President Obama, picking up where President Bush left off, is quietly expanding the federal government’s role as the financier of America’s economy.
A top Obama export official told reporters recently that the administration is preparing “a paper” to lay out when the U.S. government can use export-subsidy programs to promote even domestic sales.
Obama plans to use the Export-Import Bank — a federal agency that gives taxpayer-backed loans and loan guarantees to foreign buyers who buy American goods — to subsidize U.S. manufacturers even when they are selling to other American companies.
This would be a significant step in the federal government’s transformation into a venture capital firm and investment bank involved in all corners of the economy. It’s private profit and public risk. Conservative Sen. Jim DeMint calls it “venture socialism.”
Ex-Im has been financing exports for decades. Taxpayer-backed loan guarantees push down interest rates for foreign buyers, thus greasing the wheels for U.S. manufacturers and eliminating risk for U.S. banks.