Monday, June 30, 2014

Why the War Party Loves the Export-Import Bank

The other day Rep. Brad Sherman (D-Boeing) was railing against "unilateral disarmament" and declaring "I haven’t heard that kind of talk since the days of George McGovern," or words to that effect. Was he talking about our nuclear policy, or perhaps the revived war in Iraq?

Nope. He was on the John Stossel show defending the Export-Import Bank, and his attack on "McGovernism" was in reference to efforts aiming at its abolition.

The Ex-Im Bank’s alleged mission is to promote foreign trade: it does so primarily by loaning money directly to foreign governments (or foreign-owned companies) to enable them to buy American products, and by insuring – guaranteeing – loans. Established by Franklin Roosevelt’s executive order in 1934 specifically to subsidize trade with the Soviet Union, and later Cuba, in both cases the administration sought to use financial leverage to advance its foreign policy goals: lending support to the Soviet Union and the Cuban dictatorship of Juan Batista.

Over the years the agency expanded – like all government programs – and eventually became what amounts to a massive slush fund for the politically connected corporate elite. Among its biggest "customers" are Boeing, Lockheed Martin, and Halliburton – all, not coincidentally, charter members of what Dwight Eisenhower deemed the "military-industrial complex."

I point out this confluence because until recently the Ex-Im Bank was a major fulcrum for arms deals involving US allies unable to afford the expensive arms purchases involved in fulfilling their duties as instruments of US foreign policy. And in the face of a libertarian offensive in Congress against Ex-Im’s reauthorization, the War Party is coming out in favor of not only keeping but expanding it to revive its former role as a clearinghouse for arms deals and loans to foreign despots.

In a piece for the American Enterprise Institute, that bastion of "free market" thinking, defense analyst Tom Donnelly – formerly chief of strategic communications at Lockheed and a big honcho over at Bill Kristol’s Project for a New American Century – starts out his pitch for keeping Ex-Im with a telling phrase: "Corporate welfare in the defense of liberty is no vice." Mourning the defeat of House GOP majority leader Eric Cantor – one of the Bank’s biggest shills – and bemoaning the stated intent of the new Leader Rep. Kevin McCarthy to oppose reauthorization, he writes: