The American progressives, many of whom as graduate students in philosophy, political science, economics, and history had studied at German universities in the closing decades of the nineteenth and the open decade of the twentieth century, came back from their foreign education with confidence that an elite of “experts” trained like themselves should be and would be the social engineers of the future.
For instance, one of the leading Americans influenced by his German welfare-statist professors was Richard Ely, a founder of the American Economic Association and a leading proponent of this new “cradle to grave” political paternalism.
Would you prefer to live today on an annual salary, in 2015 dollars, of $50,000 or in 1985 on an annual salary (in 1985 dollars) of $500,000? James Pethokoukis correctly notes that the answer isn’t obvious for most people .
Three arguments for the Ex-Im Bank were given:
1. It creates jobs. 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. It returns money to the Treasury. Really? If the bank were truly a profitable venture, we could privatize it. I bet if the government tried to sell off the Ex-Im Bank, it wouldn’t get much, if anything at all. If the Bank’s activity were actually profitable, we wouldn’t need a government-run bank to do it.
3. Other countries give similar subsidies to their firms. So what? If other nations engage in corporate welfare, that is no reason for the United States to follow suit in the name of a level playing field. We don’t need to import other nations’ bad policies.