Democrats & Liberals Archives

Dubai Must Manage Our Ports

Economist Nouriel Roubini says the United States desperately needs foreigners to buy our capital assets in order to pay off loans from China and Japan that the Republican-controlled Congress uses to kite their annual record-setting federal budget deficits.

Up until a couple years ago, countries were content to float Bush's bloated budget by acquiring Treasury bills, but now "foreigners are starting to realize that exchanging their goods and services for lousy low-return IOUs of the US government is a most lousy deal for them. Why to hold Treasuries that give you a mediocre 4.5% return over 30 years when you can instead buy higher return capital such as US corporation, US factories, ports, real estate and any other asset currently owned by American in this great land of ours?"

So, whether we like it or not we will, increasingly, sell all of our assets and capital stock to foreigners, whether these foreigners are friendly or unfriendly to US. And since one can expect, at current trends, US current account deficits of at least one trillion dollars a year from next year on, one can forecast that, if an increasing fraction of the inflow of capital into the US will go into equities rather than debt, an increasing fraction of the entire US capital stock will, in a matter of a decade, be owned by non-residents.

President Clinton balanced the federal budget and a whole bunch of good things happened. President Bush and the Republican Congress went on a crazy domestic spending spree in addition to new homeland security funding and an unnecessary war in Iraq, and now the US economy will go in the crapper if countries that don't like us decide not to buy our currency, properties, and businesses.

Posted by American Pundit at March 6, 2006 10:20 AM
Comments
Comment #131563

I’ve been trying to warn Jack about these kind of unintended and undesirable results, but we know what he thinks of bad news. Maybe he’d listen better if it didn’t sound so partisan…

Economist Nouriel Roubini says the United States desperately needs foreigners to buy our capital assets in order to pay off foreign held federal debt instruments.

Up until a couple years ago, countries were content to support our deficit by acquiring Treasury bills, but now “foreigners are starting to realize that exchanging their goods and services for lousy low-return IOUs of the US government is a most lousy deal for them. Why hold Treasuries that give you a mediocre 4.5% return over 30 years when you can instead buy higher return capital such as US corporation, US factories, ports, real estate and any other asset currently owned by American in this great land of ours?”

So, whether we like it or not we will, increasingly, be selling our assets and capital stock to foreigners, whether these foreigners are friendly or unfriendly to US. And since one can expect, at current trends, US current account deficits of at least one trillion dollars a year from next year on, one can forecast that, if an increasing fraction of the inflow of capital into the US will go into equities rather than debt, an increasing fraction of the entire US capital stock will, in a matter of a decade, be owned by non-residents.

When the federal budget was balanced a whole bunch of good things happened. Then we went on a domestic spending spree in addition to new homeland security funding and a war in Iraq. Now the US economy will go in the crapper if countries that don’t like us decide not to buy our currency, properties, and businesses.


Posted by: Dave at March 6, 2006 10:51 AM
Comment #131568
Maybe he’d listen better if it didn’t sound so partisan…

I doubt it, but thanks for giving it a shot. :)

Posted by: American Pundit at March 6, 2006 11:18 AM
Comment #131573

living on borrowed money….some time or another the bill is due.

The problem I have with Dubai is that they are owned by the state and the state has demonstrated a recent taste for things counter-democratic and counter-western.

Yeah, they gave cash for the Katrina disaster but was this deal not already underway or at least known about? Is their rather recent change of heart for real or not? The biggest question of all; WHY GAMBLE? This isn’t a vending machine operator we’re talking about. It has ramificaitons to our national security. We already know our ports are a weak point. I will still hold my final decision until more is known about the deal, but right now I’m very suspicious and skeptical.

Regards,

Posted by: Tom L at March 6, 2006 11:25 AM
Comment #131580

AP,

Thanks. I’m looking forward to his data showing how this doesn’t really matter because … or so what it’s been happening for a long time now, or..?

Forgot to add before, sorry:

Good post.

Posted by: Dave at March 6, 2006 12:03 PM
Comment #131584

American Pundit,

Something I found of interest in yesterdays NY Daily News was the mention of Halliburton as a possible US partner in the ports deal:

“Dubai & Dubya in dash for lifeboat
Bush team urges firm to get a U.S. partner”

“”A lot of people are talking about this, a subsidiary or a deal like that,” a congressional source confirmed.

One snag to such a deal may be that sources say the U.S. company best equipped to partner with DP World is Halliburton, once headed by Vice President Cheney.”

http://www.nydailynews.com/03-04-2006/news/story/396635p-336188c.html

It sounds crazy but with this administration I’ve come to expect the unexpected.

KansasDem

Posted by: KansasDem at March 6, 2006 12:08 PM
Comment #131587

kansas:

Hillary Clinton is on board with legislation stating that ports must be run by US companies. To date, I’ve heard there is only one US company that would have the capability to run the ports, which would essentially make it a ‘no-bid’ contract. The company is not Halliburton, and I don’t know whether Halliburton would have the capacity to run the ports.

