America’s Imperial Bribery

AEI (neocon central) scholar Tom Donnelly is making the case for expanding the Ex-Im bank (against tea party wishes) to, in this case, use U.S. taxpayer’s dollars to subsidize Boeing airplane purchases for the United Arab Emirates. Sound a little fishy to you? Cato Institute director of foreign policy studies Justin Logan explains that cheap loans from Ex-Im act as bribes in order to help the United States pursue its foreign policy goals.

Donnelly’s way of thinking is pandemic across the American foreign policy community. From Poland to Japan to the UAE, our foreign policy elites warn that our allies, partners, friends, and clients have options and may go elsewhere if we don’t bribe them to stay attached to us. And when they do, bad things will happen to us.

But this gets the equation exactly backwards. Every American ally needs us far more than we need them. Failing to act like it allows them to manipulate us into playing the role of Uncle Sucker: a patsy who is willing to shower largesse onto our allies in exchange for the privilege of protecting them. Or to try another metaphor, America ought to play hard to get rather than throwing herself at every prospective suitor.

Donnelly offers one other argument about Ex-Im: to him the problem is that it doesn’t finance arms sales. While this innovation marginally would benefit American arms manufacturers—American weapons are plenty appealing unsubsidized—it’s unclear how it would benefit Americans. Indeed, Donnelly says nothing about why this is a problem, other than to refer to conservative appreciation for “the strategic value of money,” which is indisputable but undefined in the context of the 2014 Ex-Im Bank. He suggests that the British Crown could have staved off the American revolution had it subsidized the Colonies more heavily, pointing out the heavy subsidies paid by London to hold together its empire. (To which one might respond that if Britain hadn’t been frittering at the edges of its Empire, it could have been better positioned to prepare from the threat posed twice by a rising Germany. Talk about a “somewhat shortsighted policy”…)

In a more general sense, though, the Ex-Im debate is a smaller analog for the grand strategy debate Donnelly would rather avoid but the country needs. The Ex-Im Bank transfers money from taxpayers to a small group of favored companies and countries. Its costs are dispersed across a broad enough group of Americans that it rarely gets attention, but when it does, it’s tough to defend on the merits. Similarly, US grand strategy is enormously costly and wasteful, but because of the country’s wealth and security, rarely has to be defended. One of the benefits of relative austerity is that it produces debates about scarce resources and can help hard decisions to be made. So we should hope that foolish policies like using the Ex-Im Bank to subsidize Emirati aircraft purchases and the broader imperial project such bribes support both come in for an unsparing assessment.