General Electric CEO Jeffrey Immelt is claiming that closing the Export-Import Bank would mean “economic catastrophe.” He must use the term differently than most people do. A bit of math shows why.
According to page 6 of Ex-Im’s 2014 annual report, the bank did $27.5 billion of business in 2014. The Bureau of Economic Analysis estimates GDP in the fourth quarter of 2014 to be $17.7037 trillion (see Table 3, page 8). This means Ex-Im’s business last year was equivalent to about one sixth of one percent of GDP. This is par for the course.
Confining the comparison just to America’s $2.35 trillion of exports, everything Ex-Im did all of last year is equivalent to less than 1.2 percent of exports. Seeing as many Ex-Im-financed projects would still happen without the bank’s involvement including GE, by Immelt’s own admission—its true net impact is almost certainly much smaller than that.
If anything, by redirecting billions of dollars of capital towards the politically connected and away from deserving entrepreneurs, Ex-Im is preventing the economy from reaching its true potential.