by Veronique De Rugy | March 10, 2016 12:02 am
Democratic presidential candidate Bernie Sanders is one of a kind. He is the only self-proclaimed socialist in Congress, and he is also the only Democratic candidate in the presidential race to oppose crony programs such as the Export-Import Bank of the United States. Hillary Clinton, a big supporter of the bank, and Sanders clashed quite vigorously on the issue during the recent presidential debate in Flint, Michigan.
The Export-Import Bank is an outfit that mostly extends loans to powerful foreign companies in exchange for buying products from large and well-connected U.S. companies. As Sanders asked Clinton, “Do you know what the other name of the Export-Import Bank is, what it’s called in Washington? It’s called the Bank of Boeing because Boeing itself gets 40 percent of the money discharged by the Export-Import Bank.” Sanders is right.
Moreover, close to 70 percent of the bank’s loan guarantees benefit Boeing alone. In spite of what most Democrats in Congress try to argue, the Ex-Im Bank is indeed in the “big business” business, with about 65 percent of its activities benefiting 10 domestic firms. The same is true for the bank’s beneficiaries abroad. The Ex-Im Bank’s own data show that such wealthy companies as Mexican state-owned oil giant Pemex and the airline Emirates are the top beneficiaries of the U.S. taxpayers’ largesse.
You would think that this is exactly the kind of program that Democrats would oppose because it’s a shameful giveaway to large corporations that don’t need it — though you would be wrong to think that. This wasn’t always the case, but today only two Democrats in Congress oppose this corporate boondoggle: Sanders and Rep. Alan Grayson, D-Fla. The remaining Democrats hide behind the fact that 20 percent of the bank’s financing benefits “small” businesses (defined as a company with up to 1,500 employees and $21.5 million in revenue) to justify their support for the bank. In other words, they’re perfectly happy to carry water for big corporations as long as they can claim that a few smallish companies benefit, too.
Clinton’s support for the Ex-Im Bank may be more straightforward — and a beautiful example of what cronyism is about. In April 2014, The Washington Post reported that while serving as secretary of state, “Clinton functioned as a powerful ally for Boeing’s business interests at home and abroad, while Boeing has invested resources in causes beneficial to Clinton’s public and political image.”
How much are we talking about? Clinton negotiated a $2 million deal with the aerospace giant to host a pavilion at a world’s fair and then delivered a $3.7 billion aircraft purchase deal between Boeing and the Russian government in 2010. Shortly thereafter, Boeing announced it would contribute $900,000 to the Clinton Foundation.
Then there’s the fact that Boeing’s senior vice president for government operations, Tim Keating, worked for the Ready for Hillary super PAC along with, in the words of Time’s Mark Halperin, “an array of well-connected Democratic lobbyists and politicos.” But make no mistake; she is well-connected at the Ex-Im Bank, too. In fact, the head of the bank, Fred Hochberg, whose connection to the Clintons is well-documented, has been campaigning on behalf of Hillary Clinton. This “scratch my back and I will scratch yours” mentality is way too common in Washington between large companies and politicians. Unfortunately, while the exchange is mutually beneficial for Clinton and Boeing, the Ex-Im Bank is of no benefit to the thousands of unsubsidized companies and millions of workers who are left to face this unfair competition.
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.
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