The Corner

Economy & Business

How Milton Friedman Predicted the Ex-Im Fight (and Boeing and GE’s Sense of Entitlement)

A few weeks ago I mentioned the temper tantrum of one of Boeing’s executive had about the prospect that the Ex-Im Bank, whose main beneficiary is Boeing itself, may expire this month. Boeing’s head of regulatory strategy actually suggested the company could leave the country if the federal government doesn’t continue to boost its profits. At the time, I noted that this shows how large corporations now think they’re essentially entitled to government handouts and have forgotten how capitalism works.

It turns out Boeing isn’t the only firm with this problem — General Electric does, doo. In an interview to the Daily Caller’s Peter Fricke, GE Aviation media-relations manager Rick Kennedy offered this:

Kennedy also claimed that GE’s overall growth is heavily reliant on expanding international sales, which now make up nearly 75 percent of its business. Many of those sales, he added, are made in cash-poor countries and other “places where getting an easy credit line is challenging,” forcing GE to rely on Ex-Im for financing that would not otherwise be available.

I see. So because GE wants to grow and its potential growth is outside of the country, it deserves a handout from the government. That’s a perfectly fine plan, but why should the risk of GE’s doing business in poor countries fall on taxpayers? Taxpayers are already on the hook for $140 billion in outstanding Ex-Im loans, on top of hundreds of billions in liabilities (trillions, actually) from other government-loan programs. It’s wrong, and it’s not wroth it.

Milton Friedman, no surprise, had it right long ago: “Paradoxical as it may seem, the biggest enemy of a free market system are the business community and the businesses that constitute it.”

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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