Even the impartial New York Times reporter who covers the Export-Import Bank believed, at some point this spring, that it was self-evident that the Export-Import Bank boosts jobs, and that ending it would cost jobs. He tweeted:

Fair question. Let me provide three reasons not to worry about job losses now that Ex-Im is in liquidation:

1. Economists agree: Ex-Im didn't create net jobs, it redistributed jobs

Ex-Im doesn't create money out of nowhere. It mostly redirects private capital, away from whatever it would have financed, towards politically favored exports. Many economists have made this clear.

American Action Forum, an Ex-Im supporter, stated:


Ex-Im's financing may help create jobs in specific industries. However, for the economy as a whole export financing merely redistributes jobs across the economy rather than create more overall jobs.

The Congressional Research Service wrote:


[P]romoting exports through subsidized financing or through government-backed insurance guarantees will not permanently raise the level of employment in the economy, but it will alter the composition of employment among the various sectors of the economy.

Harvard Economics Chairman Greg Mankiw addressed the "It Creates Jobs" argument by writing:


Of course it does! If the government were to put the names of all businesses into a hat, pull out a few randomly, and give those a per unit subsidy, those businesses would expand and hire more workers. That would not make it a good policy, however, because the wrong jobs would be created.

2. The Private Sector is Providing the Export Financing Ex-Im Used to Provide

Once Ex-Im lost its ability to finance U.S. exports last week, its customers turned to the private sector for export financing. The Omaha World Herald reported on an exporter that relied on Ex-Im financing until June 30: "Warren's international business is now big enough that it's able to go to the private market for insurance; it has done so since July 1." Similarly, "Like Warren's Hushka, Lindsay Chief Financial Officer Jim Raabe said his company has recently shifted to the private market for its insurance."

This is exactly what all serious observers predicted.

"There is a vibrant private export credit market." Charles Baker of trade financier Atrafin told me at the Ex-Im annual conference. "Ex-Im provides financing that the private sector also provides."

"If the US Export-Import charter is not renewed," Goldman Sachs wrote in a recent analysis on Boeing, by far the largest beneficiary of Ex-Im financing, "we believe the overall impact in the near-to-medium term would be fairly limited given the robust financing environment at present… It would only require a small step up from each of the many other sources of financing to fill an Ex-Im gap ..."

Boeing CFO Kostya Zolotusky appeared to agree. The Wall Street Journal reported in 2013 that Zolotusky "said he was confident the company could find alternative funding sources for customers that wouldn't require it to boost its support of aircraft sales." A Boeing report recently showed many excellent sources of financing for aircraft.


3. Many Exports Ex-Im Subsidized Would Have Happened Anyway

In a study on Germany's export subsidies, researchers wrote that "about 3 percent of exports are covered" by German Ex-Im-type subsidies and that "[t]he trade creation due to Hermes therefore amounts to at most 0.52 percent of total German exports." So the difference — about 2.5 percent German exports — were subsidized exports that would have happened without the subsidies, or they were subsidized exports that displaced other subsidies that would have happened.

The clear implication: export-subsidies mostly just hand money to the exporters, the foreign buyers, and the banks, rather than making exports happen that otherwise would not have happened.

Here in the U.S., you can see many exports that would have happened even had they not received Ex-Im subsidies.

Some examples:

• Caterpillar sold equipment to an exclusive Caterpillar dealer that was created by and partly owned by Caterpillar, and got a $15 million Ex-Im guarantee for it.

• A Spanish developer ordered, received, and installed wind turbines made in the U.S. by Siemens. After the wind mill was up and running, Ex-Im provided $65 million in loans.

• Solyndra shipped solar panels to a Belgian company. After the shipment, Ex-Im financed it.

• Enron and First Solar are among many companies that have received Ex-Im subsidies for "exporting" goods to themselves.