Well, the official election season has begun! (Tradition says campaigning doesn’t REALLY count until after Labor Day.)
Lots and lots of misinformation abounds. (One bit I did not enjoy? Ads from the Republican Governors Association, telling us Fred DuVal, Arizona’s Democratic Party nominee for governor, voted to raise college tuition by almost 100% when he served on the Arizona Board of Regents. True statement? I think so. Grossly misleading? Absolutely, for it ignores our R governor and R-controlled legislature’s failure adequately fund higher education. [Disclosure: I’ve known Fred since high school, he’s a great guy, and he can win. You can help at www.fred2014.com.]
I’ve digressed. I expect the Export-Import Bank will be a sleeper issue this fall, and control of the U.S. Senate may turn on it. What is the Export-Import Bank, and why does it matter? Basically, the bank exists to provide credit for foreign purchasers of American goods. The bank has existed since 1934, it’s a government agency with a board of directors appointed by the President and confirmed by the Senate, and it has rarely been in the news.
International trade involves many issues. One simple one? Sellers having buyers who can pay for the goods they purchase. Not all countries, and not all foreign business entities, are AAA credit risks. Neither are all governmental bodies in the United States, or all domestic business entities. Or, for that matter, all Americans.
Now, it’s easy to adopt the notion that if you can’t pay for it now, you shouldn’t have it. And if we followed that principle at home, almost everyone would be living in rented quarters, and we’d a mid-19th century economy.
There are also those who think we can ignore foreignors. ‘Nuff said about that!
But what about banks? Why can’t banks loan these foreigners money to purchase our goods? Well—and it does feel strange to be defending banks—banks are commercial enterprises with shareholders and a duty to make money! Sometimes a loan may be more risky, but the sale benefits outweigh that risk. Or a commercial lender’s terms make the deal not workable.
I’m hardly an expert on the Export-Import Bank, and years go by without my giving it a moment’s thought. I’m worried, though, because the bank exists at the mercy of Congress and the President, and its charter ends in September 2014.
Here’s an overview of the politics associated with reauthorization and control of the Senate from Carl Hulse, from the August 25 New York Times: Future of Export-Import Bank Is Wild Card in Key Senate Races. The piece includes information from both perspectives. Pretty clearly, it’s Tea Party Republicans who have the biggest problem with the EX-Im reauthorization, and there is plenty of irony associated with the fact that for the U.S. Chamber of Commerce losing the bank will be a huge defeat, and the fact that if the bank does not get reauthorized, Republicans will be responsible.
And my take? I’m sure corporate America benefits from the Export-Import Bank. I’m sure, also, that at least some of the opposition to reauthorization comes from the “that man in the White House is for it, so I’m against it” wing of the Republican Party. And I’m sure thoughtful people can make the bank better and more effective than it is! Alas, we won’t get thoughtful people, trying to make something better. Instead, we’ll get our new brand of American exceptionalism: a noisy battle in the midst of an election campaign that will be all about who wins and who loses, with combatants who cannot appreciate the fact that with this form of decision-making/governance, we all lose!