Wednesday, December 09, 2015

Big River Steel Coming Just in Time For Collapse in Steel Market

I have been documenting for years how Crony Capitalism is a consistent failure for taxpayers. It does not matter which party is in charge, when they decide they are smarter than free market forces the taxpayers lose and the cronies win.

Two to three years ago I had to endure the claims of "conservative republican" legislators over the Big River Steel project. Somehow, this one was supposed to be worthy of support because it would "create jobs" and "help the Arkansas economy." All but a few sided with then-Governor Beebe and the Democrats to take a gamble and fund a steel mill with taxpayer dollars and money from the teacher retirement fund.

At the time we wondered why, if there was such a demand for more steel capacity, the private market did not step up and fund it? What did the politicians know that the people investing with their own money did not?

Now the money is about spent and the steel plant is nearing completion. It will enter production in an environment of collapsing world-wide steel prices due to a titanic over-supply of steel plants.

Congratulations losers, you blew it again. If this had been the first time crony capitalism wound up being a train-wreck, I could be more understanding. It's not. If their response to the legitimate criticism they are going to get when this thing loses money is sincere contrition then I will be sympathetic. History suggests that their actual response will be to play the victim and whine about how mean and "negative" all the people pointing out their repeated brain-dead mistakes are. We will see.

This kind of waste will not end until people decide to know history and learn from it. It won't end until they start listening to the people who have proven to be right instead of dismissing them.

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