Going well beyond Dubai, House Armed Services Chairman Duncan Hunter (R., Calif.) says he wants Congressional oversight of all foreign purchases of "critical infrastructure." Mull over that one for a minute. If you think corruption on Capitol Hill is bad now, wait until foreigners need approval from Congress for every multi-billion-dollar investment. The current investment review process was designed by the Reagan Administration to be discreet, and to keep Congress out, precisely to avoid such politicization.In recent weeks Members of Congress have suggested that the foreign-ownership ban should apply to: roads, telecommunications, airlines, broadcasting, shipping, technology firms, water facilities, buildings, real estate, and even U.S. Treasury securities. If this keeps up, we'll soon arrive at France, where even food and music are "protected" from foreign influences as a matter of national survival.
The larger truth is that the flow of foreign investment into the U.S. is a sign of economic strength, not weakness. For 25 years pro-growth economic policies including monetary stability, steep tax-rate reductions on capital and freer trade have created a giant in-sucking sound of some $4 trillion of global investment into America. Economist David Malpass of Bear Stearns recently calculated that U.S. GDP grew by 100% between 1992 and 2005 while world GDP growth measured in dollars grew by only 70%. Over that same period, the U.S. created four times the number of new jobs as Europe and Japan combined.
We do need to secure our ports, but, as suggested by Sen. John McCain and other experts, the most effective way to do that is overseas, with the cooperation of allies (See David Ignatius, Washington Post) expressly like Dubai.
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