The Export-Import Bank debate ties into knots the reasoning of a certain type of liberal.
Many liberals who write on economics are happy to simply state the obvious: the federal government shouldn’t be in the business of subsidizing the country’s largest manufacturers with taxpayer-backed financing.
But Paul Krugman, the liberal economics blogger at the New York Times, seems to view the public discussion over economic policy as a big old war, in which the goal is to vanquish your enemies. Krugman attacks opponents instead of arguing with interlocutors. And he seems to be guided by the notion that those who generally advocate less government and who speak of free enterprise are the enemy, and they should be shamed, vilified and never supported. So when blogger Krugman writes on Ex-Im, he does so in a grouchy way, sneering at Tea Partiers, and making half-hearted arguments that are less defenses of Ex-Im and more like anti-anti-Ex-Im arguments.
In that Krugmanite tradition, we get this odd post at Wonkblog from liberal blogger Matt O’Brien.
O’Brien’s argument seems to be that Ex-Im shouldn’t really exist, but Republicans suck for not wanting it to exist, and we shouldn’t trust the people who want it dead.
O’Brien ties himself in knots and basically misleads the reader in order to make his muddled point. I address his odd points here, because you can expect many of the Krugmanite liberals to make these arguments this year as Democrats and K Street push to keep Ex-Im alive:
“Republicans have come up with something called ‘libertarian populism,'” O’Brien writes. This seems untrue to me. For the most part, libertarian populism came not from Republicans but from libertarianish journalists like Conn Carroll, Ben Domenech, and me. Much of the blogging, columnizing and speaking in favor of libertarian populism has been done in the context of criticizing Republicans. Republican lawmakers don’t talk about it and very few of them believe in it.
O’Brien later writes of Ex-Im, “In all, its subsidies are worth about $2 billion the next 10 years.” This is a very misleading way of describing Ex-Im’s size, considering that Ex-Im extends more than $20 billion a year in loans and guarantees and other subsidies. If Ex-Im were to survive a decade at its current rates, it would hand out a quarter-trillion dollars in subsidized financing. Currently, U.S. taxpayers are exposed to over $100 billion in Ex-Im’s financing.
But here’s O’Brien’s weirdest argument: “Getting rid of the ExIm Bank, in other words, might be a good idea, but it’s not a good use of Congress’ time.”
To set up this argument, O’Brien has to completely ignore the actual state of play.
Ex-Im’s charter ends this summer. To get rid of Ex-Im, all Congress has to do is not pass a bill reauthorizing the agency. The course of action favored by Ex-Im’s biggest foe, Financial Services Chairman Jeb Hensarling, is this:
Forget about Ex-Im. Let Financial Services deal with Fannie and Freddie, and maybe Too Big To Fail. Don’t waste time reauthorizing an agency that basically just subsidizes a handful of very big companies.
Acknowledging this true state of play would turn on its head the partisan angle of O’Brien’s post. If this is such an insignificant agency, as O’Brien argues, why did Obama dedicate an Oval Office address to fighting for it? Why were the Democrats threatening to shut down the government to save it? Are they that obedient to Boeing?
O’Brien’s blogpost ends with a good point: Republicans, with the time they save by not wasting legislative days on reauthorizing Ex-Im, should push legislation to roll back farm subsidies. If we ever convince a handful of Republicans to do that, let’s see how Krugman and O’Brien respond.
