How Australia's richest person, mining heiress Gina Rinehart, secured a US$694 million ($811 million) loan from American taxpayers is surely one of the great ironies of the capitalist system, reports The Australian Financial Review.
The case is the latest example of a flaw in the United States political economy: what some see as crony capitalism.
Rinehart's mining group, Hancock Prospecting, last week signed off on a $US7.2 billion debt package for her highly anticipated Roy Hill iron ore project in Western Australia's Pilbara region.
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. The Export-Import Bank says their involvement will "support" 3400 US jobs.
US conservatives have deep misgivings about the "corporate welfare" the Ex-Im Bank is dishing out, including to Rinehart.
Republicans against corporate welfare
Some Republicans in Congress, including Mike Lee, Jeb Hensarling and Justin Amash, are agitating to abolish the government bank and insurer when the agency's current charter expires on September 30.
A report last week that Caterpillar was being investigated by the US Senate for avoiding US taxes may add to debate about the firm benefiting from Ex-Im Bank.
Free-market political action groups such as Heritage Action are outraged that taxpayers have subsidised a loan for Australia's richest person and are propping up America's largest companies.
What would Ayn Rand think? Inspiration to free market capitalist thinkers and favourite writer of Gina Rinehart.
"Why are taxpayers subsidising a business deal between an Australian billionaire and titans of American industry?" Heritage's Dan Holler asks.
"If you have some sway in Washington DC, you can get financial terms that are backed up by taxpayers who will be 'on the hook' if something goes wrong," he adds.
In 2008, an upstart senator named Barack Obama campaigning for president labelled the Ex-Im Bank "little more than a fund for corporate welfare". Remarkably, the Obama administration now regards the agency as an important part of its drive to increase exports.
There has been a furious lobbying effort on Capitol Hill to retain the government bank, including by Caterpillar and aircraft company Boeing, its biggest beneficiary.
Proponents of Ex-Im Bank argue that without its existence, American firms would miss out on export opportunities and that projects, such as Roy Hill, would find it more difficult to secure finance.
This is code for the fact that some ventures may be sub-economic or too risky for private enterprises to support.
Ex-Im Bank also runs at a profit, supporters say. But that is beside the point. It creates an unnecessary distortion in capital markets by picking special winners.
The Ex-Im Bank's loan to an Australian billionaire, who is worth A$22b according to the 2013 BRW Rich 200 list, is symptomatic of a broader malaise in the US system. American policymakers and lawmakers appear captured by big business rent seekers, lobbyists and political donations.
Hancock Prospecting is not the only Australian company to benefit from America's, at times, peculiar capitalism.
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 US$9b a year for the industry over the past decade.
President Obama unsuccessfully tried to cut the insurances subsidies, which Paul Ryan, the Republican vice-presidential nominee in 2012, called "crony capitalism". For every US$2 the government spends on crop insurance, US$1 goes to the insurance industry, former US Department of Agriculture official Bruce Babcock estimates.
Similarly, Wall Street's big banks have also been caught with their paws in the government honey pot.
Their excessive risk-taking forced the government to step in with a US$700b rescue package during the 2008 financial crisis. They remain "too big to fail" and underwritten by taxpayers.
Mike Mayo, the high-profile and outspoken American bank analyst, says an important global export of the US, capitalism, is being tainted.
"I think we need a better version of capitalism," Mayo writes in his book Exile on Wall Street. "While it has the potential to raise people's standard of living and reallocate capital more effectively than any other economic system, it also has a lot of room for improvement."
Democrats and some Republicans want to retain Ex-Im Bank. A majority recently supported increasing crop insurance subsidies by US$6b over the next decade.
At the same time Republicans are voting to cut food stamps for the poor and unemployment insurance. There may be valid policy grounds for winding back these personal entitlements, but the hypocrisy beggars belief. It smacks of personal welfare being bad, but corporate welfare being excusable.
The irony is that Rinehart, the largest shareholder in Fairfax Media, which publishes The Australian Financial Review, has been one of the biggest critics of government intervention.
She sensibly argued last month for Australia to cut its "age of entitlement" mentality, invoking the free market reforms by former British prime minister Margaret Thatcher.
It's highly doubtful Thatcher would have supported a government bank for billionaires. If we really are to end the age of entitlement around the world, corporate welfare must be on the agenda.
- Sydney Morning Herald