Wednesday, August 26, 2009

Seen and Unseen 101, by Don Boudreaux

Here's a letter that Don Boudreaux, of George Mason University, sent to The Wall Street Journal:

Fred Hochberg, President of the Export-Import Bank of the U.S., says proudly that “the mandate of the Export-Import Bank of the U.S. (Ex-Im Bank) is to help create and sustain U.S. jobs by financing U.S. exports” (Letters, August 21). I’ve some questions – and answers – for Mr. Hochberg.

From where does the Ex-Im Bank get the dollars it spends to subsidize U.S. exports? (Answer: taxpayers.)

Would taxpayers not spend or invest these dollars if these dollars were not taxed away? (Answer: of course they would.)

Would not this spending and investing by less-onerously-taxed Americans not “help create and sustain U.S. jobs”? (Answer: of course it would.)

Is there anything particularly desirable about a job producing and selling output for export as opposed to a job producing and selling output for domestic consumption? (Answer: nope.)

Can you spend money more wisely than it can be spent by the taxpayers from whom it is confiscated? (Answer: no; you almost surely spend it less wisely.)

So at best the Ex-Im Bank creates jobs in export industries by destroying jobs in non-export industries.

Final question, then: Why does the Ex-Im exist?

Sincerely,Donald J. Boudreaux

(Answer to the final question: to transfer wealth from unsuspecting taxpayers and consumers to politically powerful corporations; the Ex-Im Bank exists only to supply corporate welfare.)


Picture of Frederic Bastiat, author of "Things Seen And Unseen" came from here. The picture of the leadup to the Karate Kid Crane Kick came from here.

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