Fragments about the Export-Import Bank

by on July 3, 2014 at 1:24 pm in Current Affairs, Economics | Permalink

…the data shows that less than one-third of the Bank’s FY 2013 portfolio goes towards the stated goal of “meet[ing] competition from a foreign, officially sponsored export credit agency.”

That is from Veronique DeRugy, there is more here.

prior_approval July 3, 2014 at 2:15 pm

‘There Are Better Ways to Help US Exporters Compete Abroad Than the Ex-Im Bank’

Well, sure – but a weaker dollar, Dean Baker’s long running export improvement policy suggestion, seems to always remain off the table. Though only a cynic would suggest that the bill for importing 7 million b/d of oil has anything at all to do with the American political establishment’s reluctance to follow economic orthodoxy regarding improving its exports in face of a long running trade deficit.

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mofo. July 3, 2014 at 3:37 pm

Weakening the dollar seems to me to be just another form of corporate welfare wherein the buying power of people’s money is lessened so that exporters might benefit from it.

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dirk July 3, 2014 at 3:46 pm

Maybe we should end the ban on exporting oil, no?

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Dismalist July 3, 2014 at 6:53 pm

A country will have a trade deficit whenever Savings < Investment. The existence of trade deficits just shows that the international monetary system is working.

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prior_approval July 4, 2014 at 12:51 am

We import over 7 million barrels a day. First, we need to stop importing oil before we can even start talking about exporting oil.

The U.S. has been a net importer of oil since the late 1940s – we need to produce more oil than we consume to become an exporter. It’s what comes out of the pipeline that counts, after all, not fantasies of becoming a bigger producer than Saudi Arabia. Which we were, actually, back in the 1970s, when the U.S. was the world’s largest producer of petroleum – and also the world’s largest importer of petroleum. You can only be considered an exporter when net production is higher than net consumption – something that post WWII America has never managed, by the way.

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Spencer July 4, 2014 at 1:13 pm

According to the Census data on real trade, the US exports of Petroleum — refined and unrefined — is now equal to 47.5% of US petroleum imports. That is up from under 10% in 2006.

How do you propose eliminating oil imports and please also explain how your policies would agree with your libertarian principles.

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dirk July 4, 2014 at 3:34 pm

“First, we need to stop importing oil before we can even start talking about exporting oil.”

I suppose that logic might appeal to a ten-year-old.

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dirk July 4, 2014 at 3:53 pm

Sorry for the snotty response.

I’ll mention that there are different grades of oil and we have a limited capacity to refine each grade. It makes economic sense to export the oil we can produce but for which we have no ready refinery.

docs.google.com July 3, 2014 at 4:04 pm

Right away I am ready to do my breakfast, afterward having my beeakfast coming again to read
oher news.

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Jan July 3, 2014 at 4:33 pm

GMU staff tend to suffer from mood affiliation when it comes to assessing government agencies. And you can guess which way the affiliation points. Nearly every time.

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JWatts July 3, 2014 at 4:45 pm

Are you arguing that she’s wrong or just making an ad hominem attack?

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Jan July 3, 2014 at 5:00 pm

No, it’s a simple observation of rampant mood affiliation.

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Sam July 3, 2014 at 5:47 pm

Imply that Tyler is being a mood follower as opposed to originator.

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KLO July 3, 2014 at 5:48 pm

I think she lost all credibility when she argued that corporate tax reform would benefit literally every single business. Really? Does any serious person believe this?

Also, does any serious person believe that the marginal tax rate tells us much of anything about the extent to which a tax is “stifling”? Quite a few corporations win under the current system, and they have, and will continue to, lobby to prevent any changes to the status quo. Any “reform” could very well make a lot of businesses worse off, because these business care about how much they pay in taxes and when they pay those taxes and not much about what the marginal rate is. Sophists care about marginal rates.

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Bill July 3, 2014 at 7:45 pm

I believe corporate tax reform would benefit every business, along with Jan. Think in terms of efficiency….a small firm with no foreign tax shelter competing with a multinational with foreign shelters. A more even tax playing field exposes the most efficient.

mofo. July 3, 2014 at 8:31 pm

“I think she lost all credibility when she argued that corporate tax reform would benefit literally every single business. Really? Does any serious person believe this?”

