A Massachusetts liberal who helped mastermind new legal restrictions from Congress that shook up Wall Street now sees reauthorization of the Export-Import Bank as a chance for Democrats to win back business leaders most affected by the regulatory changes he pushed.
In an interview with Huffington Post, former Rep. Barney Frank said extending the life of the federal agency could be a good way for President Obama and the Democrats to get back in the good graces of corporate elites:
A lot of the business people supported Obama in ’08 … and then we really pissed them off mightily with the financial reform bill.
That measure was dubbed the Dodd-Frank Act after Frank, then a House Democrat from Massachusetts, and cosponsor Chris Dodd, then a Senate Democrat from Connecticut.
Now, though, Republicans will have their own “serious problem” with big business interests, Frank suggested, if they follow the lead of House Majority Leader Kevin McCarthy, R-Calif., and don’t extend the charter of the Export-Import Bank, which expires Sept. 30.
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“I think this is finally starting to get to the business community now,” Frank said in the interview. “Part of this was the real significance of the defeat of Eric Cantor.”
Frank noted that Cantor, McCarthy’s predecessor in the No. 2 House leadership post, was a supporter of the Ex-Im Bank and had Wall Street connections. The Virginia Republican lost a primary challenge this summer and is leaving Congress.
Cantor, Frank said, was one of Goldman Sachs CEO Lloyd Blankfein’s “best friends in government” and Cantor’s wife “used to work” at Goldman Sachs.
“Some of the … business guys say, ‘OK, I don’t agree with [Republicans] on abortion and gay rights, but those aren’t the real issues. Their real issues are the economy.’ ” Frank said. He added:
And then Cantor loses and now Kevin McCarthy shifts his position on the Export-Import Bank.
But if McCarthy and conservatives such as Frank’s successor as chairman of the Financial Services Committee, Jeb Hensarling of Texas, succeed in convincing House Republicans to let Ex-Im’s charter expire, the Massachusetts Democrat said, they’ll have “a serious problem” with business leaders aligned with the Chamber of Commerce’s support for the bank.
The 80-year-old agency provides taxpayer-backed loans and loan guarantees to foreign countries and companies to buy U.S. products.
In the past, liberals argued the bank promotes corporate welfare, but many Democrats — including President Obama and Sen. Elizabeth Warren of Massachusetts — now say the agency helps small businesses compete in the global market and creates jobs.
Still, “old guard” liberals such as pioneering consumer advocate Ralph Nader and Rep. Alan Grayson, D-Fla., remain opposed to the bank.
Conservatives, meanwhile, argue that Ex-Im furthers corporate welfare and cronyism, as the bank benefits a few big companies such as Boeing, General Electric, and Caterpillar.
McCarthy, the House’s new No. 2 Republican, surprised many by speaking out in June against the agency, which some critics call the “bank of Boeing.”
Frank co-sponsored the 2012 bill extending the life of Ex-Im, which passed the House with Cantor’s push and was signed by Obama. Now, he says he “wished we lived in a world where there were no export subsidies.”
He told Huffington Post:
Let me put it this way. If I know that there were [government] subsidies being cut off to Boeing, I would recommend that people buy stock in Airbus. … As long as other countries subsidize their exports, we would be putting our guys at a competitive disadvantage.
Many business leaders may align with the Republican Party, Frank said, but they are in favor of subsidies such as those provided by Ex-Im and decried by lawmakers such as Hensarling and Sen. Mike Lee, R-Utah.