General Electric closed an appliance factory in Bloomington, Indiana, last year. The most luxurious of the GE refrigerators Hoosiers used to make there are now made in Mexico, and have been for many years. GE’s factory complex in Mexico was subsidized years ago by the U.S. Export-Import Bank, a federal agency.

You could say that Mexico built a factory and made the U.S. pay for it.

President Trump, during the primary, said that he agreed with conservatives that Ex-Im, which extends taxpayer-backed financing to foreign companies and governments that buy U.S. goods, should be abolished.

Last week, however, Sen. Heidi Heitkamp, D-N.D., a champion of Ex-Im, emerged from a White House meeting declaring that Trump was now an Ex-Im supporter, and that he would push Congress to fill out the agency’s board, thus empowering Ex-Im to approve subsidized deals of greater than $10 million.

This would be a mistake. Trump ran promising to drain the swamp. Ex-Im is the swamp. Touted as a way to help the small businessman or factory worker, it instead serves primarily to enrich foreign companies and Beltway insiders, while harming the rest of the economy.

Ex-Im doesn’t create jobs or boost the economy. “Subsidized export financing,” the Congressional Research Service explained, “merely shifts production among sectors within the economy, rather than adding to the overall level of economic activity, and subsidizes foreign consumption at the expense of the domestic economy.”

That last part is key. Ex-Im only indirectly subsidizes U.S. manufacturers. The direct recipient of Ex-Im aid—especially the large loans and loan guarantees that a full board would approve—is always a foreign company.

The company that receives the most subsidized financing from Ex-Im is Pemex, Mexico’s national oil company. (In 2014, Veronique de Rugy of the Mercatus Center found more than $7 billion in Ex-Im financing to Pemex since 2006.) For instance, Ex-Im in 2015 extended a $1.3 billion loan guarantee to subsidize Pemex’s drilling rigs.

In the GE deal, Ex-Im subsidized a GE joint venture with a Mexican company, building a new refrigerator plant in Mexico. The factory would use some U.S.-made equipment, and so Ex-Im provided taxpayer-backed financing to the Mexican GE venture. This new factory allowed GE to lay off hundreds in Bloomington in favor of cheaper Mexican workers.

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Ex-Im’s primary activity is subsidizing foreign airlines—this is 40 percent of Ex-Im financing in the average year. Those foreign airlines compete with airlines here in the U.S., including Delta, who recently canceled a route to India. Delta couldn’t compete with Air India, which was getting Ex-Im subsidies for its Boeing jets.

Other U.S. victims include the American companies that compete with the subsidized U.S. exporters, or companies that don’t get a bank loan, because the bank chose a foreign buyer who had an Ex-Im guarantee.

The unambiguous winner when Ex-Im steps in is the foreign country that does the buying.

Subsidizing foreign companies—including those that compete with U.S. companies and foreign subsidiaries of U.S. companies moving jobs overseas—doesn’t count as putting America First. It does count as putting Beltway insiders first.

Ex-Im has its own swamp-like ecosystem of revolving-door operatives. Hillary Clinton’s gang and Barack Obama’s crew loved Ex-Im, because it gave the insiders a chance to get rich.

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For instance, Obama’s golf buddy, banker Robert Wolf, used his connections to launch a consulting firm called 32 Advisors. One thing 32 Advisors did was help companies get Ex-Im financing. At the same time, the firm’s principals publicly lobbied for Congress to extend Ex-Im’s charter.

One of 32 Advisors’ big hires was Ex-Im Vice President Kevin Varney, who was also a Clinton administration alumnus. Varney settled on 32 Advisors after a deal fell through for him to run a trade-finance operation out of Teneo, the Clinton-connected consultancy founded by Doug Band.

All of these people—Varney, Band, Wolf, and dozens like them—make money when government gets more entangled in industry. So Ex-Im isn’t merely about subsidizing Air China and Boeing, it’s a way to enrich the insiders who use their government experience to set up shop as middle-men.

There’s no way to drain the swamp while propping up agencies like Ex-Im.

Ex-Im currently lacks a quorum on its board. This prevents the agency from approving deals larger than $10 million. That’s fine. If Trump is won over by the arguments from the likes of Heitkamp—that small businesses need Ex-Im in order to export—he could push legislation making the current $10 million cap permanent.

But curbing Ex-Im in this way wouldn’t please the agency’s biggest exporters, like Boeing and GE, or the swamp creatures who get rich off the game. Downsizing Ex-Im—and eventually killing it—would also be a blow to Mexico’s government, which appreciates it when the U.S. taxpayers finance their oil rigs and factories.

Timothy P. Carney, the Washington Examiner’s senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Tuesday and Thursday nights on washingtonexaminer.com.

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