Nine months will turn into nine years; Jay Cost describes the venality of the House GOP on the ExIm Bank.
Well, this was predictable. House Republicans last week acceded to an extension of the Export-Import Bank for at least the next nine months. The Export-Import Bank is far from the worst example of government-business cronyism. I just completed a history of American political corruption and actually had to leave Ex-Im on the cutting room floor. Its cronies are pikers compared with the corporate moguls that take advantage of tax preferences like the G.E. and Apple loopholes. They also cannot hold a candle to the American Medical Association, which is basically free to write the reimbursement rates for Medicare Part B. And nothing compares to Fannie Mae and Freddie Mac from 1991-2008. The two mortgage giants kept the entire D.C. political class bent over a barrel for almost 20 years as its top executives reaped enormous bonuses while putting the broader economy at risk.
What makes Ex-Im noteworthy is how narrow its coalition of beneficiaries is. With most modern corruption, you see some sort of logroll. The farm bill, for instance, ensnares not only dozens of commodity groups but also a vast array of interests that have seemingly little to do with agriculture. Similarly, Fannie Mae and Freddie Mac survived for so long by roping in realtors, primary mortgage lenders, and home builders, all of whom benefited from the same sorts of policies.
Ex-Im’s list of beneficiaries basically starts and ends with Boeing. This should in theory make it more vulnerable. Our perverse system of interest group pluralism tends to favor policies that rally multiple groups. Ex-Im does not really do that. Further, its economic justifications are slender indeed. On top of that, all congressional Republicans have to do is nothing; absent action by Congress renewing the bank, it disappears.
Ex-Im is the lowest of low-hanging fruit in the sprawling tree of American political corruption. And yet House Republicans cannot seem to pluck it.
Via Crony Capitalism Has Deep Roots: The Ex-Im Bank and the trouble with the Republican party.