by VERONIQUE DE RUGY at The National Review
When has crony capitalism really gotten out of control? How about when a major U.S. corporation (a huge defense contractor, no less) is publicly threatening government officials to leave the country if the federal government doesn’t continue to boost their profits through government handouts:
Boeing is stepping up pressure on opponents of the US Export-Import Bank with threats to shift manufacturing abroad if the agency that finances purchases by foreign customers is killed off next month.
The threats come as a new push is being made in Congress to find ways of wresting reauthorisation of the bank from a committee controlled by one of the agency’s fiercest opponents.
Scott Scherer, Boeing’s head of regulatory strategy at Boeing Capital, said the aerospace and defense group would “not sit idly by” if the ExIm Bank’s mandate was not renewed by the end of June. “Boeing is not going to let itself be hurt by the lack of an ExIm Bank,” he said in an interview with the Financial Times. “If it means sourcing … to other countries who will support us we may have to look at that. Other countries have more aggressive export policies. We will find an alternative.”
First, let me state the obvious: This basically sounds like blackmail to me, and I don’t think lawmakers should look at this kind of behavior favorably. Second, it’s time for Boeing executives to understand that it’s not the role of the federal government to guarantee that they can sell as many planes as possible — they’ve benefited from the U.S.’s relatively free-market system; they should have to live with it. And finally, I don’t think Boeing’s threat is very credible. Will Boeing really pick up its factories and move abroad if Ex-Im isn’t reauthorized? Is the possibility other governments might subsidize it really worth the transition costs and the risks of losing billions in defense contracts?
Thankfully, Jeb Hensarling, chairman of the House committee with jurisdiction over Ex-Im, called Boeing’s bluff:
The Republican chairman of the House Financial Services Committee rejected reports that Boeing Co. or other companies might move production overseas if Congress doesn’t reauthorize the U.S. Export-Import bank.
“I doubt I believe it,” Representative Jeb Hensarling of Texas said at a Washington press conference Tuesday about whether failing to extend the bank’s charter would drive major corporations out of the U.S. “I think it’s frankly a bit of bluster.”
Boeing, based in Chicago, might move some manufacturing overseas if Congress doesn’t extend the bank’s charter beyond June 30, the Financial Times reported May 17. It cited an interview with Scott Scherer, head of regulatory strategy at Boeing Capital.
Hensarling said he and others who oppose reauthorizing the Export-Import Bank are trying to “lead the party in a new direction” that will give priority to free enterprise over individual business interests.
Letting the Ex-Im Bank’s charter expire will go a long way to show that Republicans understand the difference between being pro-business and being pro-market — even if Boeing doesn’t.