What US companies are you aware of with the capability to run the ports? I’d think that would be part of the conversation.

Posted by: joebagodonuts at March 6, 2006 12:14 PM
Comment #131610

You guys know the Treasury Department is begging Congress to raise the debt-ceiling limit… AGAIN?

Posted by: Aldous at March 6, 2006 1:32 PM
Comment #131612

Good post, Pundit. And Dave…it will be interesting (if not lamentable) to see how Jack spins this one.

As far as I can tell, we’re into this stupid, embarrasing mess of selling US assets because BushCo has been so egregiously irresponsible with this country’s economy. As we all know, W:

• Inherited a record surplus and turned it into a record deficit;
• Never vetoed 1 spending bill and has outspent virtually every President before him;
•Has helped us lose millions of jobs to cheap foreign labor
• Got us into a senseless, morally unjustifiable war with Iraq, plunging us further into debt while making our country significatly less secure

…but people like Dave will never admit to any of this. Instead, they’ll spin it, ignore it or repackage it - but they will never admit to it. “We’re in Iraq , deal with it…” is their battle cry, when it should be, “Impeach this complete and utter faliure of a President for getting us there in the first place, and ruining our economy in the process.”

It’s just amazing to me how so many Repubs keep covering for Bush’s incompetence by saying we’ve GOT to sell our ports for economic reasons…instead of skewering the turd (Bush) who sent our economy careening down the toilet in the first place.

Posted by: 0% APR at March 6, 2006 1:37 PM
Comment #131616

Hey 0%, what did I do?

Posted by: Dave at March 6, 2006 1:47 PM
Comment #131628

I think it is time to force change.
America should only be ran by americans.
Elect a person to fix this no matter
what the cost on the poor rich man.
If Clinton balanced the budget then
it can be done again. We may not like it
but being responsable is not always easy
or cheap. Borrowing from foreign countrys
is nonsense. It should never be done.
Why are we paying billions to fight a war
to free another nation. Then handing our
assets to foreign countrys to pay for it.
DEMAND COMMEN SENSE. THIS IS NOT IT.

Posted by: Honey P at March 6, 2006 2:13 PM
Comment #131645

What is the one element that destroyed all major empires in the history of this world?

In a word, BANKRUPTCY!

This country better start reading its history books and stop being so damned egotistical in its thinking because we’re headed down the same path.

Posted by: Lisa C. at March 6, 2006 3:18 PM
Comment #131650

Just agreeing with you, Dave. I apologize if that was unclear. Carry on, sir.

Posted by: 0% APR at March 6, 2006 3:31 PM
Comment #131659

Aldous —

Indeed. Check out the first two ¶s that hit the AP today:

(AP) Treasury Secretary John Snow notified Congress on Monday that the administration has now taken “all prudent and legal actions,” including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national debt limit.

In a letter to Congress, Snow urged lawmakers to pass a new debt ceiling immediately to avoid the first-ever U.S. default on its obligations.
——
…all because we have a President who uses our economy as his own personal checkbook. Disgusting.

Posted by: 0% APR at March 6, 2006 3:47 PM
Comment #131678

Lads- I grew up during the depression and I assure you it wasn’t fun.This cheque book spending by our government and irresponsible behavior by our leaders has got to stop.
I WOULD LIKE TO SUGGEST that every post concerning our country from daily newspapers to
weekly news magazines be followed by a sentence… GO TO THE POLES AND VOTE

Posted by: duckman1934 at March 6, 2006 5:09 PM
Comment #131726

Heh. As much as I admire Poland’s burgeoning democracy, I’m sure you mean “polls”, duckman. :)

What US companies are you aware of with the capability to run the ports?

This is kind of a silly question, JBOD. The answer is: any company that can make the winning bid has the capability to run the ports.

DPW is just taking over existing facilities and employee contracts, not starting from scratch. All they’d need is a management team, and MBA’s are a dime a dozen nowadays.

But the fact is, if the US had a healthy economy, we wouldn’t be in this mess. To paraphrase Lloyd Bentsen going off on Reagan’s record-setting deficit spending,

If you let me write half a trillion dollars worth of hot checks every year, I could give you an illusion of prosperity, too. (Laughter and applause)

During the Reagan/Bush Sr. years, we were worried the Japanese would buy up America. Clinton’s budget balancing freed up thte capital to buy it all back. Now, under another Republican President (there hasn’t been a fiscally responsible Republican President since Eisenhower, BTW), our deficit is once again ar record levels and the Arabs — flush with oil money — are buying up America.

We’re not going to lose the war on terror; they’re just going to buy us out…

Posted by: American Pundit at March 6, 2006 8:24 PM
Comment #131851

Exactly A P

Yet again, this Administration has side-tracked us with yet another Red Herring. The real question here is, why isn’t America running American Ports?