That is an exceedingly nit-picky complaint. Its clear from the context that she means that whereas the Ex-Im bank only helps a select few politically connected exporting corps, corporate tax reform would help both exporting and non-exporting corps irrespective of their political power. Only a pedant would translate that to mean “literally every single business”

Cliff July 3, 2014 at 11:29 pm

Bill, you are agreeing with Veronique de Rugy then, not Jan.

Bill July 4, 2014 at 6:39 am

Cliff, I don’t care who I am agreeing with…so long as the agreement is limited to corporate tax reform which places all corps…big and small…on equal footing. I am disagreeing with the proposition that it doesn’t matter.

Jan July 4, 2014 at 2:26 pm

Chip. No, you misrepresent my view on this.

prior_approval July 4, 2014 at 1:00 am

‘GMU staff’

Veronique de Rugy has nothing to do with GMU, as she is a senior research fellow at the Mercatus Center. That you may be unaware of this is not surprising. The Mercatus Center is technically located on property owned by the Commonwealth of Virginia, but ‘The Mercatus Center does not receive financial support from George Mason University or any federal, state, or local government.’

As Prof. Cowen is the chairman and general director of the Mercatus Center, it is unsurprising that he highlights policy debate contributions from people who are in no way, shape, or form actual academics at George Mason University.

Though to use the wonderful formulation found throughout the Mercatus Center’s web site, it is likely accurate to say that Veronique de Rugy has an office ‘at’ GMU.

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dearieme July 3, 2014 at 4:46 pm

The data show.

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Dan July 3, 2014 at 8:16 pm

Wrong.

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ricardo July 3, 2014 at 8:27 pm

Wrong.

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Dan July 3, 2014 at 8:42 pm

English is not Latin.

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Jan July 3, 2014 at 5:26 pm
JWatts July 3, 2014 at 6:13 pm

“The Ex-Im is, as Senator Barack Obama said during his presidential campaign, “little more than a fund for corporate welfare.””

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Jan July 3, 2014 at 6:30 pm

That quote isn’t from the article I linked, though I guess you just wanted to make sure Obama is in here somewhere. It’s not exactly news that Obama said that in the campaign and then reauthorized it in a few years later. And just to remind readers, this all happened in 2012. The hypocrisy red card was thrown then and it surely will be again if it is reauthorized. That is why this is all idiotic.

In six short years, the bank had gone from a Democratic target, to a quixotic libertarian target, to a political loser. The Chamber of Commerce was already watching immigration reform flail, thwarted by a Republican House it had helped elect. Now it is having to fight for Ex-Im?

“We at the [Koch-funded] Club [for Growth] think the small things matter,” says Chris Chocola [whose company previously benefitted from Ex-Im financing]. “If you can’t accomplish the small things, you’re never going to accomplish the big things.”

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mofo. July 3, 2014 at 8:17 pm

So, no need for any logical consistency or principles or anything like that so long as you can blame the brothers Koch, amirite?

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Jan July 3, 2014 at 8:27 pm

Incorrect. The connections here are strong and consistent. People need to understand the source of the sudden groundswell of enthusiasm. It did not appear out of thin air. And it includes commentary by those affiliated with the Mercatus Center.

Jan July 3, 2014 at 8:30 pm

I personally appreciate some of the Bros’ positions. For example, they gave $ to the ACLU to fight the PATRIOT Act. Good on ‘em.

mofo. July 3, 2014 at 8:37 pm

Even if, as you imagine, the current drive to dismantle the Ex-Im Bank is solely from the brothers Koch, who cares? A good idea is a good idea no matter who backs it. Youve said literally nothing about the merits, or lack thereof, of getting rid of the Ex-Im Bank, alls you have done is well poisoning.

Jan July 3, 2014 at 9:03 pm

Oh, did I appear to be debating the idea? I don’t actually care either way. Let’s just not pretend that the politicians are debating it on the merits. It is purely about serving donor masters and scoring political points.

Chip July 3, 2014 at 11:33 pm

So if the Kochs give money to a cause opposed to the ExIm that’s the key to the entire argument – cue scary conspiracy story and Harry Reid spasms – but if they support the ACLU, gay marriage, revoking drug laws etc that’s just incidental, and they are bit players in a greater cause.

And to think you kicked off your comments with a sneer about mood affiliation and then shortly after launched into Koch Conspiracy Mode.

