Boeing executives are being lauded for being the first out of the box to announce that at least some of the money they will save as a result of the passage of the Republican tax plan will go directly to their employees and will allow them to invest more into increasing the company’s manufacturing capacity in the United States.
It’s a nice public relations move and will be celebrated by the company’s employees as a welcome Christmas surprise, but it hardly represents much sacrifice from a company that has managed to demonstrate its Washington swamp dweller credentials by first lobbying Congress to save the Export-Import Bank, known to many as the Boeing Bank, and then rejecting a board nominee who might actually ask whether it makes sense to use taxpayers’ money to help finance Boeing sales to countries like Iran.
It’s a wonder, in fact, that there isn’t a Boeing logo next to the term “crony capitalism” in the dictionary. The company’s success in getting the federal government to act as its agent, protector and bank ranks the aircraft company right up there with Tesla, wind farms and ethanol producers as an expert-class crony capitalist. Boeing and 9 other U.S. corporate giants like General Electric soaked up more than 65 percent of all the bank’s benefits before Congress pulled the plug in 2015 by allowing the Ex-Im charter to expire.
At the time, the chief beneficiaries of the bank’s largesse whined that they would no longer be able to compete in international markets; a claim that has proven completely untrue. What the bank stopped doing for these corporate giants in 2015, was to eliminate the gravy that they and their customers could pass right through to their bottom line profits at the expense of other companies and the U.S. taxpayer,
Even when establishment Republicans and Democrats joined forces to renew the charter, Ex-Im lenders and underwriters could only operate at half speed because without a board quorum they were limited to loan guarantees and subsidies of 10 million dollars or less; prior to 2015 more than 86 percent of all Ex-Im deals were for more than that.
This made the bank’s products less attractive to the Boeings of the world and may have forced Ex-Im lenders to pay more attention to the “small” businesses they have always claimed to be a priority. As a result, President Trump agreed to appoint new directors who when confirmed would allow the bank to once again become fully operational.
The problem for Boeing and its cronies was that Mr. Trump seemed bent upon reform. One of his appointees was Scott Garrett, a conservative former New Jersey congressman with a real understanding of economics and the workings of the bank. Mr. Garrett had consistently sided with House Republicans who would have eliminated the bank entirely and vowed that if confirmed, he would work to reform it.
That outraged proponents of the way the bank has operated who saw Mr. Garrett as a real threat to business as usual in Washington’s swamp. They vowed to keep him off the board and last week as Congress voted to cut their taxes, they got their way.
The Senate Banking Committee rejected Mr. Garrett with two Republicans joining their Democratic colleagues to protect the big boys. South Carolina Republican Tim Scott, whose state hosts Boeing’s largest facility outside Washington State, joined that state’s Sen. Maria Cantwell to protect their favorite crony capitalist.
It was a warning to the White House that there are plenty of elected officials in both parties willing to fight to protect some of the worst swamp dwellers and it meant that Boeing got what the Mercatus Institute’s Veronique de Rugy, perhaps the most knowledgeable of the bank’s critics, has argued is a crony capitalist dream package; lower taxes and light regulation with “a side of government subsidies, cheap loans and government rents.”
Of course, the president could nominate someone in Mr. Garrett’s mold and make another run at reform while the bank’s critics in the Senate hold up less reform-minded nominees to keep the cronies at bay. That’s what Pennsylvania’s Pat Toomey and Alabama’s Richard Shelby have said they were prepared to do if bank supporters shot down the Garrett nomination, and if they meant what they said, the swamp creature may yet be tied down if not killed.
• David A. Keene is an editor at large at The Washington Times.