Is the Washington Post reading the Austrians?
Maybe since parts of their editorial examining the flaws in the argument that the Export-Import Bank (Eximbank) creates jobs resemble some of the arguments against Eximbank made by Campaign for Liberty Chairman Ron Paul and other free-market thinkers.
It was particularly refreshing to see the Post–which reflects conventional wisdom inside the beltway– acknowledge that any jobs “created” by Eximbank come at the cost of jobs that would have been created had the government not stolen resources from private citizens and given them to Eximbank.
Article here and excerpted below. Campaign for Liberty continues to work to close down the Export-Import Bank and other forms of corporate welfare.
Prior to a recent hearing before the House Financial Services Committee, a pro-bank group gave to each member of the panel a card on which was printed a summary of the jobs impact for his or her congressional district. To take one example, the card for Rep. John K. Delaney (D-Md.) claimed that, between fiscal 2007 and 2013, Ex-Im had “supported” $379.3 million worth of exports and 2,423 jobs at 15 firms in his district, which stretches from Gaithersburg to the Western Maryland panhandle.
It’s eminently plausible that Ex-Im helps maintain a level playing field for big U.S. firms in the heavily politicized and subsidized global market for jets, power plants and other capital goods. But when it comes to jobs, well, just how rigorous are the estimates, really? Congress ordered a study of that very question when it last reauthorized Ex-Im in 2012. In May 2013, the Government Accountability Office (GAO) produced its verdict: Meh.
GAO noted that Ex-Im must speak vaguely of “jobs supported,” rather than concretely of jobs created, since its methodology cannot really distinguish between new employment and retained employment. To get a number for “jobs supported,” which includes both a given firm and that firm’s suppliers, Ex-Im multiplies the dollar amount of exports it finances in each industry by a “jobs ratio” (calculated by the Bureau of Labor Statisics).
On average, Ex-Im calculates, a billion dollars of Ex-Im-backed exports supports 6,390 U.S. jobs; ergo, the $379.3 million exported by firms in Mr. Delaney’s district supported 2,423. GAO pointed out, additionally, that these figures do not differentiate between full-time and part-time work and, crucially, provide no information about what might have happened to employment at the firms in question, or others, if the resources marshalled by Ex-Im had flowed elsewhere in the economy.