A Moral Case Against the Ex-Im Bank, Once Called "a Fund for Corporate Welfare" by Obama
Over at National Review, Mercatus Center economist and Reason columnist Veronique de Rugy makes a moral case against the Export-Import Bank, a government program that subsidizes purchases of American goods by foreign countries. The Ex-Im Bank, whose largest beneficiary is aircraft maker Boeing, is pretty universally recognized as inefficient, unnecessary, and distorting to price signals. And there's this:
A major function of the Ex-Im Bank, practically speaking, is to coax foreign companies to buy Boeing airplanes. It's often overlooked that many of the companies buying these planes are government-owned airlines in poor (or even very poor) countries.
Take Ethiopian Airlines, for instance. The airline is owned by the government of Ethiopia, a country where 78 percent of the population lives on an income below $2 a day, the average life expectancy was 59 years in 2011, and state health expenditures amount to a paltry $3 per person.
And how does Ex-Im encourage Ethiopia to spend its meager public funds? Perhaps on education improvements, health services, or critical infrastructure? Don't be silly. They sell them Boeing planes, of course! Bad credit, no credit? No problem! The Ex-Im Bank's creative financing options will allow any country to put shiny new Boeing planes in their national airports — no matter how dire their fiscal position.
