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Here’s a letter to the Charleston Post & Courier:
Stephen Aaron argues that the Export-Import Bank should be reauthorized because it “promotes U.S. jobs by supplying financing for the export of American goods” (“Build S.C. ‘firewall’ to protect Ex-Im Bank [2],” Sept. 28).
Mr. Aaron’s byline says that he graduated from Clemson University. Yet while at Clemson he apparently never took a course in economics. Clemson (on whose faculty I served from 1992 to 1997) has long boasted one of the best economics departments in the country. Had Mr. Aaron taken an economics course there he would have been taught to look more deeply into the effects of policy. He would have learned that government subsidies cannot create some jobs without destroying other jobs; he would know that resources directed by government to domestic industry X are directed away from domestic industry Y; he would realize that benefits arbitrarily given by government to producers are paid for with resources arbitrarily taken by government from consumers.
In short, had Mr. Aaron taken (or recalled) even a single economics course from any of the many superb scholars at Clemson, he would understand that that which is seen (such as jobs created by Ex-Im subsidies) masks that which is unseen (such as jobs destroyed or not created – as well as consumer products not produced – because government diverted resources to politically favored producers).
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030