On the Sisyphean Task of Political Reform – A Case-in-Point. Et tu, Elizabeth?

Bypassing the usual casual introductions and general purpose statements, let’s get right to specific and substantive matters, shall we?

Almost no one in this country has ever heard of the Export-Import Bank (I’d bet the house that the demographic composition of respondents who answer affirmatively to having heard of it skews heavily to people in corporate finance – and to libertarians). In a nutshell, it is a financing agency within the executive branch, created by FDR during the Depression as one of a number of measures to try to artificially stimulate the economy with the alleged purpose of helping the nation climb out of the hole we found ourselves in. As the name suggests, its mission is to make strings-attached loans to other countries (or individuals/entities within other countries), with the chief condition of the loan being that it will be used to buy a specific good made/produced here in the US of A. Like most bureaucratic pipe dreams, the idea works wonderfully on paper: the bank (backed and funded in whole by the federal government, i.e., the U.S. taxpayer) makes loans to foreign agencies to purchase American goods and services. This generates demand for said goods and services, growing the economy and creating jobs here. Additionally, it proves to be revenue neutral, because, since the bank makes loans, it is money that will be repaid over time. No cost + creates jobs + bolsters GDP = what’s not to love?

A whole lot, it turns out. Like most bureaucratic pipe dreams, there are a host of negative (un?)intended consequences to this system, most of them being typical of Washington politics. I mean, would it really go any other way? What else would you expect when there is “free money” sitting in D.C. just waiting for a politically well-connected recipient to ask for it?

I could wax long indeed about the sheer idiocy of the very existence of this government agency, but I’d rather not continue to bore you with the complicated details of the shortcomings, inefficiencies, and inherent immoralities within an arcane subset of the federal government. Suffice it to say that it is emblematic of crony “capitalism” at its worst.

What with crony capitalism being one of the left’s longstanding and favorite critiques of business-as-usual in the country, and it becoming a new-found whipping boy on the right among the so-called “tea party” wing of the party, you’d think it’d be safe to assume that, with the Export-Import Bank’s charter expiring again in September of this year, Congress will take the chance finally to kill off this little part of leviathan. I mean, come on, the fellow who has referred to the Export-Import Bank as “little more than a fund for corporate welfare” just so happens to be the sitting President of the United States. In fact, since it was created by executive order, and is housed within the executive branch, it probably could be killed off legitimately by executive order – you wouldn’t even need to get Congress involved, and we know this president has prided himself on having a pen and a phone to take action where Congress seems unwilling to do so. And it would be an executive action that would probably draw bipartisan support (although I’m sure the right would find a reason to howl about it anyway, as is the nature of our political theater). You’d think, but you’d be dead wrong.

After all, we had a shot in 2012 of ending this madness. Instead of it closing up shop for good then, however, we were told that it was a vital piece of our record-breaking export economy. “Forget what we said before, people!” was, in essence, the message coming from the White House. Of course, with the “good guys” in power now, it couldn’t possibly any longer be a “fund for corporate welfare.” No, no, no! Actually, it’s a great thing, because with it, “we’re helping thousands of businesses sell more of their products and services overseas, and, in the process, we’re helping them create jobs here at home.” So it was with “great pleasure” that the President signed the bill re-authorizing this “fund for corporate welfare.”

(Brief aside: my favorite bit of the President’s remarks upon signing the re-authorization bill is towards the beginning, where he basically depicts this debate as being a part of the larger and more fundamental choice we as a country face, wherein “America can either settle for an economy where just a few are doing well and a lot of folks are struggling to get by. Or we can build the kind of economy where everybody is getting a fair shot and everybody is doing their fair share, and everybody is playing by the same rules.” It is amazing how, with a little sleight of hand, something that has been denounced as wasteful and cronyist by people of all political stripes becomes a tool to end inequality and make everything fair and level! The co-opting of language here is really worthy of further analysis, but I digress….)

I’d love to chalk this up to candidate sloganeering colliding with the realities of governance. Or to the naivete and/or hubris of thinking that the problem isn’t structural or with the system itself, but just with the inept and corrupt operation of things. Or even, more cynically, to the intoxicating effects of holding the reins of power that wear on conviction and principle over time and turn even the most potentially transformative of leaders into minions of the status quo.

