And Now, Stimulus For Russia
Industrial Policy: Not only do taxpayers subsidize failing green energy here, they may soon be on the hook for a Department of Energy loan to a firm owned by a Russian billionaire. Just say nyet.
When a foreign firm wants to build a facility in the U.S. that hires American workers and pays American taxes, we welcome it. We'd prefer they do it with their own money, not rely on this administration's failed industrial policy to provide them with a huge taxpayer-backed loan — especially when it's owned by a billionaire who doesn't need the help.
The administration's latest green boondoggle is a $773 million loan for Severstal North America to expand and retool the old Rouge steel mill in Dearborn, Mich., to manufacture high-strength steel in a Rust Belt state badly in need of job creation.
The idea allegedly was to provide the high-strength steel needed to produce lighter, more-fuel-efficient cars as part of President Obama's touted Advanced Technology Vehicles Manufacturing program. It supports cars like the heavily subsidized Chevy Volt, built by the bailed-out Government Motors.
The problem is that this kind of steel is already being produced in sufficient quantities, including by Severstal. And the company getting the loan is owned by Russian billionaire Alexei Mordashov, one of the world's richest men with a net worth estimated at $19 billion.
As Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, wrote in a letter to Energy Secretary Steven Chu questioning the wisdom of the DOE loan: "It would seem to be a waste of taxpayer funds to subsidize (Rouge) when there is already more than enough production available for this material."
Another question is just when did a carbon-intensive industry's light steel become eligible for green energy loans? Surely the DOE knows that the old Rouge plant in Dearborn is powered by electricity from Detroit Edison's Motown coal plant. We thought coal was bad. Our guess is that the solar panels from stimulus loan recipient Solyndra didn't arrive before that taxpayer-funded scam went bankrupt.
So why the loan to a Russian billionaire? Well, Mordashov, ranked by Forbes in 2011 as the 29th wealthiest man in the world, is a friend of Vladimir Putin, who is a friend of President Obama. Mordashov was a delegate for Putin when he first ran for president in 2004.
The Rouge plant, which will provide 260 permanent jobs, will be represented by the United Steelworkers union in a state that's key to President Obama's 2012 re-election chances. He is less likely to carry South Carolina, a right-to-work state where Boeing, without government stimulus, wants to create at least a thousand jobs building its 787 Dreamliner passenger jet.