# Why do we have the Export-Import Bank? **URL:** \ **Category:** Great Debates\ **Created:** [September 26, 2013, 3:44pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729 "2013-09-26T15:44:05Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [September 20, 2015, 8:05pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/21 "2015-09-20T20:05:49Z")
> [@Ramira](#): > > since I am of the 1960s generation. and I am holding graduate degrees in economics Oh so you were not exposed to free market economics in college, and never bothered to read Bastiat, because you were busy compiling millions of individual preferences into crude aggregates so your models could churn something out. You’re right, why bother? ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [September 20, 2015, 8:58pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/22 "2015-09-20T20:58:46Z")
Funny. In fact my economics was in the “ultra liberal” market tradition as we say in French, which in your americans terms means the hard free market orientation. Why you think it is impressive or useful to waive around the name Bastiat in relation to actual modern economics is puzzling mais voilà… it seems to be a fetish of a certian kind of political tendency. (as the bizarre attacks on econometric approach, it tells me that this is not economics you come from, but a purely political ideology, so much like the marxistes, a mirror in effect). ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [September 20, 2015, 9:12pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/23 "2015-09-20T21:12:46Z")
Both of you rein it in or you won’t enjoy what ensues. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 20, 2015, 10:14pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/24 "2015-09-20T22:14:43Z")
> [@D\_Anconia](#): > > It’s not obstructionism. The Republicans control both chambers of Congress. They are under no obligation, whatsoever, to back the President’s or the Democrats’, agendas. To paraphrase one Barack Obama, “they won.” It has not been voted down in Congress - it has been blocked by one representative- Jeb Hensarling. If it loses a vote that’s one thing - I doubt it will, given the strong support the Bank has always enjoyed. If one person blocking it is not obstructionism, I don’t know what is. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [September 20, 2015, 10:16pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/25 "2015-09-20T22:16:01Z")
> [@Jonathan\_Chance](#): > > One of the things that tends to be ignored here is the fact that Ex-Im is a lender of last resort due to its interest rate. This actually makes it a lender of FIRST resort. > > Each of the deals that the bank backs would be achievable elsewhere…they would just cost more through higher interest rates due to rational risk analysis on the part of the lender. Therefore why try when a firm can arrange a deal with Ex-Im at a more ‘reasonable’ rate? I trust there’s some of that going on. But government backed financing is qualitatively different than that backed by, say, Citibank. My concern is that yanking away financing this suddenly plausibly sounds like a bad thing. If you are correct though the phase-out should be easy: just ratchet up interest rate spreads at a deliberate pace. > [@](#): > > I’m not opposed to the bank at all. But I’d be a big fan of reviewing the results of both a risk analysis and a stress test. I’d bet both show that such are far more extreme than that allowed for ordinary commercial banks. I’m not even averse to shutting ExIm down entirely, after the proper sort of analysis, a full phase-out and a less vulnerable economic environment (eg Fed fund rates above 2% and heading upwards). ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [September 20, 2015, 10:35pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/26 "2015-09-20T22:35:01Z")
ETA, previous post: I can imagine myself having greater enthusiasm for shutting ExIm down quickly if I thought that it was costly, in a risk adjusted sense. But it isn’t, or so the current evidence indicates. So we have the luxury of going slow, even glacial. This just isn’t a big problem, in terms of numbers. > [@Ramira](#): > > Funny. In fact my economics was in the “ultra liberal” market tradition as we say in French, which in your americans terms means the hard free market orientation. Why you think it is impressive or useful to waive around the name Bastiat in relation to actual modern economics is puzzling mais voilà… it seems to be a fetish of a certian kind of political tendency. (as the bizarre attacks on econometric approach, it tells me that this is not economics you come from, but a purely political ideology, so much like the marxistes, a mirror in effect). Not to wade too deeply into this, but if **WillFarnaby** opposes the econometric approach, that places him outside of the mainstream of US economic thought. Such characters exist. But they are not mainstream. I can’t and shouldn’t substantiate this claim though without first referencing WillFarnaby’s critique. Those who are interested in Ramira’s claims regarding governmental intervention and modern attitudes towards