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?
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).
Both of you rein it in or you won’t enjoy what ensues.
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.
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 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).
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.
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
Application to healthcare economics and trade policy: Theory of the Second Best – Healthcare Economist
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”?
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 [/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.
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.
James Fallows 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: [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.
:rolleyes:
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?
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.)
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.
The phrase in french is that.
it means very pro markets in the french discourse. usually it is an insult, although I use it to be amused.
Exim bank charges a fee, some people think that fee should cover the cost of running the exim bank.
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.
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.
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.
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.