Here’s a letter to the acting chairman, Charles Hall, of that great geyser of cronyism, the U.S. Export-Import Bank:
According to World Trade Online, you’ve asked Pres. Trump to “restore the U.S. Export-Import Bank to full functionality” so that the U.S. can “respond to the China challenge in international trade and global economics” (“Ex-Im chairman urges Trump, Senate to restore bank to full capacity to compete with China,” April 7). A premise of your request is that, as summarized by World Trade Online, “the Ex-Im Bank’s capacity is well below that of China’s official export financing agencies.”
Because export-financing agencies divert resources away from uses encouraged by markets (in which producers and consumers spend their own money) and into uses encouraged by politics (in which bureaucrats and cronies spend other people’s money), the resource uses promoted by such agencies are wasteful rather than productive. The result is that each country’s export-financing agency makes the people of that country poorer than otherwise. Therefore, what you’re really complaining about is that the Ex-Im Bank’s capacity to impoverish the American people is well below that of China’s official export-financing agencies to impoverish the Chinese people.
You’ll forgive economically literate Americans for hoping that your request to lay more of your agency’s improvident hands on other people’s money falls on stone-deaf ears.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030