Has Anyone at the Washington Post Heard of Exchange Rates?

I am always amazed at how people who are supposed to know these things actually know so little.--SS

Has Anyone at the Washington Post Heard of Exchange Rates?:

It doesn't seem so from an article that it ran on export subsidies offered in the form of loan guarantees from the export-import bank. The article highlights the purchase of Boeing plans with government subsidized loans by an Indian airline. The Indian airline then drove Delta out of a key route.

While the article talked to several economists on the wisdom of using loans guarantees to subsidize exports, it never once mentioned reducing the value of the dollar as an alternative. In fact, a decline in currency values is supposed to be the mechanism through which countries adjust to trade deficits in a system of floating exchange rates. For this reason, it is bizarre that the issue was never raised as an alternative route toward increasing net exports.

The article also implied that these loans are somehow a unique way in which the government picks winners and losers. The government has a wide range of policies (e.g. patent protection, too big to fail bank subsidies, protection for highly paid professionals) that put in a situation of picking winners and losers. This is a standard practice in the U.S. economy, not an exception as the Post article implies.