The Corner

Ex-Im’s President Is Going to Texas to Lobby for the Bank, But Texas Doesn’t Need His Help

Ex-Im Bank president Fred Hochberg is visiting Texas today to lobby for the bank’s survival — coincidentally, on the same day former Texas governor Rick Perry called for an end to Ex-Im. (As an aside, House Financial Services committee chairman Jeb Hensarling had asked that Hochberg spend less time lobbying for his agency’s existence and more time running it and addressing its ethical issues, but that request that appears to have been rebuffed.)

Hochberg will, in all likelihood, tell people today that Ex-Im is essential to Texas exports, that it’s essential to Texas jobs and that without the bank, dire consequences should be expected for the Texas economy. I’d like to preemptively correct him — those things aren’t really true.

The bank’s website isn’t displaying any information about its activities in Texas this morning, but thankfully I have access to data I’ve downloaded in the past. Between 2007 and 2014, the bank backed only 1.19 percent of Texas exports — during that period 98.81 percent of Texas exports happened without Ex-Im subsidies. 

Texas is a gigantic exporting state. According to the Census Bureau, it accounted for 18 percent of all U.S. exports – about $289 billion worth of goods and services, supporting 1,117,318 U.S. jobs. But it’s not a successful exporter because of Ex-Im. According to the bank’s own data, the vast majority of Ex-Im beneficiaries in Texas are large, politically connected firms like Bechtel and Noble Drilling. From 2007 to 2014, over 70 percent of Ex-Im’s portfolio in Texas went to very large companies. 

Reporters and Texans should keep in mind that what’s good for a few subsidized companies is not necessarily what’s good for Texas. In fact, it can often be a bad thing for other firms in the state, such as Valero Energy, which says its business and employees are hurt by Ex-Im subsidies.

Ex-Im’s continued existence means that the vast majority of Texan firms, in fact, are put at a competitive disadvantage by their own federal government so that favored firms can enjoy political privileges. Governor Perry gets that — and I suspect a lot of other Texans do, too.

UPDATEThe Ex-Im.gov data for Texas is back up. The specific data for 2013:

In 2013, Ex-Im, according to its own site, supported 382 exporters from Texas, out of the 41,558 companies exported from the state that year. So  most of them — 99.9 percent, in fact — exported without the help of Ex-Im​. The share is likely to be slightly higher in 2014, because Ex-Im said it benefited 555 exporters, but that would still be fewer than 1 percent of exporters in the whole state.

In 2014, ExIm supported $3 billion in export value, while Texas businesses exported $289 billion worth of goods and services. That means, in 2014, ExIm backed only 1 percent of Texas exports. Ninety-nine percent of Texas exports happened without Ex-Im subsidies.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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