Rep. Carolyn Maloney supports reauthorizing the Export-Import Bank, whose charter lapsed on June 30. She recently took to the Huffington Post to give 10 reasons to support Ex-Im. Here’s reason 1:
Exports play an important role in the U.S. economy, supporting nearly 12 million jobs in 2014.
Ex-Im did about $27.5 billion worth of business last year, amounting to about 1.2 percent of America’s $2.35 trillion in total 2014 exports, and less than one-sixth of one percent of America’s $17.7 trillion 2014 GDP. From this, Rep. Maloney concludes that Ex-Im supports nearly a tenth of the entire U.S. workforce!
Also note the clever use of phrasing here. Rep. Maloney and other Ex-Im supporters always talk about jobs “supported,” and never jobs “created” or “saved.” This is on purpose. Such phrasing is vague enough to make Ex-Im look good without having to prove that it’s actually doing good. This is important, since every time Ex-Im helps Boeing sell a jet to a foreign airline, it hurts domestic airlines and eliminates jobs there. I am not aware of any official Ex-Im statistics on how many jobs the agency has un-supported.
Reason 5 is similar, and reads in part:
Since 2009, our Ex-Im Bank has supported an estimated 1.3 million jobs.
That averages out to 260,000 jobs supported per year (again, note the phrasing), or about one-sixth of one percent of the total year-end 2014 labor force, according to the Bureau of Labor Statistics. Since Ex-Im’s annual support is equivalent to only $2,300 per job supported, most of those jobs would still exist without Ex-Im—in fact, since Ex-Im is largely redundant with private sector financing, its actual amount of net support created is far smaller than even its own meager statistics show. Factor in the jobs Ex-Im unsupports, and Ex-Im is almost certainly a net drag on the U.S. economy.
Rep. Maloney’s other reasons are of similar strength.
Boeing’s own CEO debunked reason 6 in a recent shareholder call. Maloney argues the private sector will be unable to step into any void Ex-Im leaves. Boeing, which receives 40 percent of Ex-Im’s business, publicly disagrees.
The Congressional Budget Office also publicly disagrees with Rep. Maloney on reason 8, even though it answers in part to her. The facts require it to do so. Maloney argues that Ex-Im is costless to taxpayers. Using the same standard accounting rules most government agencies and nearly the entire private sector use, Ex-Im loses millions of dollars each year. It only appears profitable when using Ex-Im’s in-house accounting methods, which are, ahem, rather different.
Reason 9 correctly argues that many Republicans support Ex-Im. For Democrats like Rep. Maloney and independents like myself, if the GOP supports something, that alone is often reason enough to oppose it. And Maloney also fails to mention President Reagan’s vocal opposition to Ex-Im (video evidence here and here), as well as the fact that he cut the agency’s portfolio cap in real terms.
Finally, Maloney’s reason 10 is that a lot of pro-business groups support Ex-Im. Of course they do! Ex-Im is a welfare program for businesses. Consumers would be better served if the government would follow pro-market policies, not pro-business policies. There is a world of difference between the two.
Instead of seeking cogent arguments from Ex-Im supporters, it is better to simply recognize that they wish to continue benefiting from the extensive lobbying, cronyism, and favor-making that institutions like Ex-Im make possible. One should also recognize their creativity in creating cover stories for their cronyism. For a more convincing top ten list of reasons to oppose Ex-Im, see my paper, and keep an eye on this blog for more.
This article originally appeared in Competitive Enterprise Institute’s OpenMarket.