Dr. Martin Hash Podcast

Imaginary money is only valuable as long as there's force to say it is. This works pretty well within a nation's borders but when other nations would like to buy things from the U.S. but their money isn't really worth anything because all they do is grow bananas, what's a money-printing nation to do? This is where the Export-Import, EXIM, bank comes in. Banana republics can buy Boeing airplanes because the U.S. government-funded EXIM gives them the money to do so then eventually writes if off as Foreign Aid. It's actually not a bad idea, creating jobs and stimulating the economy of both countries for nothing more than a relatively small increase in the National Debt, to the tune of $20 billion per year.

Unfortunately, as always happens when Market-forces feedback is lacking, the EXIM is prone to exploitation; for example, 80% of the loans actually go to Boeing. Special Interests are also a problem; EXIM Board-members are shareholders of some of the companies benefiting; and as bizarre as it may seem, EXIM loans supplied the money for China to improve its nuclear technology. These fallacies have not gone unnoticed, and there's a lot of resistance to EXIM; in fact, politicians regularly call for its end so the funding legislation is passed surreptitiously during catastrophes, like the night of a mass shooting. The EXIM is very successful at creating lots of jobs, and is a foreign policy success, but make no mistake about it, when folks talk about Corporate Welfare, the Export-Import Bank is an example of what they mean.