The Corner


Bad Reporting from the Wall Street Journal on the Ex-Im Bank

(Kim Kyung-Hoon/Reuters)

Last week, I commented elsewhere that NPR had a sloppy piece of reporting on Hurricane Ida and climate. This week, it’s the Wall Street Journal that seems to confuse reporting with printing the talking points they get from government agencies. See for instance, this piece about president Biden’s pick for the top Export-Import Bank job.

My issue is with this section:

Conservative Republicans tried to quash the bank as unnecessary and successfully constrained its operations for part of the past decade by refusing to approve board members.

But Congress moved in late 2019 to revive the agency, after then-President Donald Trump changed his position on the agency and backed it as a way to compete with China.

In the past, the bank’s short-handedness meant it lacked a quorum needed to approve financing for deals of more than $10 million. Over nearly four years, approvals to support export deals totaling roughly $40 billion got held up and as much as $20 billion of additional deals may have shifted to countries where companies could obtain export assistance from credit agencies, according to people familiar with the bank’s deal pipeline in early 2020.

This is a typical talking point from the Ex-Im that is never followed by providing an actual list of the $20 billion and $40 billion deals that were delayed or lost to other countries. I am truly curious. Unlike the Ex-Im, I have done the work and actually looked at what happened during the four years when the bank didn’t have a quorum. The paper I wrote with Justin Leventhal can be found here. As those who bother to read it will see, exporters were doing well without the Ex-Im, even the biggest beneficiaries such as Boeing. (To the extent that Boeing has suffered in recent years, it is only because of its faulty airplanes.) Here is we wrote in an op-ed after the quorum was restored:

What about the frequent claim that without the Ex-Im Bank, foreign companies would turn to foreign goods subsidized by foreign governments? That argument also doesn’t stand up to examination. When Ex-Im was mostly out of commission, U.S. exports remained stable. In fact, prior to its 2019 struggles, Boeing continued business as usual with a higher stock value and larger revenues. In one telling example, even after Ex-Im guarantees on Boeing sales to El Al Israel Airlines were no longer available, El Al continued to run an all-Boeing fleet.

As a reminder, during the time that the Ex-Im was missing a quorum and could extend deals above $10 million, the U.S. was experiencing a decline in unemployment, higher wages, and rising economic growth in a way that many other industrialized countries weren’t. So are we really going to blindly believe that “$20 billion have fled the U.S”? Show us a list of the deals that fled the U.S., please.

Don’t get me wrong, I am sure it is easy to find companies that will say that they loved having their loans subsidized by the American taxpayers, and that they missed the perks when the Ex-Im was dormant. That’s a whole different thing than claiming that on net the U.S economy suffered. That would require us to believe that economic growth, trade, or even business decisions rest on the competition between government banks extending export subsidies to special-interest clients in higher-income nations where capital is easy to find.

These journalists could have also checked what deals were approved by the Ex-Im since the quorum was restored. Anyone who checks would notice that it’s been business as usual, including a return to the agency extending cheap loans to PEMEX, the state-owned and highly corrupt Mexican oil and gas company, but one of the Ex-Im’s favorite clients. (Incidentally, I am curious how this new chairman is going to feel about the Ex-Im’s undying relationship with PEMEX.)

The bottom line is that these journalists should have asked to see evidence of these claims rather than print whatever talking points the Ex-Im gave them. 


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