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Watch Barack Obama make the case against the Export-Import Bank

On the campaign trail in 2008, candidate Barack Obama promised to "go through the entire federal budget, page by page, line by line and eliminate the programs that do not work and are not needed." At the time, campaign sources told me it was one of the most popular lines in his regular stump speech. He offered the promise not as part of a broad critique of government, but as part of an affirmative defense of activist government. The point, in part, was to get the funding "for the programs that do work and are needed."

And at least once, as noted recently by the Club for Growth, Obama singled out the Export-Import Bank as "little more than a fund for corporate welfare" and a prime example of a program he was willing to eliminate.

Now sunsetting the Export-Import Bank is on the political agenda in a big way, part of a somewhat winding saga in which a Delta lobbying priority became a Tea Party cause celebre. And part of the madness of partisan politics is that with conservative Republicans swinging hard against the Bank, Obama and the rest of his party is now for it. It's particularly strange, but the choice of the Ex-Im Bank as an example of big government gone wrong wasn't random. As David Dayen has recently written for Salon, there is a rich tradition of 1980s and 1990s opposition to the Bank from the left, including blistering Mother Jones articles and tough floor speeches from then-Representative Bernard Sanders.

And the critics were, in essence, correct. The case against the Bank does contain one important flaw — the Bank doesn't cost the government any money and the campaign to change accounting rules to make it look like it does is more trouble than its worth.

But the mere fact that the government is able to direct cheap loans to certain favored companies at no taxpayer expense doesn't mean the government should direct cheap loans to certain favored companies at no taxpayer expense. After all, why not just offer cheaper loans to everyone? And indeed that is exactly what the Federal Reserve does when it eases monetary policy. If the Fed wants to stimulate the economy in ordinary times, it sets low interest rates on short-term government debt and that pushes borrowing costs down throughout the economy.

The real cost of the Ex-Im Bank is born not by the Treasury, but by everyone else. Cheaper loans for Boeing and Caterpillar mean ever-so-slightly less stimulative monetary policy for the rest of us. That means slightly — and I do mean very slightly, the Ex-Im Bank is not a big deal in the grand scheme of things — higher interest rates on everything from auto loans to municipal bonds to mortgages. Because the Export-Import Bank specifically offers subsidized loans to send American-made goods abroad, it slightly depresses American living standards compared to where they might otherwise be.

Paul Krugman notes that the standard case against the Ex-Im Bank may not apply during the present economic environment.

Given that the Fed's key interest rate is already at zero and can't go any lower, the Bank is arguably a form of short-term zero cost stimulus. On the other hand, if the Ex-Im Bank went away maybe the Fed would do more Quantitative Easing or other unconventional stimulus.

But more to the point, this argument is too easy. In the somewhat upside-down world of a depressed economy with near-zero interest rates, all kinds of bad ideas are short-term stimulative. When congressional Republicans propose large regressive tax cuts, liberals writers don't pipe up talking about how it's short-term stimulus. They talk — rightly — about how it's poorly targeted and bad long-term public policy. The Export-Import Bank is the exact same way. A small upward redistribution of wealth from normal people to a handful of companies. It was true when liberals were the ones complaining about it ten and twenty and thirty years ago, it was true when Obama was campaigning in 2008, and it's still true today — even if the Tea Partiers are the ones making noise about it.