the same could try googling the “Theory of the Second Best”. Theory: [Theory of the second best - Wikipedia](https://en.wikipedia.org/wiki/Theory_of_the_second_best) Application to healthcare economics and trade policy: [Theory of the Second Best – Healthcare Economist](http://healthcare-economist.com/2007/08/29/theory-of-the-second-best/) Ramira: “Ultra-liberal” has a somewhat comical tone in English. The term was coined by unhinged Republicans running attack ads against moderate Democrats in conservative districts. It amuses me to apply the term to myself. It isn’t common in American English or normal conversation. I understand that “Liberal” in Euro-speak means being friendly to markets and economic textbooks that are skeptical about governmental involvement in the economy. To the right of labor parties. But out of idle curiosity, what’s the phrase in French that you have in mind for “Ultra-liberal”? ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [September 21, 2015, 12:00am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/27 "2015-09-21T00:00:32Z")
> [@Voyager](#): > > It has not been voted down in Congress - it has been blocked by one representative- Jeb Hensarling. Cite, please. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [September 21, 2015, 1:08am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/28 "2015-09-21T01:08:14Z")
> [@D\_Anconia](#): > > Cite, please. I’m not sure about Voyager’s characterization, but here’s a cite, emphasis added: [INDENT][INDENT]Texas and South Carolina are home to leading opponents of the bank, including Senator Ted Cruz of Texas, a Tea Party favorite and Republican presidential candidate;\*\* Representative Jeb Hensarling of Texas, who, as chairman of the House Financial Services Committee, has defied Speaker John A. Boehner \*\*and refused to bring any bank bill to a vote in his panel; and Representative Mick Mulvaney of South Carolina, a leader among conservatives in the House. [http://www.nytimes.com/2015/09/16/business/economy/export-import-bank-general-electric-boeing.html](http://www.nytimes.com/2015/09/16/business/economy/export-import-bank-general-electric-boeing.html) [/INDENT][/INDENT] It may or may not also be true that Boehner has refused to apply copious pressure to Hensarling. At any rate, I interpret this as GOP indifference to the strength of the US economy: you can oppose the Import-Export bank while understanding that importance of not abruptly destroying business deals in process. There’s an easy way to phase it out: you just slowly ramp up the interest rate spreads over time. Tea Party conservatives apparently have no interest in that. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [September 21, 2015, 3:33am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/29 "2015-09-21T03:33:22Z")
The argument that the Republican Congress is “obstructing” is nonsense. It presupposes that there is some obligation to continue the status quo. Congress created the bank, and they are free to amend the law, repeal it, defund it, or, for that matter, expand it. None of those choices are obstruction. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [September 21, 2015, 4:05am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/30 "2015-09-21T04:05:18Z")
[James Fallows](http://www.theatlantic.com/notes/2015/09/how-idiocracy-hurts-exim-bank-edition/406231/) thinks that eliminating the ExIm program is nuts: [INDENT][INDENT]The anti-ExIm argument was that big, rich companies like Boeing or GE should not depend on taxpayer help for financing their sales to customers overseas. That might sound true enough, within the confines of the 11th-grade Ayn Rand Debating Club. In the actual world we inhabit, those firms are competing with others from Europe, China, Japan, Brazil, Russia, South Korea, etc. From places, that is, where government officials dozed through (or laughed at) the Ayn Rand part of the economics courses and are happy to promote their own exporters. The results? Here’s one… [/INDENT][/INDENT] He then details the big trade deals lost by the US as a result of this decision. [To summarize](http://www.theatlantic.com/notes/2015/09/no-one-likes-my-exim-bank-diatribe/406312/): [INDENT][INDENT]I think it would be a big, pointless, self-inflicted, and self-indulgent policy error to kill off the ExIm Bank. [/INDENT][/INDENT] The Republicans. Bad for business. Bad for America. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [September 21, 2015, 4:10am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/31 "2015-09-21T04:10:50Z")
> [@Measure\_for\_Measure](#): > > The Republicans. Bad for business. Bad for America. :rolleyes: ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [September 21, 2015, 4:41am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/32 "2015-09-21T04:41:04Z")
