Ah, wait, no, it’s the chairman of the Harvard economics department, Greg Mankiw, who delivers a succinct case against the arguments typically made for the Export-Import Bank — that it creates jobs (at subsidized firms, sure; on net, probably not), that it doesn’t cost the Treasury money (it does if you consider the risk correctly), and that other countries have similar programs (doesn’t make it a good idea).
Mankiw, a former Bush-administration official, does lean to the right, but his conclusion shouldn’t be surprising for another reason. The economic evidence, Salim Furth of Heritage pointed out last year, suggests that subsidies like Ex-Im’s do not deliver net economic benefits.
Mankiw says he’s unconvinced by the three arguments above, which he heard from a pro-Ex-Im politician at Mitt Romney’s retreat in Park City this past weekend. I could offer a decent guess as to who that politician was, but instead I will note that there is a narrower argument for Ex-Im that is not exactly covered above.
The idea is that it enables transactions that would not necessarily occur otherwise — certain kinds of deals, like big purchases of aircraft or infrastructure by poor countries, for instance, or export deals by small and medium firms, that simply wouldn’t happen without Ex-Im’s help. But that is a much narrower benefit than Ex-Im advocates generally claim, and we still need to take into account the bank’s costs — the harm done to unsubsidized competitors, the risk taxpayers take on, etc. (Another argument, by the way, is that Ex-Im can have certain strategic or foreign-policy benefits — like building goodwill with a developing country’s government — but again, that would have to be worth the cost, and it is not at all what Ex-Im is designed to do.)