The New York Times editors again call for re-authorizing the Export-Import Bank, and again their chief reason is their disdain for tea partiers. The editors say the bank is an “obsession” of “Tea Party ideologues” and “a convenient scapegoat for Tea Party lawmakers” who will hurt the economy just to prove their conservative bona fides.
It’s all so backward. Ex-Im critics are actually supported by the textbook trade model, which — as far as I know — was not developed by nascent tea-party kooks. The model indicates that export subsidies generally hurt the exporting country while benefiting the importing country. Export subsidies do enrich domestic businesses, but at the typically greater expense of domestic consumers and taxpayers. That’s the definition of corporate welfare.
Of course, there will always be special cases and assumptions that might lead to a different conclusion, but the Times has not raised any. In fact, it’s difficult to find an economist who argues that the standard model should not apply to Ex-Im. Even Jared Bernstein, whose views are normally in line with the Democratic party’s, has suggested a phase-out of the bank. Barack Obama himself called Ex-Im “little more than a fund for corporate welfare” before he became president and inexplicably changed his mind.
It’s disturbing how a media narrative can so effectively turn reality on its head. In the Times’ world, people referencing standard economics are “ideologues,” while supporters of corporate welfare are “sensible” and “bipartisan.” It should make us wonder which other media narratives are inversions of the truth.