The next time you talk to your Repub. friends (or anyone who thinks that this is a good idea for any company or country to run our ports other than U.S.), you should ask them, why then aren’t the following equally good ideas:

Hey Mexico —- What will you give us for the U.S. Postal Service?

Russia, want to buy the U.S. Coast Guard?

Palistine, now that you are a country of your own, we have a hot deal for you !!! For the one time price of a measley 1 trillion dollars you can own the entire U.S Based Homeland Security Department. Be the first in your neighborhood to own a real piece of security and piece of mind!

It’s ludricrious, it’s rediculous, it’s insane !!

STOP THE INSANITY!

(but, then I guess I shouldn’t be giving these nut cases any ideas…maybe all of the above seam like pure genious to these idiots !)


Posted by: PlayNice at March 7, 2006 10:11 AM
Comment #131867

Kansas Dem:
“Something I found of interest in yesterdays NY Daily News was the mention of Halliburton as a possible US partner in the ports deal:”

Sure, Bechtel is, so why not Halliburton too?
Bechtel contractor, based in Dubai, gets lucrative U.S. security contracts


Also from that link:

The firm’s attorneys are Baker, Botts, LLP – a lawfirm where former Secretary of State to President George H. W. Bush is a partner. Baker Botts opened an office in Dubai last year.

Posted by: Adrienne at March 7, 2006 11:04 AM
Comment #131873

0%, I should have quoted the typo:

Dave will never admit to any of this. Instead, … so many Repubs Posted by: 0% APR at March 6, 2006 01:37 PM
I am not a repub (indignently stomping my feet :-) Not a democrat either but that’s a different story…lol

Addriene,
Some more interesting meat from your link:

Olive’s consulting in Iraq is underwritten by U.S. taxpayers under an umbrella contract awarded to Bechtel…A recent estimate suggests the U.S. spends $2 billion a year on private security services in Iraq
I would ask, why do we hire so many mercs (4000 of them at $500k per yr)? Is it because they can do things beyond even what we are asking our troops to do or is it because we’ve used up our forces? I don’t see a good answer anywhere to that one.

Posted by: Dave at March 7, 2006 11:18 AM
Comment #131895

That’s a very good question Dave, and I don’t know the answer either.

More on the port deal:
Pentagon, Homeland Dept. objected to UAE port deal

From the link:
“All of the rules were bent on this one,” a congressional source said. “We had a major security review managed by political appointees.”

Posted by: Adrienne at March 7, 2006 12:33 PM
Comment #131902

The sad part; I used to be surprised by these things. Now, I barely get disappointed and just wish I had Dorothy’s ruby slippers…
(not a crossdresser by the way :-)

“8 more months, 8 more months, 8 more months”

Posted by: Dave at March 7, 2006 1:03 PM
Comment #131938

lets all go quail hunting

Posted by: bullit at March 7, 2006 3:46 PM
Comment #131964

Maritime shipping has always been an industry that is characterized as exotic with an international cast of characters. The nature of the industry precludes limiting it to US only businesses. There are few people from Kansas and all the landbound states that have sufficient experience to operate an international shipping terminal.

BTW, DWP currently operates terminals in Israel. I think that if DWP can pass the Israeli vetting process then there is little danger to the US.

Posted by: goodkingned at March 7, 2006 5:51 PM
Comment #131971

ned,

If it’s true that DWP runs port operations in Israel, that was when it was a British Company. Will they continue to allow it too? Also, I bet they didn’t skip the records and citizen requirements that the Administration here allowed.

bullit,

Wasn’t that “quayle” hunting, with an “e”?

Posted by: Dave at March 7, 2006 6:10 PM
Comment #131974

Obviously I meant P&O.

Posted by: Dave at March 7, 2006 6:23 PM
Comment #132046

I am surprised not much is mentioned about Snow selling CSX to DP in 2004,
This was not been mentioned too much either, from the Whitehouse: “The President intends to nominate David C. Sanborn, of Virginia, to be Administrator of the Maritime Administration of the Department of Transportation. Mr. Sanborn currently serves as Director of Operations for Europe and Latin America at DP World. Prior to this, he served as Senior Vice President for North America Service Delivery at CMA-CGM (America) LLC. Mr. Sanborn also served as Vice President for Network-Operations for American President Lines, Pte. Ltd. Earlier in his career, he served as Director for Operations for Sea-Land Service, Inc. Mr. Sanborn is a retired Lieutenant Junior Grade for the United States Naval Reserve. He received his bachelor’s degree from the United States Merchant Marine Academy. “

The US has ignored the debt and painted a rosy picture while selling off toll roads, banks and infrastructure to foreign interests.

Posted by: Lucy at March 8, 2006 7:06 AM
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