Alan Greenspan Weighs In Against Export-Import Bank

The former chairman of the Federal Reserve, Alan Greenspan, has said he opposes the renewal of the Export-Import bank whose charter was due to expire at the end of September.

In an interview with The Hill, Greenspan weighed in on the side of conservative lawmakers who believe the subsidies to American businesses in foreign countries are akin to "corporate welfare."

"As an economist, no," Greenspan told the Hill when asked whether he supported the bank's reauthorization.

"The Export-Import Bank is fundamentally a subsidy for American exporters," Greenspan said. "But the other question you have to ask is, 'Does international competition and global economic activity do better if no country subsidizes its exports?' My answer is yes."

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Supporters insist the 80-year-old agency is critical to job creation and U.S. economic competitiveness, and argue that without the support of the agency to extend credit and insure foreign exports, the country will lose out to its economic rivals which offer subsidies to their businesses.

Republicans on Wednesday voted to extend the bank's charter temporarily, giving it stopgap funding until next summer.

Greenspan noted that there may be political reasons why renewal makes sense, but did not believe there would be long-term economic costs to closing it.

"There is just no doubt that, from a political perspective, all that is visible is the immediate subsidy advantage," Greenspan said, suggesting that if he was a politician he would probably support its reauthorization.

"Foreign competition's response is never considered. In politics, it's the short term that regrettably sets policy, and that is what accounts for an overwhelming backing of the Export-Import Bank."

He said he believed international corporate subsidies ultimately undermined free market competition.

"If no country artificially boosted their exports, the global economy would function better," he said, according to The Hill. "In the end, it's a zero-sum game. To be sure, in the short run, those offered export subsidies gain an advantage until foreign competitors counter that subsidy."

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