Economy

Bernie Sanders is Dead Wrong on the Export-Import Bank

export-import-bank
JM Ashby
Written by JM Ashby

"Democrats are not always right" Senator Bernie Sanders (I-VT) said during last night's Democratic presidential debate.

I think we can agree insofar as no one is always right but, on this issue, Democrats and even a significant number of Republicans are right while Bernie Sanders is dead wrong.

Sanders spoke out against the Export-Import Bank during last night's debate after former Secretary of State Hillary Clinton called him out for voting against reauthorization of the bank.

Sanders responded by referring to the bank as "corporate welfare."

“I don’t want to break the bad news — Democrats are not always right. Democrats have often supported corporate welfare; Democrats have supported disastrous trade agreements," Sanders said during Sunday's Democratic debate in Flint, Mich.

"But on this issue, I do not believe in corporate welfare."

This only makes sense if you have absolutely no idea how the Export-Import Bank works.

The bank does not subsidize any American or foreign corporations, it merely provides loans and financing to foreign companies that wish to purchase American-made exports. The Export-Import Bank is not funded by taxpayers, it's funded by the fees and interest payments it collects from clients.

Shuttering the bank provides absolutely no benefit to American workers or small businesses. Many small businesses rely on the bank to access foreign markets. In fact, shuttering the bank last year actually cost hundreds of jobs in multiple sectors of the manufacturing industry because foreign buyers no longer had access to capital to buy American-made goods.

The idea that the bank is an example of "corporate welfare" or somehow detrimental to small businesses may sound familiar because that's exactly what the House Republican Freedom Caucus says. That's exactly what senator and Republican presidential candidate Ted Cruz says. Failed GOP candidate Jeb Bush took a similar stance.

Sanders' position on the Export-Import Bank puts him on the same side as the most radical factions in Congress and against the Democratic party, the business community including the Chamber of Commerce, and a significant number of state and congressional Republicans who want to keep jobs in their districts.

The Sanders campaign responded to criticism of his stance last night by saying "more than 75 percent of Export-Import Bank financing goes to large profitable corporations which have moved manufacturing plants and jobs overseas."

That statement says more about Sanders than the corporations he's decrying.

It may be true that some of the corporations who benefit from Export-Import Bank financing have outsourced jobs in the past, but punishing them now by shuttering the bank will not actually bring those jobs back. On the contrary, it will shift even more jobs overseas just as we saw last year. Moreover, the financing isn't actually provided directly to the American corporations Sanders is pointing a finger at; the financing is provided to foreign companies that want to purchase products manufactured in America by those corporations.

In other words, Sanders would cut off workers' noses to spite their faces. His opposition to the bank is purely ideological, not practical or substantive. It would be a misnomer to say opposition does more harm than good because it does no good at all. There's no cookie for closing the bank. There's no there, there.

Many people including myself devoted a significant amount of time last year to explaining why the Flying Monkey Caucus and the likes of Ted Cruz are wrong about the Export-Import Bank. To now be forced to explain why Bernie Sanders and his Brogressive disciples are wrong about the bank is frankly infuriating.

I prefer it when Democrats make evidence-based arguments, but Bernie Sanders has been a Democrat for about 5 minutes. Sanders has held elected office for several decades but didn't become a Democrat until he decided to use the party to run for the Democratic nomination. He has voted against many of the Democratic party's priorities. Bernie Sanders identified as an Independent from 1979 to 2015 and he has voted like one.

  • Scopedog

    In other words, Sanders would cut off workers’ noses to spite their faces.

    Sadly, that’s the case with some who declare that they are uber-progressives while accusing the rest of us of being shills or bots or sheeple or whatever the f*#! mean thing they can come up with.

  • Great post, Ashby. I had no idea what the Bank was until now. I wonder how the Berniebots will react? No, wait strike that. we KNOW how they will react.

    • JMAshby

      If you want to see how they react just look at my mentions on Twitter from last night. We have all the buzzwords: corporate welfare, corporate subsidies, crony capitalism, oligarchy.

      Those are real things but the Ex-Im Bank is not it.

  • muselet

    With those three sentences, Bernie Sanders showed he doesn’t understand the modern economy as well as he thinks he does. That’s not disqualifying, but it is disappointing.

    Unfortunately, there is now a group of potential voters who are more misinformed than they were before about the way the world economy works.

    The Sanders campaign may very well issue a clarification today explaining why—and how—he was wrong about the Ex-Im Bank, and I really hope that happens. November is going to be tough enough without the D nominee also having to fight a zombie lie about a successful institution that exists to help sell US-made products overseas.

    –alopecia

    • JMAshby

      The Sanders campaign does not have a habit of clarifying anything, they only ever double down.