Eric Cantor’s first job after losing re-election is a $1.8m job with a Wall Street firm. That’s not unusual.
Boeing is optimistic that the Export-Import Bank will be reauthorized, the New York Times reported on Sunday. Raymond Conner, the head of Boeing’s commercial-aircraft division, thinks that things are looking up for the “Bank of Boeing,” he says, because he thinks that the top corporate Ex-Im beneficiaries have “put together a pretty good coalition of businesses with solid support.” Rest assured: Boeing has brought the best political pressure that corporate money can buy!
The lobbying push to which he refers lies at the heart of the backlash against corporate welfare. The New Deal–era program that is the Ex-Im Bank is the quintessential example of the toxic marriage between big government and big business that too many have been willing to ignore for too long. The Bank’s most recent corruption scandal — replete with allegations of officials receiving kickbacks and bribes to steer Ex-Im assistance to favored firms — comes on the heels of at least 74 internal cases of fraud and corruption at Ex-Im since 2009, as Diane Katz of the Heritage Foundation revealed. The federal government’s own Government Accountability Office (GAO) has criticized the bank’s methodology for calculating job creation for not considering potential victims of the program (who do not have lobbyists or shiny K Street offices in Washington). Shockingly, the vast majority of Ex-Im’s portfolio directly benefits some of the wealthiest and most politically connected businesses in America and around the world.
There is no need to mince words. The support to which Conner refers comes from members of Congress, several of whom used to be firmly against the bank before they were fervently for it.
The most interesting allies of Mr. Conner and his big-business coalition these days are the Democrats. That’s right, the anti-corporate-welfare defenders of the little people are now the loudest voices in favor of Ex-Im corporatism. Forget about those exporters who have to compete with subsidized companies — often at the cost of their employee’s welfare, as a union leader passionately argued at a hearing on the bank — today’s Democrats are leading the fight in favor of subsidies for big business.
Nowhere were the Democrats for Ex-Im cronyism more vocal than at the hearing at which I testified back in June. Leading the charge was the House Financial Services Committee’s ranking member, Maxine Waters. To Waters, the corporate beneficiaries of Ex-Im privilege are not “crony capitalists” but average Americans. She kept pretending that the Bank was all about helping small businesses in spite of the facts that: (1) the data show that not only most of the money goes to propping up large companies (in fact, less than 20 percent of the bank’s portfolio valuation goes to small businesses, which is in violation of its own charter!); (2) the bank’s definition of small business is really a big business, since it includes companies with up to 1,500 employees; and (3) many of Ex-Im’s small-business success stories actually involve companies that were successfully exporting their products before the bank entered the scene.
So imagine my surprise when I found out yesterday that Mrs. Waters was at one time almost as loud of a voice against the Ex-Im Bank that she is for it today. That’s correct. Maxine Waters was against the Export-Import Bank before she was for it. Back in 2002, Waters had some rough words for the bank:
The purpose of the Export-Import Bank is to create American jobs for American workers. Unfortunately, the bank has a history of providing assistance to companies that have been exporting American jobs and hiring cheap foreign labor. For example, the Export-Import Bank insured a $3 million loan to help General Electric build a factory where Mexican workers will make parts for appliances that will be exported back to the United States. As a result, 1,500 American workers will lose their jobs to Mexican workers, who will be paid only $2 per hour.
She even supported (along with 111 other then-anti-corporatist Democrats) and voted in favor of a failed amendment offered by the vocal anti–Ex-Im congressman Bernie Sanders to radically reform Ex-Im in 2002. Here is what she said:
The Sanders amendment would ensure that the Export-Import Bank does not subsidize companies that are exporting American jobs instead of American-made products. I urge my colleagues to support the Sanders amendment. Mr. Chairman, many of us worked very hard on plant closure legislation just a few years ago because we found that after we gave great tax cuts right here in the United States under the Reagan administration that our companies were exporting jobs to third-world countries for cheap labor. That is after we had given big tax breaks. They took the money and put it in their pockets and exported the labor. We can stop that with this simple amendment. This will help out. I would ask my colleagues to support this amendment.
Nothing has changed except that now she doesn’t mind hurting U.S. jobs in the name of beefing up Boeing’s bottom line. She isn’t alone, obviously. When President Obama was just Senator Barack Obama, he called the bank “little more than a fund for corporate welfare.” And while the Sanders amendment received 111 votes from Democrats, this year some 201 Democrats sponsored a nutty proposal demanding that Congress reauthorize the bank’s charter for seven years and raise its lending cap to $175 billion.
[Names of said democrats are named, including “my”
weaselrepresentative, Brad Sherman] …
So what’s happening? I like the explanation given by David Sirota in Salon:
Meanwhile, Democrats are dropping their populist platitudes in favor of a chance to attract fundraising support from GOP-leaning business interests. As New York’s Democratic Senator Chuck Schumer told National Journal about his efforts to use the Export-Import debate to court cash from the Chamber of Commerce: “I’ve said this to [chamber President] Tom Donohue and others: In many ways mainstream Democrats are closer to you than many Republicans.”
