We knew Donald Trump wasn't a conservative. We knew he believed in government picking winners and losers. We knew he had an inordinate infatuation with with exports.
We also knew that Trump is thoroughly impressionable, meaning that when the lobbyists, the bankers, and the special interests got his ear — and this being the swamp, that was inevitable — they could probably win him over.
So when Trump said early in the campaign that he didn't think the Export-Import Bank (at that point it was in liquidation) should exist because the private sector can and does finance exports, I didn't get too excited. He was correct on the specific matter, but his personality suggested that this wouldn't last.
The president said he planned to fill two vacancies on the bank's board, which has been effectively paralyzed with three open seats on its five-member board.
"It turns out that, first of all, lots of small companies are really helped, the vendor companies," Mr. Trump said. "But also, maybe more important, other countries give [assistance]. When other countries give it we lose a tremendous amount of business." ...
"Instinctively, you would say, 'Isn't that a ridiculous thing,'" Mr. Trump said of the Ex-Im Bank. "But actually, it's a very good thing. And it actually makes money, it could make a lot of money."
His argumentation here couldn't be less sound. He makes three points. All faulty to the extreme.
1) Starting at the end: "it actually makes money, it could make a lot of money."
Ex-Im, if proper accounting methods are used, loses a tiny bit of money, according to the Government Accountability Office.
But Trump seems to be seeing this government agency as a money-maker for the government. Is this what he meant by running the government like a business? That he was going to displace private sector players (and Ex-Im does displace private-sector financiers) in profitable business in order to profit? Why stop at export finance? Why not open a federal casino? Golf course? Or national health insurer?
Also, Fannie Mae and Freddie Mac made money until they didn't, and then they crashed and were bailed out by the taxpayer.
Corporate welfare's costs aren't mostly budgetary, but distortionary. I make these arguments at more length here.
2) "other countries give [assistance]. When other countries give it we lose a tremendous amount of business. ..."
Most Ex-Im financing is not issued to counter foreign government financing, according to Ex-Im's own documents.
Also, foreign governments harm themselves when they subsidize their own exports. Two economists estimate that China harms its economy by 3 percent when it subsidizes its exports.
Does Trump know that Ex-Im mostly subsidizes the Chinese government?
3) "lots of small companies are really helped, the vendor companies. ..."
In a typical year, less than 20 percent of Ex-Im's money subsidizes small exporters. In a typical year, about 40 percent of Ex-Im's money subsidizes Boeing exports. This isn't a small-business agency. Even the agency's "small-business" program subsidizes big business.
And about 99 percent of small U.S. businesses never get support from Ex-Im.
Ex-Im doesn't help the economy. It doesn't drain the swamp. It does boost the president's power to pick winners and losers, and maybe that's why Trump likes it.
Timothy P. Carney, The Washington Examiner's commentary editor, can be contacted at email@example.com. His column appears Tuesday nights on washingtonexaminer.com.