Megan McArdle is cheering on the demise of the Export-Import Bank on the premise that it will be a blow against “corporate welfare.” There seems to be a bipartisan consensus growing that the Department of Commerce should just be eliminated and its responsibilities should either be shifted to other departments or simply done away with.
In early 2012, the Obama administration made a proposal along those lines, but they did not intend to eliminate the federal government’s role in promoting international trade or boosting U.S. exports. Quite the opposite, actually.
McArdle doesn’t think killing the Export-Import Bank will matter much one way or the other, but she likes the symbolism.
The economic impact of this agency is slight. Oh, its impact on specific companies can be large: Boeing will be hurt if the government declines to reauthorize Ex-Im, while domestic air carriers will probably benefit a bit because their foreign competition will no longer receive subsidies from the U.S. government. But overall, its demise would not have any effect large enough to notice, either on the federal government’s budget or on the U.S. economy. Exports will probably decline somewhat, but that will be offset by freeing up a similar sum for expenditure in other sectors. Overall, kind of a statistical yawn.
But if the economic impact is slight, the symbolic impact is huge: Conservatives are taking a run at a major dispenser of corporate subsidies, while Democrats have suddenly discovered a deep love of government-financed corporate expenditures. It just got a little bit harder to argue that Republicans are the party of big business.
On this issue, I’m with the symbolists. The government should not be directly subsidizing purchases of American goods, and no, I don’t care if all the other kids at the World Trade Organization get to do it.
It seems to me that there are bigger issues at play here than just the fate of the Export-Import Bank. The idea that the government should not promote commerce is novel, but it has support on both the right and the left. That doesn’t mean it is wise.