POLITICS AS USUAL

Eric Cantor was a big man in the House of Representatives. A Republican, he had represented his district in Virginia for many years. A hard worker, his influence as well as seniority grew. He was #2 in the House. Majority Leader.

He was considered unbeatable. A non-entity by the name of Brat was running a primary against him for the Republican nomination. Brat was a Tea Partier of the first class.

Cantor thought his seat was secure. He did not campaign that hard. He was a 40 percent favorite in the polls. He had raised millions of dollars to finance his reelection campaign. So secure did he think he was, that on election day Cantor was not visiting the polling places in his Virginia district. Instead, he was at a corporate fundraiser in Washington, D.C.

His opponent Brat had only raised $200,000. 

Cantor was decidedly to be the winner. He was not. He lost. Got his ass whipped. by 11 points.

Cantor lost because he forgot all politics is local. He did not spend enough time with his Virginia constituents. He forgot the Rotary lunches, school events, etc. He had become a big man. He was Majority Leader.

Brat hit hard in the campaign that Cantor was the tool of big business, that he favored special tax credits to billionaires instead of taking care of normal folks.

Brat was correct. His message got across. Cantor lost.

The day after the election, Boeing's stock tumbled. It dropped six points in a week. Though a big company, Wall street questioned Boeing's viability with Cantor not in office. Cantor was Boeing's biggest benefactor in Washington.

Boeing sells airplanes. To foreign purchasers. In big numbers. These deals have to be financed.There is a United States agency known as the Export-Import Bank of the United States (Ex-Im Bank). Ex-Im Bank makes loan guarantees and/or insures foreign purchases. The long and short of it was that Boeing could make a deal to sell planes to a foreign country and the financing was easily/already arranged via the Ex-ImBank. Makes business a hell of a lot easier to do.

In 2012, 82 percent of Ex-Im Bank's loan guarantees went to Boeing customers.The amount involved was $11.6 billion.

Boeing knew who their man in Washington was. Boeing was the biggest fund raiser for Cantor's primary campaign. $5.4 billion. The largest contributor  was Goldman Sachs. Cantor's wife works for Goldman Sachs. She also works for another bank, the New York Private Bank & Trust.

Boeing and Cantor were joined at the hip. No question about it. Married. Dependent on each other.

The Em-Ix Bank has to be authorized every three years by Congress. It was last authorized in 2012. It has to be authorized shortly for a new three year period beginning in 2015.

Cantor carried the ball for Boeing. His position as Majority Leader gave him great clout. Boeing was confident the Bank would be reauthorized. So was Wall Street.

Cantor is no longer the big man, however. Within days of losing, he resigned his position as Majority leader, effective as of a day certain. A new Majority Leader was elected. Kevin McCarthy, Republican of California.

McCarthy had supported the Ex-Im Bank's re-authorization in 2012. He announced however that he was not supporting it this time around. He said the private sector could handle the problem. The government was not required. Probably so. However from Boeing's perspective, why have its foreign purchaser go out and negotiate a loan when the United States could in effect provide for it easily.

McCarthy's change of heart did not come about because he thought non-authorization was the correct thing to do. It came about because he wanted to be Majority Leader. In order to be elected, he needed the support of Tea Party members in the House. A condition of their support was his not supporting authorization.

Tea Party members viewed the Ex-Im Bank as a form of corporate welfare. It was. They also viewed it as corporate cronyism. It was.

The Ex-Im Bank was Boeing's piggy bank. Without it, Boeing will survive. However, life will be a bit more difficult, deals a bit laborious to finance. That is why the stock market is concerned about Boeing. Some analysts even talk in terms of Boeing's viability. A life or death scenario. I doubt it will come to that.

It has been said truth is stranger than fiction. In this situation, it is. Who could have conceived of a plot involving a major political figure, untouchable, could not be defeated, who is defeated by an unknown. Add to it a major international corporation who is now facing economic problems because of the loss of the political leader who greased its way in Washington. Wall Street becoming nervous. Throw in the politician's wife who works for one of her husband's largest financial contributors. Top it off with the defeated leader being replaced with a man who does not support the underpinnings of the major corporation.

It happened.

I close with a question I have been raising of late. What happened to government of the people, by the people, for the people? Especially the .....for the people part.