Export-Import Bank Loan to Westinghouse Blocked
On Tuesday 28 June, Rep Bernard Sanders I-VT introduced an amendment to the foreign aid bill that would prevent the Export-Import Bank of the United States from lending $5 Billion to Westinghouse that is intended to finance the sale of nuclear reactors to China. The Sanders amendment to H.R.3057 was passed by a 313-114 vote. During the floor debate on this amendment, Dennis Kucinich provided some serious points for discussion.
1. Why should the US taxpayers provide the financial backing for a large company wholely owned by another enormous company that is owned by the British government? (That was a contorted sentence; my excuse is that Westinghouse’s current parentage is also contorted.)
2. Is it a good use of Export Import Bank funds to subsidize prices for a country with the extensive financial resources that are currently controlled by the Chinese government?
As a former manufacturer (in one of my lives, I was the General Manager for J&M Industries, a small company that produced toys, boat parts, kitchen supplies and disposable medical products using plastic injection molding machines) that struggled to compete against products that were made by companies that paid skilled laborers about $20.00 per week, I have one more question.
Is it a good idea for the US taxpayers to use their money to enable Chinese manufacturers to gain additional manufacturing cost advantages over US manufacturers by helping them learn how to build nuclear power plants?
Think about it. The main cost component of electrical power from nuclear power plants is the capital cost of the plant. A major portion of that capital cost is the cost of labor including both manual and intellectual labor, both of which are available at a far lower cost in China.
As I understand it, the deal that Westinghouse is competing to win requires them to transfer a large portion of their technology and requires them to train Chinese laborers to perform the tasks needed to build the plants. Once the knowledge of how to build the plants is transferred, it is a no brainer to understand that future plants will cost a lot less to produce in China than they will in the United States.
Once China is building nuclear plants inexpensively, they will build a lot of them; providing them ready access to the absolute cheapest form of abundant, controllable electrical power on the planet. Their ability to use that power to mass produce steel, concrete, plastic products, microprocessors, and a host of other energy intensive products will overwhelm the ability of the rest of the world to consume them, driving prices ever lower.
Some people may think that is a great thing, but I do not like the implications for the ability of hard working people in free countries to continue to be gainfully employed.
Please do not misunderstand me. I think it would be great if China replaced their dirty coal burning power plants with machines that produce power by fissioning uranium. I just do not like the idea of enabling the centralized government to have cheap access to the intellectual property built up by decades worth of education and experience – much of which was provided at US taxpayer expense – so that it can continue to increase its ability to pay people to look the other way with regard to the way that it governs and treats its people.
Instead, I would prefer if western companies struck more favorable deals that better protected that intellectual property and captured higher prices for their valuable skills. The best way to enable that to happen would be to ensure that there are sufficiently welcoming markets for nuclear power plants right here at home. A seller’s market for atomic power plants would prevent companies from virtual drooling at the prospect of selling off their future to the centrally controlled Chinese government.