Do you hear yourself?

Jan July 4, 2014 at 2:25 pm

No, that’s NOT the key issue, Chip. What I am pointing out is one the major reasons some politicians absurdly and arbitrarily flip-flop on this topic. If you want to cue scary Harry Reid music that’s fine, but reread my comment above and you’ll see I am not advocating any particular position on this.

And yes, the mood affiliation lead is exactly what got me thinking about this. Right now Koch-funded groups and some others who lobby hard in DC and bring big money to candidates are fighting the Bank reauthorization. And yes, Kochs are also closely linked to Mercatus (chairman) and and GMU.

Do you follow me now? Follow the money.

mofo. July 5, 2014 at 11:39 am

Oh please, we already have a resident troll who reliably flogs that animal carcass.

Jan July 5, 2014 at 11:58 am

He didn’t flog it on this issue for this day. Let’s not forget what is often driving the seemingly inexplicable policy positions that members of Congress hold.

(Nice use of the word carcass, btw. Folks don’t utilize it nearly enough these days.)

Dismalist July 3, 2014 at 5:40 pm

None of this is surprising. If I hear the word “competitiveness” one more time, I’m going to grab my pistol! :-)

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Mark Thorson July 3, 2014 at 9:22 pm

The quote is “I release the safety on my Browning.”

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Dismalist July 3, 2014 at 10:03 pm

Two distinct people; two distinct quotations. :-)

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ThomasH July 3, 2014 at 5:46 pm

Is there an argument that the Ex Im bank is a second best policy for addressing some other distortion? Until I see it, I’m inclined to doubt there is one. Now is the Ex Im bank subsidy to a few big firms as bad as not making inland shippers pay for the upkeep of Army Engineer canals? No. Is it as bad as the ethanol mandate? NO Is it as bad as “crop insurance?” No. But who says we can’t do a bit of good opportunistically?

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Byomtov July 3, 2014 at 6:23 pm

Well, I was prepared to consider the matter further, until she shifted into the standard silly “highest tax rate in the OECD” rant.

Really, Tyler. Will Mercatus just publish anything as long as it’s ideologically correct?

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Rich Berger July 3, 2014 at 7:27 pm

Is her claim incorrect? Show your work.

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Bill July 3, 2014 at 7:53 pm

Rich, Supporting Byomotov, here is a recent CBO study on comparative effective corporate tax rates. They show their work.

here is the link:

http://fas.org/sgp/crs/misc/R41743.pdf

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Rich Berger July 3, 2014 at 9:06 pm

She did not say effective tax rate. Next.

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Bill July 3, 2014 at 10:51 pm

Oh, of course, we don’t pay effective tax rates, we pay nominal rates, or even fictional ones.

Vivian Darkbloom July 4, 2014 at 2:42 am

Actually, there are several measures of “effective tax rate” discussed in the study you linked to. You seem to be concentrating only on one measure (and the one the authors indicate is least relevant to promoting additional investment). Why, then, do you think this study supports your assertion?

BTW, Jane Gravelle doesn’t work for the CBO. She works at the Congressional Research Service.

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Chip July 4, 2014 at 4:49 am

Big business pays effective rates because they can afford to wade through the exemptions and offshore opportunities.

Small and new businesses just wiggle in the web that govt spun.

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mofo. July 3, 2014 at 8:19 pm

Really? Thats all it took to close your mind, her argument wasnt fully and totally perfect in your view so the whole thing is discarded?

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byomtov July 4, 2014 at 5:49 pm

No. Her argument about the Ex-Im Bank seemed irrelevant even to her, and just to be used as another excuse to present basically false information about corporate tax rates.

Note that she did not say “marginal rates.” She clearly implies that US corporations in fact pay the highest taxes in the OECD. Not true, no matter how often repeated.

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S July 3, 2014 at 7:51 pm

who gives a shit

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prior_approval July 4, 2014 at 7:52 am

The people responsible for paying senior research fellow at the Mercatus Center Veronique de Rugy’s salary?

Which, ever so coincidentally, is probably the titular chairman and general director of the Mercatus Center, by the way.

After all, I’d been quite surprised if any senior research fellow of the Mercatus Center works for free – “The worker deserves his wages,” as it says in a certain best seller. Tools need to be bought, after all.

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