On Ex-Im Bank, Boeing not a big fan of Jeb Hensarling

posted at 5:31 pm on July 26, 2014 by Jazz Shaw

This week, Congressman Jeb Hensarling (R – Texas) penned a letter to the President asking why the Export-Import Bank should still be doing business in Russia, given all the problems that Vladimir Putin is causing these days. These seem like two rather unrelated issues, but Hensarling shows how they are actually closely related.

Hensarling1

Boeing decided to respond with a letter of their own (inserted below), posted directly to the Congressman. They were none too happy, and went to great lengths to explain why the Ex-Im Bank is so important, how there is so much bipartisan support for continuing it, and how terrible it would be if some of their customers went to Airbus instead of them for their purchases. The interesting thing about the Boeing letter is not so much what’s in it as what’s missing. The word Russia does not appear once in the entire text.

Here’s the letter in full.

Hensarling Letter on Ex-Im and Boeing

This is a question of private business rather than government policy, so in the end it’s really up to Boeing whether or not they choose to facilitate business for Russia. But by the same token, everyone else – including prospective customers – can take that into account as well. This is, however, another one of those cases of politics and strange bedfellows. It turns out that Boeing has a PAC of their own, known as BPAC. They spread quite a bit of cash around in political circles, too. I wonder if they will be planning to expand on the combined nearly $10K they donated to the Friends of Jeb Hensarling in 2012 and 2013?

Oh, and in the meantime, the House has subpoenaed former Export-Import Bank official Johnny Gutierrez.


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Just follow the international money and big banks. There is the real money fueling the worlds politics,,not to mention scumbags like Soros.

retiredeagle on July 26, 2014 at 5:41 PM

“Houston We Have a Problem!” All these members of U.S. Chamber of Commerce are causing problems for Americans. You can now put BOEING on the Black List.

Nat George on July 26, 2014 at 5:49 PM

Reads like Boeing has a lot to lose by not having the Ex-Im Bank reauthorized. Transactions by this program are meant to assist and support American small businesses, not vast, global corporations.
.
What’s their real concern, here?

ExpressoBold on July 26, 2014 at 6:02 PM

Few corporations have benefited more from crony capitalism or corporate welfare than Boeing. A few years back Boeing received a contract for a $2 billion virtual border security system. It was a bomb. For Boeing it was a $2 billion sale. For the taxpayers it was a $2 billion hosing.

bw222 on July 26, 2014 at 6:02 PM

The Ex-Im bank is just another way for Politicians Worldwide to launder money, nothing more, nothing less.

Johnnyreb on July 26, 2014 at 6:15 PM

There is a reason that Boeing moved to Chicago. Yes a rather large reason.

jukin3 on July 26, 2014 at 6:44 PM

Um, it looks to me as though Hensarling wrote two (at least) letters this week. One to Obama, and another to Boeing. While they were likely both in reference to the Ex-Im Bank, the one to Boeing may well not have referred to Russia, in which case there would certainly be no reason for the return letter from them to mention it either.

This post seems to be mistaken.

Texastoast on July 26, 2014 at 6:53 PM

Cronies coming out of the woodwork. The plot thickens…

vnvet on July 26, 2014 at 7:29 PM

I actually disagree with all the shouting about shutting down Ex-Im. Quite bluntly, without something like that our export sector will be absolutely hammered by the competition, all of whom are blatantly government funded without even the pretense of loan guarantees and such. Ex-Im allows companies that make low-volume high-value capital items like jetliners to compete with foreign manufacturers.

Do please note that no small business *can* make something like the 777 or 747, the entire workforce of an average ‘small business’ would barely be enough to assemble one wing, let alone the entire jetliner. These are big-ticket items that require substantial workforces to build and rely on capital financing to sell. The simple fact is that Boeing *cannot survive* competing against Airbus without Ex-Im, because Airbus receives absolutely massive subsidies that dwarf everything Ex-Im provides.

If there was some way to give the WTO enough teeth to kill the massive Airbus government subsidies, at that point Boeing would be well able to compete on an even playing field without Ex-Im, until then we need something like Ex-Im merely to level that playing field and keep ourselves in the game.

Note that Boeing does relatively little business with Russia, most Russian airlines use either domestically sources aircraft or Airbus craft. I believe this letter was in response to one sent directly to Boeing from Rep Hensarling (indeed if you read the letter it talks about receiving a letter direct from him, whereas the one about Russia was sent to the White House, not Boeing).

Edunai on July 26, 2014 at 8:15 PM

If there was some way to give the WTO enough teeth to kill the massive Airbus government subsidies, at that point Boeing would be well able to compete on an even playing field without Ex-Im, until then we need something like Ex-Im merely to level that playing field and keep ourselves in the game.

Edunai on July 26, 2014 at 8:15 PM

You can try to prop up the old system for as long as you can, but it’s doomed. This game draws near it’s conclusion.

DFCtomm on July 26, 2014 at 9:55 PM

Unfortunately it’s the only system we’ve got. In an ideal world we could get rid of Ex-Im and the EU would stop subsidizing the hell out of Airbus, but this is the real world, and unfortunately they won’t.

Unilateral disarmament, whether in trade or defense, never ends well.

Edunai on July 26, 2014 at 11:10 PM

If there was some way to give the WTO enough teeth to kill the massive Airbus government subsidies, at that point Boeing would be well able to compete on an even playing field without Ex-Im, until then we need something like Ex-Im merely to level that playing field and keep ourselves in the game.

Edunai on July 26, 2014 at 8:15 PM

You can try to prop up the old system for as long as you can, but it’s doomed. This game draws near it’s conclusion.

DFCtomm on July 26, 2014 at 9:55 PM

I agree with DFCtomm. These companies are NOT interested in leveling any damn playing fields. They want to make as much money as they can, by hook or by crook.

Greed in a truly competitive free enterprise environment is awesome. You can be as greedy as you want, but if you don’t make the right decisions, market the right product, treat your employees and customers fairly and so on…you’ll fail. If you’re greedy and succeed and expand and create more wealth, you benefit your country.

But greed at these levels long ago became international. They’ll sell out the best interests of the U.S. without much thought. We’ve seen that over and over again.

As for Airbus subsidies-the Europeans subsidize a lot of things because we spend an enormous percent of our GNP on defense, and in term shield them from harm. They (and some Asian countries like Taiwan, South Korea, and Japan) can spend waaaay less on defense so of course they have more they can subsidize mass transit, health care, and industry.

But how long we can keep supporting them in the manner to which they’ve become accustomed is anyone’s guess…we’re BROKE and deeply in debt. Oh, and so are they BTW.

Dr. ZhivBlago on July 27, 2014 at 4:14 AM

Edunai on July 26, 2014 at 8:15 PM

The Ex-Im bank is not a subsidy. They guarantee loans. To hear some of its defenders talk, it makes a profit doing so. If that is the case, US banks will be lining up to get in on the action once the Ex-Im is closed down.

Occams Stubble on July 27, 2014 at 7:21 AM