We last looked at the subject of Export-Import Bank reauthorization in October 2011, and this column recommended against it. Last September, Congress voted to renew the charter (passed 319 to 108) until June 30, 2015, when the subject will reappear on the Congressional agenda.

You should read a report by Daniel Ikenson (No. 756 dated Sept. 10, 2014, Cato Policy Analysis, “The Export-Import Bank and its Victims”) for an in-depth understanding of why the Ex-Im Bank should be closed. What follows is some of the rationale and controversy.

Formed 80 years ago, Ex-Im (a U.S. government corporation) claims not to compete with private-sector lenders, providing financing only in transactions that would otherwise not occur due to political or commercial risks. Proponents claim that lending supports 290,000 export-related jobs. Last year Ex-Im was involved with 3,751 transactions aiding $42 billion in exports from 3,600 companies. Critics point to the fact that 65% of loan guarantees went to firms purchasing Boeing aircraft, and 82% of funding went to Boeing customers.

Actually, while claiming not to provide subsidies, Ex-Im exists only to offer business a better credit deal than exists in the marketplace with aggregate subsidies of 1% of amount borrowed, a condition providing a guaranteed U.S. taxpayer loss in funding transactions. Increasing criticism now focuses on use of lending for “green projects” ($10 million to now-bankrupt Solyndra in 2011), and environmentalists are disturbed by funding for all types of fossil-fuel projects.

The bottom line for readers is that benefits in increased exports and jobs are exaggerated and the costs are ignored. Ex-Im spending and subsidies inflict high costs on manufacturing in our nation, in 189 of 237 manufacturing sub-industries and all 21 categories of broad manufacturing industry, exacting a net cost of $2.8 billion annually. (Definitions are based on the North American Industry Classification System.)

The sub-industry sectors (makers of motor-vehicle bodies, computer storage devices and photographic equipment) bear the largest costs. Five broad manufacturing industries bearing the greatest costs are producers of electrical equipment, appliances, furniture, nonmetallic mineral products and chemicals – accounting for 50% of manufacturing GDP in seven states. The 10 largest victims account for over two-thirds of manufacturing GDP in 22 states. Ex-Im policies reward some companies but penalize many others, all while “unleveling” the playing field with a net loss on the U.S. economy.

Ex-Im financing helps two types of companies: U.S. firms whose export prices are subsidized by below-market-rate financing and foreign firms that purchase subsidized exports. These same transactions impose burdens on two different sets of firms: competing firms in the same industry and U.S. firms in downstream industries. So, Ex-Im financing reduces costs for the lucky U.S. exporter and reduces cost of capital for the foreign customer, but it hurts U.S. competitors of the U.S. exporter as well as U.S. competitors of the foreign customer. Remember that when a foreign producer buys steel on credit at subsidized interest rates, it has an advantage over competitors, including those in the U.S.

Furthermore, recognize that a U.S. steel-buying manufacturer loses because its foreign competition is being directly subsidized by American taxpayers. Other U.S. industries that consume steel are also adversely affected. It is important to observe that 45% of value of all U.S. economic output is consumed as inputs in the production of other industries, and 55% of manufacturing output is consumed as inputs of other industries’ production. Ignored costs of Ex-Im subsidies result in the fact that 189 of 236 non-aircraft U.S. manufacturing industries can correctly be classified as victims of this flawed banking process. There is no better example of government interventionist policies than Ex-Im processes, which produce a few winners and a multitude of losers.

All this leads to the obvious conclusion that you and your company should be aware of these matters and plan actions and positions to express to your elected federal legislators. Taking a unified position via association’s presentations to federal policymakers can help. Doing nothing does not help your own company, your customers, your country or our collective future.

It is essential to be involved with defining and creating the outcome of this issue that America needs. There is still plenty of time to contribute and make a difference.