During yesterday’s hearing on the Ex-Im Bank before the House Financial Services, Representative Stephen Fincher (R., Tenn.) made the case, once again, for the reauthorization of the agency. He was also trying to sell the idea of his reform bill, which the Heritage Foundation’s Diane Katz has shown would have only marginal effects on the bank’s rampant mismanagement, wouldn’t prevent the economic distortions it causes, and would in many cases just duplicate existing policies. Bottom line: It’s useless.
Fincher, who back in 2012 voted against Ex-Im, now defends it in the name of the workers in his state. He’s said it’s been “very difficult” to go against the wishes of the Financial Services Committee chairman, Jeb Hensarling, but says the 164,000 jobs “supported” by Ex-Im, including 8,300 jobs in Tennessee, have made up his mind for him. So I figured I would give the congressman a little perspective on Ex-Im’s “job creation” record:
First, I have no idea where the idea that Ex-Im supports 8,300 jobs in Tennessee comes from. I assume it comes from Ex-Im data, but I can’t be sure since the agency has removed all jobs data from its website.
In 2014, 158,913 jobs were supported by exports from Tennessee. So it means that if that 8,300 job number is right, 95 percent of export jobs in Tennessee are happening without any backing from the Ex-Im Bank.
According the Ex-Im website, 45 exporters benefited from Ex-Im financing in 2013 (latest data available). That’s 0.6 percent of the 7,120 companies that exported from Tennessee in 2013. So 99.4 percent of exporters exported without any government support — while competing with companies that did get special financing from Ex-Im.
Again according the bank’s data, $226 million in export value was supported by Ex-Im in Tennessee in 2014. That pales in comparison to the $33 billion exported from Tennessee (according to Census data). That is, in 2013, Ex-Im seems to have backed a tiny 0.69 percent of Tennessee exports.
If the 8,300 jobs backed by Ex-Im financing in Tennessee is the number that convinced Representative Fincher to support the agency, I do understand why it’s hard to disagree with Chairman Hensarling. It’s not easy to base your support for a crony-capitalist program on weak data.
It isn’t too late for Fincher to change his mind (again) and join the growing ranks of Republicans against Ex-Im. Maybe this excellent open letter by the chairman to his Republican colleagues in this morning Wall Street Journal can persuade him to do the right thing.
Or he can start thinking about the thousands of unseen victims in his state who are hurt by the Ex-Im Bank. Who are they?
- Taxpayers who now bear the risk for $140 billion in Ex-Im liabilities
- Consumers who pay higher prices for the purchase of unsubsidized goods
- Unsubsidized firms competing with subsidized ones
Indeed, some are victimized multiple times: first as taxpayers, then as consumers, then as competitors, and finally as borrowers. These guys maybe less vocal than the beneficiaries of Ex-Im, who I have no doubt are constantly lobbying Representative Fincher. But they count too.
As I said in my testimony before the Senate Banking Committee on Tuesday:
Unfortunately, we will never see the businesses that could have been. We will never hear from the workers whose wages weren’t raised or whose jobs disappeared because of unfair competition from Ex-Im-backed firms.
It takes courage and leadership to stand up and represent the forgotten firms, workers, taxpayers, and consumers whose voices are so easily drowned out by the corporate beneficiaries of government privilege.
Update: A reader sends me the following message indicating that Mr. Fincher over-inflated the 8,300 job number:
In the pro EX-IM renewal ads US C of C is running constantly down here, the claim is 6,600 Tennessee jobs at stake.
The ads specifically ask Tennesseans to call Rep. Diane Black and Sen. Bob Corker, pleading for their votes for Tennessee jobs.