Media have framed the debate over Export-Import Bank reauthorization as yet another battle in the war being waged by free market extremists to wrest control of the Republican Party from what they see as the infidels of the business establishment. That simplistic narrative, perpetuated by an irrepressible disdain for anything that whiffs of Tea Party ideology, has brought editorial boards and journalists from the Left to stand shoulder-to-shoulder with the multinational corporations they normally demonize in an effort to beat back a common foe.

But the compelling case against Ex-Im is less an ideological than a moral one. It is not merely that Ex-Im puts taxpayer resources at risk or that the Bank’s operation encourages too close a relationship between big business and government or that resources are being used inefficiently. Anyone concerned about economic fairness should see the virtue in terminating a program that benefits some companies at great expense to many, many others. But the window to that view has been shuttered by a media that finds it more important to portray the reformers as childish idealists throwing tantrums.


Ex-Im is a government-run export credit agency that arranges special financing to facilitate sales between U.S. companies and foreign customers. Barring congressional reauthorization, its charter will expire on September 30. Supporters claim that since exports are good for growth and job creation and since the Bank “creates” exports, failure to reauthorize will hurt the economy. But that conclusion rests on the illusion of single-entry accounting. It fails to consider the substantial, but more difficult to observe costs.


There are opportunity costs, representing the growth that would have occurred had Ex-Im’s resources been deployed more efficiently in the private sector. There are intra-industry costs – those incurred by the unsubsidized competitors of firms receiving Ex-Im subsidies. And there are “downstream” industry costs borne by producers whose domestic suppliers receive export subsidies. These downstream firms are hurt because crucial inputs become more expensive, while their foreign competition gets subsidies from U.S. taxpayers.

A new Cato Institute study released today, “The Export-Import Bank and Its Victims: Which Industries and States Bear the Brunt?” includes estimates of these “downstream” costs. These are some of its findings:

  • Of $50 billion in Ex-Im subsidies granted to non-aircraft U.S. manufacturers between 2007 and 2013, $40 billion were costs imposed on downstream firms;
  • $0.80 of every $1.00 of Ex-Im subsidies is a cost imposed on other downstream companies;
  • 189 of the 236 non-aircraft manufacturing sub-industries (NAICS‑6) populating all 21 broad industries (NAICS‑3) can be counted as Ex-Im “victims” because the value of subsidies received was smaller than the costs incurred;
  • These 189 industries incurred a net loss of $19.5 billion or $2.8 billion per year or $14.7 million per sub-industry per year on account of Ex-Im;
  • The five broad industries (NAICS‑3) incurring the largest net costs were producers of electrical equipment, appliances and components; furniture; food; non-metallic mineral products; and, chemicals;
  • A total of 47 of 236 non-aircraft manufacturing sub-industries (NAICS‑6) populating 13 of 21 broad manufacturing industries (NAICS‑3) can be counted among Ex-Im’s winners;
  • Between 2007 and 2013, these 47 “winners” realized a net benefit of $29.5 billion or $4.2 billion per year or $89.8 million per sub-industry per year on account of Ex-Im;
  • Thus, Ex-Im policies amount to a net tax of $2.8 billion per year on 189 sub-industries ($15 million per industry) and a net subsidy of $4.2 billion per year to 47 sub-industries ($90 million per industry);
  • These figures support the claim that Ex-Im amounts to an exercise in “picking winners and losers”;
  • Every U.S. state counts Ex-Im victims among its manufacturing firms;
  • The most important MFG industry (% of GDP) in 33 states was a top ten Ex-Im victim;
  • The industry accounting for the most or second most manufacturing GDP in 47 U.S. states was a top ten Ex-Im victim;
  • The top five Ex-Im victims cumulatively account for 50 percent of more of manufacturing value-added in seven U.S. states: North Carolina (62.8%), Delaware (60.5%), New Jersey (60.3%), Virginia (57.0%), Nebraska (53.0%), West Virginia (52.4%), and Maryland (50.5%);
  • The top ten Ex-Im victims cumulatively account for two-thirds or more of manufacturing value-added in 22 states;
  • In 17 U.S. states, the largest manufacturing industry was a top five Ex-Im victim;
  • The chemical industry – the fifth largest Ex-Im victim – is the largest manufacturing industry in 11 states.

While some media might find the arguments against Ex-Im reauthorization to be “ridiculous,” a more plausible conclusion is that some have allowed their contempt to impede their job performance. There are plenty of compelling, ideology-neutral facts to support the case for ending Ex-Im. It is the media’s job to open the shutters to that view.