Pacific Views
You've been had. You've been took. You've been hoodwinked, bamboozled, led astray, run amok. - Malcolm X
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| Pacific ViewsYou've been had. You've been took. You've been hoodwinked, bamboozled, led astray, run amok. - Malcolm X |
At this magpie's other blog, I've been musing over the controversy about that Dubai-based company taking over the operation of between six and 21 US ports [depending on how you count]. A few days ago, I posted links to a couple of articles pointing out how the real problem with the takeover isn't national security — at least not in the sense of worrying about terrorists entering via those ports or the unexpected arrival of nuclear devices. In one of the articles, John Nichols suggests that the problem with the port deal has more to do with corporate ownership of infrastructure that should continue to be owned by the public:
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The U.S., EU and Japan — the dominant service economies — have been pushing hard to get a deal done on government procurement that would bring public purchasing of goods and services into the WTO framework. Their goal is to give foreign-based multinationals "national status," meaning that governments couldn't favor domestic firms over foreign firms for any reason (except for security issues, and this case wouldn't be likely to qualify as such).
Let's assume that this UAE port deal was the best one out there — that they offered the lowest bid among highly-qualified firms. Under the framework that we've been pushing, it would be a sanction-able violation of WTO rules to discriminate against the company because it's based in the Middle East.
[But] the problem is the issue writ large: governments use procurement — spending tax dollars — for purposes that defy pure considerations of economic efficiency....
Consider the Massachusetts Burma Law, about which I've written before, that put pressure on Burma's military junta by giving preference for state contracts to companies that didn't do business with that country. It was killed in the federal courts after the EU and ASEAN filed complaints against the U.S. with the WTO. And there wasn't even a binding agreement on government procurement then; they said it "violated the spirit" of the WTO.
Similarly, the sanctions against Apartheid South Africa would have been WTO-illegal if the organization had existed at the time.
It's a very small step from there to saying that governments can't favor minority-owned businesses or women-owned businesses or firms that pay a living wage to their employees. All of those criteria could be challenged as non-tariff "barriers to trade" by firms from countries that don't have similar rules, or like populations.
As good as both Nichols' and Holland's reasoning is, there's a still a piece missing from the picture: Why is the US having to deal with the question of foreign ownership [or in the case of the port deal, quasi-ownership] of important assets and infrastructure, anyway? According to David Ignatius, the blame for the nation's predicament can be laid at the door of the White House and Congress. It's the GOP's penchant for cutting taxes and running up deficits that have made the US beholden to foreign creditors to a degree not seen since the 19th century:
The best quick analysis I've seen of the fiscal squeeze comes from New York University professor Nouriel Roubini, in his useful online survey of economic information, rgemonitor.com. He notes that with the U.S. current account deficit running at about $900 billion in 2006, "in a matter of a few years foreigners may end up owning most of the U.S. capital stocks: ports, factories, corporations, land, real estate and even our national parks." Until recently, he writes, the United States has been financing its trade deficit through debt — namely, by selling U.S. Treasury securities to foreign central banks. That's scary enough — as it has given big T-bill holders such as China and Saudi Arabia the ability to punish the U.S. dollar if they decide to unload their reserves.
But as Roubini says, foreigners may decide they would rather hold their dollars in equity investments than in U.S. Treasury debt. "If we continue with our current patterns of spending above our incomes, by 2013 the U.S. foreign liabilities could be as high as 75 percent of GDP and an increasing fraction of such liabilities will be in the form of equity," he explains. "So, let us stop whining about the dangers of unfriendly foreigners owning our firms and assets and get used to it."
Here's how bad it is: The worst thing that could happen to the United States, paradoxically, would be for Arab and other foreign investors to take us at our xenophobic word and decide that America doesn't really want foreign investment. If they pulled out their money, U.S. financial markets would plummet in a crash that might make 1929 look like a sleigh ride.
So the real threat to the US isn't the supposed security problems that would result if an Arab-owned company took over some US ports. The real threats to the nation come from how Dubya and the GOP-controlled Congress are cutting taxes and busting the budget. And from how, in the name of 'free trade,' the prez is willing to sign away the government's ability to use business contracts as a tool of public policy.
This magpie suggests that the issues dealt with in this post — corporate ownership of infrastructure; the use of contracts to further public goals; foreign debt — are the ones that progressives should be using in the argument over the port contract, not the Arab-bashing rhetoric that is too often coming even from people on the left. Let's leave the Arab bashing for the Bushies and the right wing — xenophobia doesn't look good on us.
Via Washington Post.
Posted by Magpie at February 26, 2006 01:35 AM | US Politics | Technorati links |