Reporter's Notebook

Defunding the ExIm Bank
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Below are all the Atlantic notes, primarily from James Fallows, on the U.S. Congressional battle over defunding the Export-Import Bank.

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You Want Substance About the ExIm Bank? You've Got It!

Want to read more about international trade in big-ticket items like commercial aircraft? Here’s a place to start!

Thanks to the Atlantic’s new-ish Thread feature in this Notes section, I think you will see the previous items in this ExIm discussion grouped along with this one. Just in case you don’t, here’s the precis: No. 1 is “Idiocracy: It’s Not Just a Movie Any More”; No. 2 is “When Is It Fair to Call a Policy Position Idiotic?”; No. 3 is “Another Thing to Blame the Boomers For?”; and No. 4 is “Complex Facts and Intense Feelings.”

By the way, about No. 4: only one reader ever figured out the actual identity of “the Atlas Shrugged guy” whose writings I quoted extensively back during the 2012 election cycle and who now lives in Alabama (and who never carried out his threat to close his company if Obama got a second term). But yesterday three people immediately wrote to say that they had figured out the real name and location of the profanity-bound West Point grad I quoted recently, prompting me to further vague-up the description of him in the post.

Two reader messages this time. The first is from an ExIm bank critic. He thinks, incorrectly in my view, that there has been no discussion of the substance of how the bank works. But let’s hear some specific criticisms from him:

If you’re joining us late, there turns out to be an impressively passionate range of views on the future of the Export-Import Bank. For background reading: No. 1 in the series is “Idiocracy: It’s Not Just a Movie Any More,” my initial broadside against the effort to defund the bank; No. 2 is “When Is It Fair to Call a Policy Position Idiotic?,” a response from readers flustered by No. 1’s harsh tone; and No. 3 is “Another Thing to Blame the Boomers For?” which is self-explanatory.

This next installment is meant to represent the range of incoming sentiment. We begin with someone in the insurance business, who addresses the point of whether ExIm is for giant corporations only:

This reader appreciates your use of the cautionary Mike Judge film to call out the anti-Ex-Im Bank extremists.

My company brokers over 500 Ex-Im Bank export credit insurance policies, more than any other insurance broker in the country. Most of our trade finance business is underwritten in the private sector, but small business exporters find the support they need only at Ex-Im Bank.

Walter Lippmann would have had thoughts on ExIm mess. (Wikipedia)

Here’s the background: No. 1 is “Idiocracy: It’s Not Just a Movie Any More,” an initial broadside against the Tea Party-ites who (fanatically and destructively, in my view) have managed to defund the Export-Import Bank. No. 2 is “When Is It Fair to Call a Policy Position Idiotic?,” a response from readers flustered by No. 1’s harsh tone.

Now several readers with a different angle—namely, that we’re seeing another front in the Boomers-against-the-world generational struggle. Let’s start with this one:

[The original] Ex-Im bank piece made perfect sense to me.  I’ve been in international trade the last 10 years or so.  You are completely correct regarding both mercantilist policies and the idiocy of some of the right-wing blather about them.

I wonder, is this more an overall generational issue than anything else?  Specifically, I think these policies may be an effort on the part of Baby Boomers to get theirs while the getting is still good, meaning while they are young enough to benefit from policies but old enough that the bill will effectively not come due during their lives.

Fred Hochberg, CEO of the now-defunded ExIm Bank (ExIm photo)

Last night I wrote an impolite item arguing something I actually believe: that the Tea Party-led effort to defund the Export-Import Bank represented the destructive triumph of ideological posturing over real-world effectiveness.

Summary version of the case: Sure, in principle, big, rich companies like Boeing, GE, and Caterpillar “shouldn’t” ever have to rely on taxpayer subsidy. Also, government support can bring gross corruption at worst and market distortion at best; and the public costs of mercantilist policies often outweigh the public benefits.

Those are the principles, which I recognize well enough from my economics courses.

But the principles are a poor match for real-world complications.

Because I have been wrapped up in print-magazine obligations (check your mailbox in one month, and subscribe in the meantime, including for our great new issue), I didn’t stop to mention the idiotic Congressional effort to defund the Export-Import bank while that debate was underway.

The anti-ExIm push has succeeded for now, and the results of this self-inflicted folly are starting to come in. The GOP/TeaParty case against ExIm was that it was another case of big government over-reach, and crony capitalism as well. As one of the Koch brothers-originated lobbying groups working against the bank piously puts it:

FreedomWorks explains it to us

Let’s not stop to marvel at this spectacle: an industrial combine whose mining, pipeline, refinery, and other operations have been intimately connected with, and frequently protected by, government policies, inveighing against the crony-capitalist state.

Instead let’s look at the results.