An Ignorant and Dishonest Performance

by Don Boudreaux on September 4, 2020

in Crony Capitalism, Myths and Fallacies

In what must be one of the most ignorant tweets authored by someone supposedly well-informed and knowledgeable about economics and public policy in the U.S., Sam Hammond of the Niskanen Center writes:

The Ex-Im fight isn’t really about “crony capitalism.” Every industrialized nation has an export credit agency.

See it for what it was and is: A demonstration project to test the efficacy of the Koch’s advocacy network at mobilizing right wing populism.

What nonsense, at once illogical and dishonest, and throughout gratuitously insulting.

First comes the illogic. We are to believe that because every industrialized nation has an export-credit agency, then it’s obvious that such agencies – including the one here in the U.S. – serve the greater good rather than serve the interests of cronies. Alternatively, I suppose, Hammond might expect us to believe that if every industrialized country has cronyist institutions, there is then no good reason for anyone in the U.S. to protest our own such institutions.

I need say no more for anyone of intelligence to detect the obvious weakness of either interpretation of Hammond’s claim. (For those who might still perhaps find some potential merit in Hammond’s claim, ask yourself if you believe that agricultural price supports, protective tariffs, and rent control – policies also widely practiced by many other industrialized nations – are thereby proven to be policies that promote the greater good and not likely to be motivated and maintained by cronyism.)

Next comes the dishonesty. Hammond personally knows many of the people at the Mercatus Center, and at other like-minded institutions, who write and testify against ExIm. He therefore knows – or recklessly refuses to know – that they sincerely believe that ExIm is an unjustified creature of cronyism. Even if they are mistaken, Hammond – who once worked with them – must know that their convictions are held sincerely rather than worn as a costume for purely political ends. Hammond’s insinuation that these opponents of ExIm do what they do, write what they write, say what they say, because they are paid to do so is despicable. He knows that these people are not mercenary. He may legitimately disagree with their economics, their values, and their policy positions – and he might even be correct to so disagree – but he cannot possibly really believe that these people are insincere mercenaries with no real convictions about the matter.

Nor, by the way, does Hammond have any reason whatsoever to believe that Charles Koch himself is insincere in his opposition to cronyism or in his belief that Ex-Im is an instance of cronyism. Everything in the long history of Mr. Koch’s support for liberal causes reveals beyond any doubt that he would understand that ExIm is an economically harmful cronyist outfit. (Ditto for Mr. Koch’s employees.) No – let me make this point stronger: Hammond surely knows that the belief held by Mr. Koch and his employees that ExIm is a cronyist institution is a belief held sincerely. That Hammond knowingly suggests otherwise is worse than contemptible.

Hammond should apologize.

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