> [@D\_Anconia](#): > > The argument that the Republican Congress is “obstructing” is nonsense. It presupposes that there is some obligation to continue the status quo. Congress created the bank, and they are free to amend the law, repeal it, defund it, or, for that matter, expand it. None of those choices are obstruction. None of those choices, however, accurately reflect what is happening. There’s no bill to amend it, no bill to repeal it, no bill to defund it, and no bill to expand it presently up for a vote. The Republican chair of the relevant committee is refusing to bring _any_ bill to a vote. That means nobody gets to vote to amend, repeal, defund, expand, or maintain. Nobody gets to vote at all. ISTM that the problem is that Hensarling suspects the ExIm has a lot of supporters, and if he actually allowed a vote to reauthorize, the vote would not go his way. To avoid defeat, he’s simply going to prevent the vote, denying anybody the opportunity to say yea or nay. How is refusing to have a vote not obstructionism? ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [September 21, 2015, 4:53am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/33 "2015-09-21T04:53:11Z")
> [@slash2k](#): > > How is refusing to have a vote not obstructionism? Because they’re not required to have a vote on anything. They control what votes take place, as befitting their status as the Majority. OTOH, Harry Reid, et al, refusing to allow a vote on the Iran nuclear deal IS obstruction, IMO. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [September 21, 2015, 5:18am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/34 "2015-09-21T05:18:28Z")
> [@D\_Anconia](#): > > Because they’re not required to have a vote on anything. They control what votes take place, as befitting their status as the Majority. > > OTOH, Harry Reid, et al, refusing to allow a vote on the Iran nuclear deal IS obstruction, IMO. Who is ‘they’? Boehner, the elected leader of the majority, wants a vote. A number of members of that majority want a vote. ONE MAN says “thou shalt not have a vote.” (And I seem to recall several votes on the Iran deal. The last gasp effort, an amendment requiring Iran to recognize Israel and release American hostages/prisoners before sanctions were lifted, failed last Thursday by seven votes.) ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [September 21, 2015, 6:36am UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/35 "2015-09-21T06:36:01Z")
> [@Measure\_for\_Measure](#): > > Not to wade too deeply into this, but if **WillFarnaby** opposes the econometric approach, that places him outside of the mainstream of US economic thought. Such characters exist. But they are not mainstream. there is no place in the world of actual economics internationally for persons who are against the use of the econometric tools. The questionning of a model, this is of course one thing and useful. what happens in america, I don’t know. It is is simply bizarre to find the use of a french pollitical thinker of the first half of the 19e century used as a flag in such a conversation. It is not different than seeing the ideological mirror use the name Marx in that fashion. It tells you that yo uare not in a discussion of the modern economics, but of a hard ideological political conversation. > [@](#): > > Ramira: “Ultra-liberal” has a somewhat comical tone in English. The term was coined by unhinged Republicans running attack ads against moderate Democrats in conservative districts. It amuses me to apply the term to myself. It isn’t common in American English or normal conversation. The phrase in french is that. > **[Ultralibéralisme](https://fr.wikipedia.org/wiki/Ultralib%C3%A9ralisme)** > > Le terme « ultralibéralisme » (ou ultra-libéralisme), principalement employé en France, désigne une doctrine prônant un libéralisme jugé excessif. > Ce terme, pouvant logiquement désigner le libertarianisme et en particulier l'anarcho-capitalisme, suscite la polémique, car il est souvent utilisé comme slogan politique pour désigner de manière péjorative le libéralisme, même très modéré (social-libéralisme), lorsqu'il prône une déréglementation de certains marchés et la réduction des privilèges de ... it means very pro markets in the french discourse. usually it is an insult, although I use it to be amused. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [September 21, 2015, 6:14pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/36 "2015-09-21T18:14:28Z")
> [@PhillyGuy](#): > > How much would this increase the deficit? > > According to the accounting used by opponents, the cost of the Ex-Im is [$200 million a year](http://economics21.org/commentary/critics-export-import-bank-have-new-weapon-their-disposal-fair-value-accounting)\*. Texas spends $20 billion a year – _100_ times that – to grab jobs away from other states. And Republican states love that stuff: > As least when the jobs move within the KC metro area, workers aren’t harmed the way they are when Texas grabs a Pennsylvania job (or, less likely, visa versa). > > During the GW Bush administration, [Ex-Im Bank reauthorizations](http://dailysignal.com/2015/06/15/history-lesson-opposition-to-export-import-bank-has-grown-over-time/) commonly passed overwhelming, sometimes by unanimous consent. So what happened? Did the GOP suddenly become opposed to deficit-reducing corporate welfare? Don’t think so. Instead, it seems more like something where if Obama is for it, they are against it. > > There are sincere free market absolutists who, caring nothing about the political considerations, are against the Ex-Im Banks, and all the equivalents around the world, on principle, [like this guy](https://rwer.wordpress.com/2015/07/30/what-the-export-import-bank-debate-tells-us-about-economists/): > > So most economists are for it, but lets ignore them because they are corrupt. Really? > > * * * > > - Other anti-bank links mention [$2 billion](http://dailycaller.com/2014/05/30/the-export-import-banks-dodgy-accounting/), but if you look at it carefully, you see that is the same $200 million taken out over ten years. Exim bank charges a fee, some people think that fee should cover the cost of running the exim bank. