The Richest Aussie Lady Drains US Taxpayers
|April 19, 2014||Posted by Staff under Subsidies & Waste & Public Debt|
This 2014 excerpt of The Age, Mar 25, is by John Kehoe.
Australia’s richest person, mining heiress Gina Rinehart, secured a $US694 million ($764 million) loan from American taxpayers: what some see as crony capitalism.
There are 19 international lenders, including Australia’s big four banks, in the syndicate. Government export credit agencies including the Ex-Im Bank in the US, as well as Japan and Korea, were crucial in helping the massive debt-funding deal over the line.
Commercial banks and bond investors were reluctant to shoulder all the risk.
The US Ex-Im Bank says it “assumes credit and country risks that the private sector is unable or unwilling to accept”.
In return for the US government loan, Hancock Prospecting will purchase American mining and rail equipment from Caterpillar, General Electric, and Atlas Copco.
Caterpillar was being investigated by the US Senate for avoiding US taxes.
In 2008, an upstart senator named Barack Obama labelled the Ex-Im Bank “little more than a fund for corporate welfare”. The Obama administration now regards the agency as important.
Hancock Prospecting is not the only Australian company to benefit from America. QBE Insurance, the second-largest crop insurer in the US, has been a big recipient of federal crop insurance subsidies, which have tripled to about $US9 billion a year for the industry over the past decade. For every $US2 the government spends on crop insurance, $US1 goes to the insurance industry.
At the same time Republicans are voting to cut food stamps for the poor and unemployment insurance: personal welfare bad, corporate welfare good. Rinehart, the largest shareholder in Fairfax Media, which publishes The Australian Financial Review, criticized of personal welfare.
Ed. Notes: Cronies always pretend their fortunes come from succeeding in the market, not from lobbying in legislatures and fancy restaurants. Many people fall for the pretense and bundle capitalism with free markets. In reality, capitalism — that partnership of elite and state — could not survive in a freed market, a market freed from corporate welfare, taxes on wages, and — most importantly — the failure of society to recover the socially-generated values of land and resources. Those values — our spending for locations and minerals and the EM spectrum — those are the foundations of undue fortunes. Until we recover and share those values, we will continue to be plagued and depleted by the cronies called capitalists.