Question for Jeff Zients on Ex-Im
While surfing the web this morning, I came across a mention, by Cato Institute economist Dan Ikenson, of a White House conference call on the Export-Import Bank. I thought, what the heck, the call is during my lunch break; I’ll try to get on. I signed in, playing it straight and listing my affiliation with the Hoover Institution, fully expecting that someone would look at that and reject me. Wrong. Given how quickly I got my ID number for the conference call, it was clear that this was automatic and there was essentially no screening. It also suggested–it turns out correctly–that there would be little giving away of strategy.
So I called in at the appointed 11:30 PDT. Sure enough, it started 20 minutes late but I missed the first few minutes because I was at Trader Joe’s getting my lunch salad.
President Obama made some brief opening remarks and then turned it over to Jeff Zients, his director of the National Economic Council, for more detail. Zients gave the boilerplate case, the kind of mercantilist case that would cause the current Don Boudreaux and the 1990s Paul Krugman to blow a fuse: we need it to boost exports, jobs are at stake, we need it for our international competitiveness, there are beneficiaries in every single state, etc.
Because I thought there would be a chance for questions (although I knew the probability of my being picked was low), I thought of a question, the TANSTAAFL Bastiat’s “what is not seen” question. Here would have been the question: “It’s true that you can identify gainers in every state. But what about what is not seen–the losers in every state, people who don’t get financing because Ex-Im has allocated lending to exporters rather than to them?”
But then Zients gave me an idea for an even better question by pitching a slow ball right across the plate. He argued that it was false that Ex-Im costs the taxpayer money because it actually makes money. If I recall his number, it was that in the last year the Ex-Im made $600 million. That led me to think of the obvious question that almost anyone trying to husband tax money would think of regardless of one’s other political and economic views. And it was this:
Since Ex-Im makes money and you’re saying that not only did it make money this year but also it makes money on average, why not let Ex-Im be self-financing with no government subsidy and no government sponsorship of any kind?
Unfortunately, Zients ended the call well before the scheduled time and took zero questions. But Dan Ikenson tells me that it’s a good question.