Egregious Ex-Im Bank Deal of the DayPosted by Staff on July 22, 2014
Why is Australia’s richest citizen – worth at least $18 billion – receiving loans backed by American taxpayers?
The Sydney Morning Herald calls it “the latest example of a flaw in the United States political economy: what some see as crony capitalism.”
Regrettably, “crony capitalism” is just what the Export-Import Bank does day-in, day-out: use hardworking taxpayers to finance crony deals for the powerful, the wealthy, and the well-connected.
Here are the deal details:
Australia’s richest citizen, billionaire mining heiress Gina Rinehart, secured a $694 million loan from American taxpayers thanks to Ex-Im’s support for the Roy Hill iron ore project.
Why are U.S. taxpayers involved? Because – as the newspaper reports – “Commercial banks and bond investors were reluctant to shoulder all the risk.”
If big banks and bond investors won’t take the risk, then why should American taxpayers be forced to?
Could this egregious deal get any worse? Why, yes.
Not only does Ex-Im risk taxpayers’ hard-earned dollars, Ex-Im’s financing of the deal also puts American jobs at risk. Four Democratic senators say the project will “substantially injure American iron ore and steel producers and their employees that are competing in the same global marketplace.”
Explains Senator Amy Klobuchar (D-MN): “My grandfather worked 1,500 feet underground as a miner, and countless other men and women in Northern Minnesota have worked hard providing iron ore to the world. It doesn’t make sense for our government to be funding our competition, especially when this project could have such a negative impact on local economies and the livelihoods of so many miners.”