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Boeing lives by big government, dies by big government

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Boeing is not free to make its jets at the factory of its choosing, according to the National Labor Relations Board -- it must make them in Washington state, using union labor.

This extraordinary abridgement of economic freedom might suggest an anti-Boeing vendetta from President Obama, except that this administration's Export-Import Bank has subsidized Boeing with nearly $15 billion in loan guarantees in the past two years -- roughly three-quarters of all of Ex-Im's guarantees during that time.

This puts Boeing in an awkward position. The NLRB is surely overreaching in trying to block Boeing from making some of its 787s in South Carolina, a right-to-work state (NLRB calls this illegal retaliation against the machinists and aerospace workers union for its 2005 and 2008 strikes). In its effort to fight back, Boeing could be defanged by its reliance on big government. It's a cautionary tale for Obama's other corporate allies -- from the drug industry that benefits so much from Obamacare to the tech, agrichem, coal, and other industries that have benefitted from the president's corporatism.

Boeing and Obama, both based in Chicago, have a real political friendship. In 2008, Obama was by far the biggest recipient of campaign contributions from Boeing employees and executives, hauling in $197,000 -- five times as much as John McCain, and more than the top eight Republicans combined.

Boeing's lobbyists include some of Obama's closest allies. The Podesta Group, co-founded by Obama's transition director and John Podesta, represents the jet maker, with Democratic fundraiser Tony Podesta and former Obama campaign aide and administration official Oscar Ramirez as two of the lobbyists on the account. Linda Daschle, wife of Obama confidant Tom Daschle, is a longtime Boeing lobbyist.

When Obama began his export initiative, he named Boeing CEO Jim McNerney chairman of the President's Export Council.

And Boeing has pocketed even more taxpayer loot under Obama than it did under George W. Bush. Obama's export initiative has included ramping up subsidies from Ex-Im, and Boeing has reaped the benefits. In fiscal 2009, Ex-Im guaranteed $8.4 billion of loans to benefit Boeing, an astounding 90 percent of all of Ex-Im's loan guarantees. This past fiscal year, according to a recent annual report, Boeing won $6.4 billion in Ex-Im loan guarantees, 63 percent of the total.

In fiscal 2009, 2010 and 2011 so far, Boeing has received more than $45 million in government contracts. Documents made public by Wikileaks showed how much work U.S. diplomats do to persuade foreign leaders to buy Boeing jets for their state-owned airlines.

So now when the Obama administration kneecaps Boeing, bending labor law in order to benefit a labor union that gives more than 95 percent of its money to Democrats, Boeing is vulnerable. Can Boeing believably use free-market arguments to defend its right to build planes in whichever factory it wants?

Will Boeing executives fear the loss of some goodies if they fight too hard? Could McNerney lose his perch in the administration? Could Boeing lose a contract? Maybe its billions in Ex-Im subsidies would dry up.

If you think the Obama administration wouldn't play that sort of hardball, you haven't been paying attention. My Examiner colleague David Freddoso filled his new book, "Gangster Government," with example after example of this administration "us[ing] public office to make winners into losers and losers into winners" and 'bend[ing], break[ing] and mak[ing[ the law to help their friends and punish their enemies."

The Chrysler bailout provides the template. Obama threw out bankruptcy law and divided the company as he pleased. Some of the smaller creditors, who felt robbed by the decision to give most of the company to the Democrat-allied autoworkers union, objected -- and Obama publicly and privately retaliated. But most of the senior creditors didn't say a word. They couldn't, because they were Troubled Asset Relief Program recipients and in no position to stand up to the government.

In Boeing's situation, it's not only Uncle Sam who has leverage purchased with corporate welfare.

Washington state, Illinois and Chicago have given Boeing billions in favors. Do you think these Democratic governors wouldn't squeeze Boeing, too? Does anyone doubt the new mayor of Chicago, Rahm Emanuel, would play politics with Boeing's subsidies in order to help his old boss, Obama? (Of course, the disputed Boeing factory in South Carolina got hundreds of millions in state subsidies, too.)

Forever, business has been seduced by the promise of free money from government, along with regulation to clear out competition. Boeing has been the foremost among businesses partnering with Uncle Sam.

Now, the jet maker might see these government goodies come at a price -- sometimes chains.

Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com.

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