let alone understanding what it does. Simply put, it’s just another part of the crony-capitalist system that is increasing income disparity between people like Jeffrey Immelt and the rest of us.
What the Ex-Im Bank does is to subsidize corporations with taxpayer backed loans. The American people are taxed so that Boeing and GM can get artificially cheap money. It is one of the most blatant examples of corporate welfare out there today, an attempt by the state to pick winners and losers. Closing the Ex-Im Bank would not be an attack on free trade at all, but rather the defense of it. Business works by someone producing goods that consumers want, and engaging in a voluntary trade with them for mutual benefit. Subsidization works by robbing Peter to pay Paul.
When government gets involved in business, it becomes a tool to be purchased in order to select winners and losers. Companies that should suffer grave loss for stupid decisions get propped up, and competitors get unjustly discriminated against and prevented from succeeding by government action.
The lobbyist, who bribes, becomes more important in Washington DC’s blurred vision than the engineer who actually designs and produces something, and the salesman who successfully markets a product that will benefit citizens.