News of the Day ... In Perspective03/21/2006
Foreigners buying up United States
While its attempt to buy some operations at U.S. ports focused attention on the Dubai Investment Group, few were aware that the company already owns the ritzy Essex House hotel in Manhattan. Arab investors also own Church’s Chicken and Caribou Coffee. The United Arab Emirates is second among Middle East Arab countries in U.S. investment, holding $1.8 billion.
The United States must borrow $2 billion per day from foreigners to cover its trade deficits. The share of the public debt now owned by foreigners is 51%, and rising. As of January, some $2.19 trillion in Treasury securities were in the hands of central banks, including those of China and Japan, and private foreign investors.
Nearly one in five U.S. oil refineries is owned by foreign companies. There is also a substantial foreign presence in running power plants, chemical factories, and water treatment facilities.
“When you make yourself so dependent on inflows of capital from the rest of the world,” said David Wyss, chief economist at Standard & Poor’s, “the question is what happens if the inflows slow down” (AP 3/20/06).
Cheap Chinese beads are among the goods deluging U.S. ports, prompting Arthur Robinson, editor of Access to Energy, to ask whether the United States is following the example of the Native Americans who sold Manhattan Island for a handful of beads or other trinkets (“Wampum,” Access to Energy, June 2003, PO Box 1250, Cave Junction, OR 97523).