The Corner

Economy & Business

Speaker Boehner Should Know Better than to Talk Up Ex-Im’s Debunked Jobs Numbers

Politico reported that Speaker Boehner said that failing to reauthorize the Ex-Im Bank would mean thousands of jobs disappear in short order:

House Speaker John Boehner split sharply with his two top lieutenants and suggested Thursday the expiration of the Export-Import Bank could cost “thousands of jobs,” while signaling the institution’s charter should not be allowed to expire in June….

“Listen, I support any plan that the chairman can get through his committee,” Boehner told reporters. “Whether it would reform the bank, wind it down — but there are thousands of jobs on the line that would disappear pretty quickly if the Ex-Im Bank were to disappear. So I told the chairman he needs to come up with a plan because the risk is, if he does nothing, the Senate is likely to act and then what.”

This made Democrats attending this afternoon hearing on the issue ecstatic. The pro-Ex-Im lobby also jumped for joy, sending this e-mail around welcoming welcome Boehner to their side:

Exporters For Ex-Im Coalition Welcomes Speaker Boehner’s Comments On The Ex-Im Bank

Washington, DC – The Exporters for Ex-Im Coalition released a statement following comments today from House Speaker John Boehner (R., Ohio):

“As Speaker Boehner correctly acknowledged today, the Ex-Im Bank supports thousands of American jobs. Unfortunately, workers and exporters are losing business opportunities right now because of the continued uncertainty surrounding the Bank’s future. A wind-down of the Bank is not an acceptable solution, as it would destroy those jobs at a time when the U.S. economy is slowing

Leaving aside the fact that Republicans should understand that it isn’t the role of the federal government to prop up private companies, it’s still surprising to hear the speaker repeat Ex-Im’s favorite talking point. Export subsidies do not create jobs — they redistribute them away from unsubsidized firms and toward subsidized ones. The numbers Ex-Im puts out about jobs supported have been widely criticized, by the GAO and others, for being seriously misleading.

During today’s hearing, Representative Mick Mulvaney asked the bank’s president, Fred Hochberg, if he knew how many jobs would disappear without Ex-Im. Hochberg couldn’t respond — because he doesn’t know. The bank puts out lots of numbers about jobs created or supported, but it hasn’t tried to show what would happen if it goes away. That’s because most jobs allegedly supported would likely still exist considering — Ex-Im’s foreign buyers are wealthy and rarely make their decisions to buy U.S. goods based on the existence of export subsidies.

In other words, the speaker shouldn’t be worrying about what would happen to jobs if we let the bank wind down. In fact, he has nothing to worry about at all: Once these destructive and anti-competitive subsidies expire, jobs will flourish in industries that had formerly been harmed by Ex-Im.

That said, there was some good news from Boehner today: He said he’ll support whatever legislation on Ex-Im comes out of committee — in other words, including legislation that winds it down.

House Financial Services Chairman Jeb Hensarling said today that his takeaway from Speaker John Boehner’s comments was that he would support the closure of the Export-Import Bank, a comment which he said he was “pretty heartened” by.

“Clearly, Ex-Im is not having a good moment,” he told reporters in the hallway during a subcommittee hearing on the export credit agency.

Boehner said in a press conference earlier today that he has asked Hensarling to devise a plan to deal with the bank’s expiration in June.

“Listen, I support any plan that the chairman can get through his committee,” Boehner told reporters. … Hensarling said while he’s listening to members’ opinions, the majority of Republicans on his committee don’t support renewing the bank.

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

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