6/8/15

Representative Jeb Hensarling, the Republican chairman of the House Financial Services committee, published an article in the WSJ regarding Ex-Im bank (Export-Import) last Thursday.

I agree 100% with everything that Congressman Hensarling has to say. Completely. It is time to consign this archaic feature of crony capitalism to the dustbin of history!

However . . . the art of politics is made of compromises. These are never pretty to look at and always require give and take.

So, my suggestion to Rep. Hensarling and his colleagues in the leadership of the House Republican Party is to offer the approval of the Ex-Im bank as a sacrificial lamb to the “gods” of crony capitalism in the Democratic Party in return for their support for the Trade Promotion Authority act (TPA) approved by the Senate.

The goal of achieving the Trans-Pacific Partnership trade agreement (TPP) —and soon after that, hopefully, a trade agreement with the EU, for both of which the TPA is an absolute necessity—is so important and carries such huge benefits that throwing the Ex-Im bank in as a concession to get Democrats to vote for the TPA is a small price to pay; Very small.

Getting rid of the Ex-Im bank is the right thing to do and will be a symbolic achievement in the fight for free markets.

Keeping it on is a very worthwhile concession if, in return, one gets the so-much-more-important TPA.

Politics is an art, the art of the doable. Symbolic and Pyrrhic victories do not do the job.

The plus column of the TPA is enormous compared to the minuses of the Ex-Im bank.

Make the two conditional and get those necessary Democratic votes without which there will be no TPA.

Some time has elapsed since the initial draft of this post and just yesterday, June 12, the TPA suffered a partial defeat in the House vote. While the House voted for TPA, it also voted down (in a large margin) another provision that the Senate lumped together with its own approval of the TPA. While the strategy was, in principle, the same as I proposed above—offer Democrats in the Senate a “bone” so that they will vote for TPA—the problem is that Democrats in the House decided to sink the “bone” because they knew that without it the Senate vote approving the TPA will not stand.
I have four comments on that:

  •  The march to the left, to socialism, and to economic and national security suicide of the Democratic Party is simply frightening. If not stopped soon it will have terrible consequences for this country.
  • If Republicans are clever, they will call Democrats’ bluff on this matter. Let the Senate vote again for TPA without that additional element. Promise to the 6-9 democrats in the Senate that are needed to pass it that the other element—the “bone”—will be offered on its own as a separate legislation. Once TPA is approved, Democrats in the House will vote for the second element because they want it badly. They voted against it only because they knew that it will sink TPA. Call their bluff.
  • The problem with the strategy used by Republicans in the Senate is that the “bone” offered to Democrats was of no need or consequence if the TPA fails. It was circuitous. So, by voting against something they wanted, they nixed the TPA and, thus, would have no need for that provision they wanted.
  • My strategy discussed above, of offering Ex-Im bank as a “bone” stands irrespective of TPA, and so, would have been more effective.

Republicans should try again. TPA is of enormous importance for this country.