In theory, the U.S. Export-Import Bank exists to help American businesses both small and large sell their products in overseas markets by offering loan guarantees and alleviating credit risks. But in practice, nearly all of Ex-Im’s taxpayer-backed funds go straight to one company – Boeing. In 2009 alone, Boeing took nearly 90% – $8.4 billion – from the Ex-Im Bank, which of course is guaranteed by the full faith and credit of the American people.
It may sound like the kind of corporate welfare that actually helps a great American company, but that’s only half the story. By subsidizing Boeing’s foreign customers, the Ex-Im Bank actually puts U.S. companies at a competitive disadvantage, costing America jobs.
Domestic airlines, for example, lose out to foreign carriers like Air India because the latter can buy Boeing jets for cheap off of the Ex-Im’s dime. U.S. taxpayer dollars are spent overseas, with Americans’ jobs shipped closely behind.
But even more alarming is the comfy relationship that the Obama Administration has developed with Boeing.
President Obama is pushing hard for the reauthorization and expansion of the Export-Import Bank, which, as stated earlier, gives the vast majority of its dollars to Boeing. Lo and behold, we recently learned that Obama’s chief advisor, David Plouffe, used to make good money consulting for Boeing, as The New York Times revealed in an expansive profile this week.
Last week, President Obama delivered a speech at a Boeing factory in Washington State highlighting the company as a leader to bring “jobs and manufacturing to America.” And this week, Secretary of State Hillary Clinton embraced Boeing CEO James McNerney, Jr. in a similar fashion at a first-of-its-kind Global Business Confidence.
What will next week bring?
We’ve seen this kind of crony-capitalism from the Obama Administration before. When Obama fights for the Ex-Im reauthorization later this year, keep in mind that that the bank actually punishes domestic companies and that between his 2008 campaign and his re-election effort, his chief strategist was a consultant for the largest beneficiary of its taxpayer-backed loans and guarantees. The Obama Administration has a chance to reward its buddies at Boeing with the renewal of a multi-billion dollar checking account – after all, that’s how crony capitalism works and who better to direct it, but the president and advisor who won election railing against it.