What the Ex-Im Bank Does is Immoral

Many of us understand that what’s seen as the current reasoning behind the very existence of Export-Import Bank makes it very difficult for proponents of the agency to make the case for keeping the agency running.

There aren’t any major market failures that can only be addressed by a government-regulated agency offering extra stimulus to foreigners to purchase American, and if there are any major failures that must be addressed, a government-run agency will simply not be enough to respond it, due to the government’s inherently incompetent nature.

Because all cases have already been made against the agency but one, Veronique de Rugy decided to contribute by making the case that the insistence in keeping the Ex-Im bank running is not only a simply incoherent and inefficient solution to an imaginary problem, it is also immoral.

According to her column at the National Review, the Ex-Im Bank uses its tactics to coerce governments of very poor countries to purchase Boeing aeroplanes from America.

This is the case with Ethiopia.

The Ethiopian government owns Ethiopian Airlines. According to recent statistics on Ethiopia, 78 percent of its population makes less than $2 a day, making it one of the poorest countries in the world.

What the Ex-Im Bank does to Ethiopians is to force their government to purchase their planes by encouraging officials to spend the little means they have on purchasing products they don’t need, all in the name of the eventual economic boost that some of us use as an excuse to justify the agency’s immoral exercise of their power.

To put everything into perspective, make note that between 2010 and 2013, $39,564,784 was provided to Ethiopia in subsidy assistance so that the government would be encouraged to purchase the American Boeings.

If you translate that into how much we have lost when it comes to U.S. products, you begin to understand why the Ex-Im is a waste of taxpayer money. According to Ex-Im’s FOIA reports, nearly 2,3 billion of dollars were loaned to Ethiopia.

Countries like Ethiopia rely on vast loans from the IMF, which are often used in the purchase of American Boeings. Is it moral for a United States agency to push the Ethiopian government to purchase more American products if it means that it will have to obtain the funds to purchase the items by borrowing more money?

Can we continue to support the existence of the Ex-Im Bank if we are aware that we are helping the poor to stay poor by giving them even more incentives to dig their own grave?

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