But now comes this, hitting me right here at home. Sen. Elizabeth Warren – you know, that outsider populist first-term Senator from Massachusetts who is currently being drafted by the base of the Democratic party to run in 2016, the one who is billed as, among other things, self-proclaimed champion of the poor and enemy of greedy corporations, the one who came up with the idea of the Consumer Financial Protection Bureau and decries the various elements of our corporatocracy – well, she’s not who she appears to be, it seems (I’m shocked….). Heritage, a politically-conservative think tank in D.C., invited Elizabeth Warren to speak at a confab about ending the Bank. In their letter, they mention how “we, like you, are frustrated with a political economy that benefits well-connected elites at the expense of all Americans.” Sounds like a match made in heaven, one of these wonderful examples where people find themselves strange bedfellows over issues they have in common. Could even turn into a wonderful photo-op, where both sides get to tout their bipartisanship and willingness to reach across the aisle to work together with people of good will for the benefit of all.

Well, not so fast. “‘Senator Warren believes that the Export-Import Bank helps create American jobs and spur economic growth, but recognizes that there is room for improvement in the bank’s operations,’ Warren spokesman Lacey Rose tells us in an e-mail. ‘She looks forward to reviewing re-authorization legislation if and when it is introduced.'”  Ah yes, that populist leader whose single-issue platform is how corporations screw the little guy is apparently a fan of the inane bureaucracy that generates lavish and unnecessary subsidies for said corporations. Tell me, Senator, how do you suggest improving the operation of an agency that is dominated by the interests of gigantic multi-nationals who can single-handedly make or break any politician’s candidacy? At the least, you are demonstrating outrageous naivete. *Bangs head against wall*

From Reason: “Libertarians and Tea Party conservatives are noted opponents of the subsidy, which they see as crony capitalism that helps politically-connected businesses cheat the free market. Liberty-inclined Republicans are working with the left on a host of issues, including NSA spying and marijuana legalization—why not make common cause with Warren on corporatism as well?” Looks like the joke is on those of us who really do oppose crony capitalism and really do desire truly free markets.

Here’s what bothers me: She’s been in Washington for less than two years, and one would think that would not be enough time for the culture down there to steal a person’s soul. Granted, I do not believe she has been on the record before about this matter, but nevertheless, it seemed obvious that this would be a prime target for the Senator. But, I guess that niche was taken up already by those crazy tea partiers (and their inbred libertarian cousins), so Sen. Warren has to side with the administration on the matter and find the good in corporate handouts.

Here’s what bothers me: There are naive and (ironically) low-information political activists who produce nauseatingly obsequious and fawning praise pieces for Sen. Warren, and they probably have no idea that, despite all the pontificating about the evils of capitalism, she in fact supports “all the Wall Street bullshit, the lobbyist grifting.”

Here’s what bothers me: Someone like Sen. Warren gets the street cred for being anti-corporatist, but politicians who actually have the courage of their convictions, going so far as to stare down primary challenges on account of their principled stand, either get ignored or get treated like fringe outliers toxifying our political system.

So what does this say about our political system, when even the one hailed as the crusader against the evils of corporatism supports one of the most obvious and crony inlets for corporate corruption in the government? Well, in a word, it says that it sucks. More articulately, it indicates that the dynamic of political theater is more powerful than conviction and principle, and that duplicity is the chief virtue of the political class. The realities of governance are one thing – you could defend the President (had he not so ridiculously praised what he once denounced as corrupt and actively had a hand in extending it) for not wanting to expend the political capital on what arguably could be considered small potatoes. There is no defense for someone like Elizabeth Warren, who still is free to denounce all the excesses of Washington and deny any complicity in it. The fact that she finds something so demonstrably wasteful, inefficient, and cronyist as good is maddening, and, in addition, it is inexcusable, since she could – given her platform and political stance – denounce it without consequence. Then again, we shouldn’t be surprised, given that this champion of the poor and denouncer of runaway costs in higher education earned $350,000 teaching one class at Harvard.

Nevertheless, I ask: Et tu, Elizabeth?


  1. Even the best argument that a progressive economist like Paul Krugman can muster against ending the Bank is “It’s a bad time.” In his own words: “So you can claim that ExIm is mercantilist trade policy, and counterproductive. Against this you can make various strategic trade policy arguments, but the case for a special export lender is weak at best.” When this is the best case for a bureaucracy, it’s time for it to go.


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