Liz Peek

Cruz Is Not the Solution:  Time to Draft a Moderate?

Liz | 04/06 at 01:17 PM

Donald Trump may be the problem, but Ted Cruz is not the solution. Not because the unpopular first-term Texas senator lied about how he financed his Senate campaign (he didn’t actually roll the dice with his and his wife’s savings, but rather borrowed money from Vampire Squid Goldman Sachs and Citibank and then “forgot” to report it) or because he has engaged in dirty campaign tricks or even because his whole Canadian birth issue really is kind of a mess. No, Cruz is disqualified because his self-promotion as a principled consistent conservative is not authentic.  Oh, and by the way, he is not electable.

Before pulling the lever, voters need to revisit two issues that form the bedrock of Cruz’ campaign to publicize Cruz. The first is his opposition to the Ex-Im Bank, the second, his crusade against Common Core. Both these issues were tailor-made for self-aggrandizement. Neither was well known, so Cruz could move public opinion by creating a false and fierce narrative and both fit neatly into his long-running feature, “Ted Cruz the outsider standing up against the Big Corporations and Big Government,” starring a Princeton and Harvard graduate, successful corporate lawyer, former GW Bush insider and husband to a Goldman banker. Some outsider.  

In joining his fellow Texan Representative Jeb Hensarling in trying to block the reauthorization of the Ex-Im Bank, Cruz landed on the perfect vehicle to drive his charge against “crony capitalism.” The Ex-Im Bank is a government agency established in 1934 to help facilitate U.S. exports. Congressional reauthorization of the organization was not controversial. In other words, it was a blank canvas on which Cruz and Hensarling could paint what they liked. 

In launching his opposition, Cruz admitted as much, saying in an op-ed in USA Today, “To most Americans, the words “Export-Import Bank don’t mean very much.” He then fired a lopsided barrage against the bank, describing it as “big businesses’ big government bank backed by U.S. taxpayers.” He cites numerous examples of the bank financing projects in countries with unfriendly or corrupt regimes, such as China and Congo, and describing its practices as “markedly irresponsible.”

Some of Cruz’ criticisms are accurate. There have been charges of corruption, and like most federal institutions, the bank is not well run. However, for all the shortcomings, Ex-Im has operated since its founding with a default rate of 1 percent and, nearly alone among government agencies, the bank turns a profit. It contributed $674 million to taxpayers in 2014 and $432 million in 2015.  

More important, the bank provides loans and loan guarantees to entities wishing to buy U.S.-made goods that otherwise would not be able to access credit to do so. That is why operations in places like Sudan and Russia are on the list.

Related: Ex-Im Bank Fight Already Costing U.S. Jobs 

Cruz and other critics complain that by dollar volume, most of the bank’s loans go to support big companies like Boeing and GE, which is true. That support helps offset much greater assistance provided by rival countries to those organizations’ competitors. (The Chinese, for instance, lent five times as much as the Ex-Im Bank last year to boost exports.) It is also true that in 2014, Ex-Im made 3,340 loans on behalf of small firms. In Congressional hearings, dozens of those companies have testified that without Ex-Im, they would not be able to export goods

Cruz and others are concerned that Ex-Im’s loan book soared during the financial crisis, suggesting that the bank’s operations have grown too big. They know full well that the increase in activity, far from being alarming, confirmed the value of the bank. At a time when private credit all but dried up, exporters could rely on the Ex-Im.

The attack on Common Core is equally cynical. Ted Cruz portrays Common Core as an attempt by the federal government to take over our public schools. It is not true. The effort to create nationwide standards emerged from concerns among the nation’s governors that U.S. public schools were not arming children with the skills they need to join a 21st century workforce.

Related: Here’s How Ted Cruz Makes Donald Trump Look Acceptable

As the U.S. has lost manufacturing jobs to countries with cheap labor, the ability of our workers to upgrade their skills and take on new jobs proved inadequate. The Economist recently reported, “A fifth of that 1999-2011 decline in factory jobs was caused by Chinese competition, and those who lost jobs generally did not find new ones nearby…there was almost a one-for-one increase in unemployment or, more frequently, in people leaving the workforce entirely – often to claim disability benefits….”

Today, over half the students entering two-year colleges and 20 percent of those enrolling in 4-year institutions require remedial courses, which cost the states over $3 billion a year, and have been shown to be ineffective. The fix has to be in preparing students for college – raising the standards of our schools. This need led to the creation, sponsored by the National Governors Association, of the Common Core.    

The federal government got involved only in offering states “Race to the Top” funding if they adopted higher standards; they were not required to embrace Common Core.

Related: Ted Cruz: It’s Hard Out There When You’re Universally Loathed

Ironically, in opposing Common Core, Cruz and his compatriots have joined hands with the teachers’ unions, who are terrified that low-performing teachers will at last be held accountable and sundered from their lifetime employment guarantees. Tragically, both groups are fighting against progress for our children, and the neediest kids are the ones who will pay the highest price. Ted Cruz has called education the civil rights issue of the 21st century. He is correct—his opposition to Common Core is beyond cynical.

Unhappily, the narratives that Cruz and his camp have spun about both the Ex-Im Bank and Common Core are now baked into conservative orthodoxy. However, come November issues like these may sway the great moderate middle – the people who actually will elect the next president. So while bashing Ex-Im and Common Core has done a lot to elevate Ted Cruz’ profile, it will not make him victorious over Hillary Clinton or whomever the Democrats run. Cruz trails Hillary Clinton in polls by an average of three points, and has been underwater in a hypothetical match-up most of the past several months.

“Consistent. Conservative. Trusted.” No, Cruz is not trusted, and is not the solution.

Posted in Fiscal Times
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