Calling opposition to the Export-Import Bank “Tea Party mischief,” the New York Times editorial board defended the bank in a piece published Tuesday. As usual, the editors portrayed the Tea Party as extreme, while the editors themselves offer the purest common sense shared by all reasonable people: “Most Republicans and the Chamber of Commerce and the National Association of Manufacturers support reauthorization, as do most Democrats and the A.F.L.-C.I.O. Congress should ignore the ridiculous arguments against the bank and reauthorize it.”
Think about that for a moment. The editors are saying that if both Big Business Republicans and Big Labor Democrats support a particular government subsidy, then it’s probably a great idea! The notion that these two groups somehow represent the sum total of the interests of the American people is, frankly, nonsense. The editors seem unable to grasp that a broad swath of taxpayers are opposed to crony capitalism, and that the Tea Party is a manifestation of that opposition — an attempt to unite citizens whose only “special interest” is that the government leave them alone.
Despite ridiculing the opposition, the editors offer only one argument in the bank’s favor, which is that everyone else is doing it:
In an ideal world, businesses would obtain such financing from privately owned banks. But most governments around the world support exports in similar ways, and if the United States dismantled the bank unilaterally, as some lawmakers are advocating, American companies could lose billions of dollars in overseas orders and decide to move their operations to other countries that provide generous export financing.
The textbook trade model in economics shows that export subsidies generally lower the prices paid by foreign importers and increase domestic prices for the same goods. That’s the reason Delta Airlines opposes the Ex-Im Bank — the airline is tired of paying inflated prices for airplanes that Boeing is subsidized to export. In general, the model indicates that export subsidies are welfare-reducing for the sending country but welfare-enhancing for the receiving country. That’s why retaliation usually makes no sense. If another country decides to hurt itself with export subsidies, that’s not a reason for the U.S. to voluntarily hurt itself, too. Maybe the Times editors think the economists who developed this trade model are all Tea Partiers in tricorn hats?
Of course, there could be geopolitical justifications for the Ex-Im Bank that go beyond textbook economics. But that’s a much different argument than “everyone else is doing it.” If the Times is going to continue to portray Big Business and Big Labor as the full expression of mainstream American politics, it will need some better arguments.