The left’s case against Ex-Im
Efforts to finally kill the $140 billion federal boondoggle that is the Export-Import Bank — led by House Financial Services Committee Chairman Jeb Hensarling, R-Texas — are getting characterized in some quarters as another round of impractical, rabble-rousing tea party invective.
The truth is, just as the bank has more than its share of apologists within the Republican Party, some of its more eloquent critics actually come from the left.
Of course, those critics at one time included the president himself, who on the campaign trail in 2008 called Ex-Im “little more than a fund for corporate welfare.” Alas, Obama nonetheless signed a 2012 reauthorization bill and is now backing Senate Democrats like Mary Landrieu and Mark Warner as they try to make the bank’s pending reauthorization a campaign issue.
But some on the left still see clearly through the haze. Particularly noteworthy is today’s takedown — by Dean Baker of the Center for Economic and Policy Research — of an op-ed published in yesterday’s New York Times by former U.S. Sen. William Brock, R-Tenn. Not only does Brock pull out all the usual tired claims for Ex-Im reauthorization, but he even has the brass to invoke the ghost of Ronald Reagan:
The bank is not perfect. It could do more to increase efficiency and transparency, and to better leverage partnerships to reach even more small businesses. But as President Reagan understood, that is a reason to reform it, not end it. Opponents of the bank say that it supports just 2 percent of all exports. Still, 2 percent amounts to $37.4 billion of American products made by American workers in American plants. That translates into tens of thousands of jobs from every state in the country.
Baker does an effective job of fisking this claim, noting that ending the bank would not actually cause Boeing, which receives 30 percent of Ex-Im’s subsidies, to stop selling planes abroad :
For the most part this would be a story of lower profits, but there would be some reduction in exports, probably in the range of 10 to 30 percent of the amount being subsidized. That translates into $3.7 to $11.2 billion in exports that we would lose without the Ex-Im Bank.
Is that a big deal? We can compare this to another export number that has been in the news recently. A new study showed that because of the sanctions against Iran, the United States has lost $175.4 billion in exports since 1995, with the estimated losses coming to $15 billion in 2012, the latest year covered by the study. So the jobs at stake with the Ex-Im Bank are about 75 percent of the number that could be gained if we ended the sanctions against Iran. In other words, if we think the ending of loans from the Ex-Im Bank would be a hit to the economy, then we must think the sanctions to Iran are an even bigger hit.
Baker goes on to note that, if promoting exports were actually the policy goal, the clearest way to do that would be to devalue the dollar, most likely through a negotiated arrangement with those countries that have been bidding up its value. It turns out that option isn’t so popular, not only because it would raise the prices of imported goods that retailers like Wal-Mart have come to rely on, but also because it would “hurt major manufacturers like Boeing and GE who now do much of their manufacturing overseas,” Baker writes.
Time magazine’s Michael Grunwald — author of the decidedly non-tea party tome The New New Deal: The Hidden Story of Change in the Obama Era — lays out the progressive case against Ex-Im perhaps as well as anyone:
The fate of the Ex-Im Bank…will not affect the fate of the planet. It probably won’t even affect the fate of Boeing, which is perfectly capable of doing deals with Arab petro-states without government-guaranteed financing. So what’s the point of keeping it around and enduring its periodic scandals? Those of us who believe that government should do a lot of important things, like defend the nation and fight climate change and ensure universal health insurance, ought to recognize that government shouldn’t try to do everything. Opposing the Ex-Im doesn’t mean agreeing with the Tea Party notion that government shouldn’t try to do anything—just that it should stop trying to do this.
