No nation was ever ruined by trade. – Benjamin Franklin
When I first heard about the plan for the Dubai based operation to own and operate the seaports, I had an immediate negative reaction. Then I saw Chuck Schumer come out in opposition to it. Chuck, you see, is my rabbit test on whether the idea has merit or not. The rule is if he doesn't like it, it's probably a good idea.
Generally, the best approach is to go with the side of free trade. We whine all the time about a trade deficit with the oil countries; and then when one of them wants to reinvest in our country, and bring our dollars back home, we question the deal, obstruct it, vilify it.
Like any private concern (at least one looking to make a favorable business transaction), the interest in this deal after all the political piling on will quickly dissipate. Dubai doesn't need this hassle. They can go invest in another port in China, Australia, or India. I wouldn't blame them a bit if they just said "Thanks, but this isn't worth it".
The bigger issue is what are we going to do to allow Arab countries access to the mainstream of our economic world. If we don't do it soon, then we are pretty hypocritical about our wish to export democracy. Disallowing this type of investment is ultimately akin to keeping minority home buyers out of white neighborhoods.
I remember being a little upset about the Sears tower purchase by the Japanese, followed by the Augusta golf course. Then a friend pointed out that they are not going to move these. They are still our landmark.
Those who cite security issues must understand that freedom has to be given the chance to prevail. Otherwise, we will wind up without security or freedom.
5 comments:
At what point does selling assets turn into ceding control? Logic suggests that there must be a tipping point, but who can say where it is?
The Iron Law of Monopoly holds that if you have the deeds to all the red properties and orange properties, you will win the game.
You will win the game.
It is only a question of when.
At the end of 2005, China held about $819 billion in American assets, mostly in Treasury debt. Only Japan held more, with $829 billion. Because East Asians will hold both the red and the orange properties, our kids will work for them.
I've nothing against East Asians (or West Asians like those who live in Dubai), but tell me, how exactly do our kids benefit from that arrangement?
Financial control of the terminals would naturally transfer immediately. This doesn't have any obvious impact on port security, which would stay the same -- or more likely become more intense -- because of the political landscape.
If someone were of a mind to sabotage our ports, they wouldn't spend 8 bil to do it. So, these folks are not the threat. It only gets worse if we block legitimate investment.
The 8 billion dollars being invested are put to work in other areas benefitting the previous owners. Obviously they made their money, and are free to reinvest in other American interests (assuming we have something to offer). Meanwhile, the company buying the asset has ideas on how to improve the efficiency of the port so that they can make their money back. This benefits those people who have any vested interest, including longshoremen, and the retail infrastructure servicing the port area.
If we didn't get some of our dollars back in this way, we'd soon run out of dollars to buy UAE oil with. So, free trade is the only way to obtain any real balance. If we had nothing of value to offer in exchange, our dollars would not be worth much to them. As it turns out, we have the port resource that they can invest in, and it is a fair deal.
Meanwhile, China practices capitalism better than we do. We price our own factories out of the worldwide market with minimum wage laws, "legal" union collusion, and general boneheaded economic schemes. It's no wonder we have trade imbalances. It's necessary to buy things from China because we choose (by our policies) not to compete in their markets.
Markets are global whether we like it or not; and the services we uniquely provide (engineering, technical services) are becoming less and less exclusive to us. So, if we want to hold our own economically, we need to find ways to serve the rest of the world efficiently.
If we don't right the economic ship by facilitating fair and free trade, then all our kids will have to look forward to is unemployment.
Them that has gets, and the rest get goosed by the invisible hand.
But it's all okay because capital is god.
I'll stipulate that capitalism is the best system identified so far. Or do you want to suggest something else?
Well, now I see the Dubai people have moved on, as I predicted. Obviously the profit opportunity was gone by this time.
Now the only entertainment left in this game is watching the networks trying to paint this as a bad thing for Bush.
I don't think any of his supporters are gonna fault him for taking a free trade stand; as rare as those are for him.
More likely, the Republican congressmen will get dinged over this. Their lack of principle is apalling. Their lack of political savvy is also a mess. If they just delayed a few more months, Dubai would have walked away anyway.
Now, they are left with a situation where the Chinese government already owns US port terminals. What to do about that?
Post a Comment