But, then, as dizzying as all these opportunistic partisan shifts may be, what hasn’t yet changed is the power dynamic. If in fact the Export-Import Bank debate ends up with the same results as years past (read: no reform), then it will be a reminder that the corporate lobby still calls the shots in a principle-free legislative arena.
It will be a reminder, in other words, that Big Business is still able to shape party politics to make sure its permanent interests remain Washington’s permanent interests — regardless of what is the best policy for the country as a whole.
Sirota used to work for Sanders back in 2002, and he followed the issue very closely. I think he is a little harsh with Republicans who are advocating to remove the bank’s borrowing privileges at the Treasury Department, but I guess we will see!
The line between The Onion and reality is blurred even further.
What you need to know about the Federal Reserve in three easy to read charts. You want to address income inequality? End the Fed.
The tragedy of politics continues its long descent into farce before our feeds. The cracks become painfully apparent after just a few months of casually observing the dying capital’s peeling façade. Forget r and g for a bit. This is one vignette.
If carefully-branded clientelism and naked deception can be the stuff of comedy, then the Export-Import Bank is one of the biggest jokes in town. A twisted honor, considering the ample competition that oozes about the Demonpit of Columbia, but an accomplishment all the same. If all goes well with the upcoming reauthorization vote this September, the Bank will enjoy five more years of servicing the American public with a smile. What better time than their annual special interest soirée to reflect on some of their greatest hits?
Most people have not heard about the federal government’s export credit corporation. And why should they? It is only one of many of boutique federal programs that continue unabated in five-to-ten year increments quietly, with only perfunctory note. As a budget item, it is tiny. In recent years, to great fanfare, it noisily returned surpluses to the Treasury—a rare miracle for a federal program. Its pamphlets and boosters beam about “supporting U.S. exports,” “strengthening small business,” “creating U.S. jobs,” and “investing in green technology.” At a glance, the Bank appears to be the kind of benign, if not wholly necessary, federal program to which educated people reasonably give a pass. There are simply more pressing matters, the thinking goes.
Truth is, the Bank is little more than a publicly-subsidized piggy bank for large corporations. Through its menu of loan guarantees, direct loans, and insurance credits, the Bank marginally tilts the international playing field in its desired directions. Far from a bedrock of our economy, the Bank doles assistance to roughly 2 percent of all U.S. exports. Total reported exposure for its roughly 4,000 deals reached almost $120 billion in FY 2013. A disproportionate share of this assistance is funneled to well-connected U.S. and foreign corporations. General Electric, Caterpillar, Bechtel, and John Deere are big winners—as are most members of the aerospace-military-industrial complex.
It is crony capitalism, as opposed to free markets, that has led to the gross inequality in American society we have today. Cronyism for the super wealthy starts at the very top with the Federal Reserve System, which consists of topdown economic central planners who manipulate the money supply and hence interest rates for the benefit of the financial oligarch class. It then trickles down through lobbyist money into the halls of Washington D.C.,and ultimately filters down to local governments and then the average person on the street gaming welfare or disability.
As such, we now live in a culture of corruption and theft that is pervasive throughout society. One thing that bothers me to no end is when … Republicans focus their criticism on struggling people who need welfare or food stamps to survive. They have this absurd notion that the whole welfare system doesn’t start with the multinational corporations and Central Banks at the top. In reality, it is at the top where the cancer starts, and that’s where we should focus in order to achieve real change.
That’s where a new report from Open the Books on corporate welfare comes in. In a preview of the publication, the organization notes:
If Republicans are going to get truly serious about cutting government spending, they are going to have to snip the umbilical cord from the Treasury to corporate America. You can’t reform welfare programs for the poor until you’ve gotten Daddy Warbucks off the dole. Voters will insist on that — as well they should.
So why hasn’t it happened? Why hasn’t the GOP pledged to end corporate welfare as we know it?
Part of the explanation is that too many have gotten confused about the difference between free-market capitalism and crony capitalism.
And part of the problem is corporate welfare that is so well hidden from public view in the budget that no one has really measured how big this mountain of giveaway cash to the Fortune 500 really is. Finding out is like trying to break into the CIA.
Until now. Open the Books, an Illinois-based watchdog group, has been scrupulously monitoring all federal grants, loans, direct payments and insurance subsidies flowing to individuals and companies.
It’s an attempt to force federal agencies to release information on where the $4 trillion budget is really spent — and Open the Books will release a new report on corporate welfare payments to the Fortune 100 companies from 2000 to 2012.
Over that period, the 100 received $1.2 trillion in payments from the federal government.
That number does not include the hundreds of billions of dollars in housing, bank and auto company bailouts in 2008 and 2009, because those payments and where they went are kept mostly invisible in the federal agency books.
As suspected, the biggest welfare queens in the U.S. are the super wealthy themselves, but they’d rather you focus on some single mother on welfare simply trying to survive.
KRONIES ACTION FIGURES
This is fantastic.
Oldie but goodie.