Overview:

Chapter 23 presents two contrasting views on the Export-Import Bank (EXIM), highlighting the debate within the conservative movement between those who see it as a strategic tool for countering China and those who view it as corporate welfare.

Key Takeaways:

  • Two Sides of the Coin: The chapter features two opposing arguments: one for maintaining and strengthening EXIM (Jennifer Hazelton) and one for abolishing it (Veronique de Rugy).
  • Countering China vs. Free Markets: Hazelton argues that EXIM is crucial for countering China’s aggressive export financing practices and supporting American jobs, while de Rugy argues that it distorts markets, harms small businesses, and wastes taxpayer money.
  • Strategic Tool vs. Corporate Welfare: Hazelton sees EXIM as a strategic tool for promoting American economic interests and national security, while de Rugy views it as a form of corporate welfare that benefits a select few large corporations.

Critical Quotes:

  • Hazelton: “Export credit is a strategy weapon in China’s whole-of-government approach to enhance its global power.”
  • De Rugy: “EXIM operates in effect as a protectionist agency that picks winners and losers in the market by providing political privileges to firms that are already well-financed.”

Why It Matters:

This chapter highlights a key debate within the conservative movement about the role of government in supporting U.S. businesses and trade. The outcome of this debate could have significant implications for American businesses, workers, and the economy.

Red Flags:

  • Corporate Capture: If EXIM is maintained or strengthened, there is a risk that it could be captured by special interests and used to benefit a small number of large corporations at the expense of taxpayers and small businesses.
  • Trade Wars: Using EXIM as a tool to counter China could escalate tensions and lead to a trade war that harms both economies.
  • Market Distortion: EXIM’s subsidies could distort markets and make American businesses less competitive in the long run.

Bottom Line:

Chapter 23 reveals a lack of consensus within the conservative movement on the role of EXIM, highlighting the tension between promoting free markets and using government intervention to achieve strategic goals. The future of EXIM under a conservative administration is uncertain and will likely depend on the balance of power between these competing viewpoints.