Critics on the left and right – ranging from self-proclaimed socialist Senator Bernie Sanders to the editorial page of The Wall Street Journal – have argued that politics can play an alarming role in the decision making process. Ex-Im’s Fiscal Year 2013 Advisory Committee includes Christine Gregoire, governor of Washington, where the company was founded, and Owen Herrnstadt of the International Association of Machinists and Aerospace Workers, which is the chief union that engages in bargaining with Boeing and represents tens of thousands of its workers. Is it any wonder Ex-Im has been dubbed “Boeing’s Bank”?
So far the clues to an answer are not encouraging. More than 4 out of 5 dollars Ex-Im backed in 2012 went to one company: Boeing.
5) How has Ex-Im addressed criticisms that by helping to underwrite loans for firms like Boeing, which sells to foreign airlines, the institution is attempting to pick losers and winners in the marketplace? As far as aircraft go, the losers are often U.S. air carriers, one of whom complained that Ex-Im’s practices cost the domestic airline industry up to 7,500 jobs and $684 million per year.
There are at least a dozen more questions that should be asked on behalf of taxpayers, not just in hearings like the one held yesterday but every day programs like Ex-Im are allowed to perpetuate. Ultimately, however, Ex-Im’s biggest quandary is this: to prevent a massive taxpayer bailout, the Bank must often balance its portfolio by financing established companies that are already highly profitable in the first place, which only discourages the very same new entrants to the export market that U.S. policymakers hope to entice. (Or worse, the practice encourages those prospective entrants to visit Washington with an outstretched hand).
Yesterday leaders on both sides of the microphones – Fred Hochberg and his Senatorial inquirers – took rhetorical stabs at the issues of reforming Ex-Im. But much more than words will be needed to follow through on the modest transparency and accountability overhaul Congress called for in the bank’s reauthorization last year. In fact, while we’re on the subject of words vs. deeds, maybe Congress could go one better than disclosure requirements and just wind down Ex-Im altogether, as Rep. Justin Amash (R-MI) proposed through legislation in 2012. Until then, that giant grinding sound you hear coming from the gears of Washington’s corporate welfare machine will continue. And you’re along for the ride.
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