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [September 21, 2015, 6:54pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/37 "2015-09-21T18:54:50Z")
> [@Ramira](#): > > It is is simply bizarre to find the use of a french pollitical thinker of the first half of the 19e century used as a flag in such a conversation. It is not different than seeing the ideological mirror use the name Marx in that fashion. It tells you that yo uare not in a discussion of the modern economics, but of a hard ideological political conversation. I would have thought that you would have figured that out about **WillFarnaby** by now. He doesn’t care about economic performance. He wants the government out of the market on principle alone. I gather (though I can’t be certain about this part) that he thinks foreign governments’ subsidies will eventually wither away because not subsidizing anything will make America an unstoppable capitalist paradise. Needless to say, most of us disagree. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [September 21, 2015, 7:21pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/38 "2015-09-21T19:21:53Z")
> [@Damuri\_Ajashi](#): > > Exim bank charges a fee, some people think that fee should cover the cost of running the exim bank. It does. a quick reading shows that it, like most of such Exim banks, it is profitable operationally. the cost being advanced is an implicit one based on in the linked criticism the factoring under the “fair value” rules that account for an estimated market risk. whether the calculations are correct, it is worth noting that the fair value standard much promoted by american standard setters for the financial sectors has come under criticism in the past decade. as the institution has existed since the 1940s I think, the historical track record may say more than market risk modeling if the standard of the underwriting has not greatly changed. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 21, 2015, 7:24pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/39 "2015-09-21T19:24:12Z")
> [@D\_Anconia](#): > > Because they’re not required to have a vote on anything. They control what votes take place, as befitting their status as the Majority. > > OTOH, Harry Reid, et al, refusing to allow a vote on the Iran nuclear deal IS obstruction, IMO. Harry Reid is not the majority leader. Now, if you are objecting to the use of the super majority in the Senate, I hope you also objected when Dems were in the majority. Even so, if one person blocking a bill is not obstructionism, then I want to know what is from a Republican. BTW you used a :rolleyes: at the notion that Republicans are bad for business. I suggest you check out the state of the market during Democratic vs Republican administrations. As an investor I sure as hell prefer Obama to Bush - though Mr. Bush did allow me to buy lots of stock cheap. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [September 21, 2015, 9:42pm UTC](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729/40 "2015-09-21T21:42:23Z")
> [@Really\_Not\_All\_That\_Bright](#): > > I would have thought that you would have figured that out about **WillFarnaby** by now. He doesn’t care about economic performance. He wants the government out of the market on principle alone. I gather (though I can’t be certain about this part) that he thinks foreign governments’ subsidies will eventually wither away because not subsidizing anything will make America an unstoppable capitalist paradise. > > Needless to say, most of us disagree. If a foreign government subsidizes its countries exports, great. American consumers are better off at the expense of the foreign taxpayers. It has nothing to do with “withering away”, if Mexico wants to sell me cheap subsidized cars from now until I die, I’m ok with that. If the United States never produces a single car again for the rest of my life, I’m ok with that. I’m ok with the division of labor as it pertains to interfamily trade, interpersonal trade, interstate trade, and international trade. What is wrongheaded to begin with, as is always with discussion of trade, is the idea that increasing exports should be a goal of government. In the long run imports and exports are equal. Nothing much more than that is necessary to say. [Previous page](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729.md?page=1) [Next page](https://boards.straightdope.com/t/why-do-we-have-the-export-import-bank/669729.md?page=3)