Matt Cooper today describes
a 19.9% stake in the Nasdaq stock exchange as a "strategic US asset"
– going even further than Chuck Schumer, the only lawmaker who seems to
have any concerns about the deal at all, who said
only that the deal "gives me pause". Still, the idea that a minority
stake in the Nasdaq is in any sense a strategic national asset of the US certainly
proves what the WSJ said this morning, that protectionism in the US is increasing:
The U.S. doesn’t allow foreign companies to buy airlines, shipping firms,
television networks and some security-related businesses. The U.S. has raised
concern about the increasing acquisitiveness of state-owned firms from China,
Singapore and Middle Eastern countries. Yesterday, the Bush administration
said it would scrutinize Nasdaq’s proposed deal, a transaction that would
give the Dubai government a stake in the U.S. stock-market operator.
A quick look at the dollar is all it takes to show that now is emphatically
not a good time to start putting up barriers to foreign capital. Richard
Branson isn’t allowed to start an airline here unless he owns less than half
of it and doesn’t control it? Dubai Ports World isn’t allowed to buy US ports?
CNOOC isn’t allowed to buy Unocal, a company most of whose assets aren’t even
in the US? Rupert Murdoch can’t buy Fox without becoming a US citizen?
All of these artificial barriers are harmful to the US economy: they reduce
competitiveness, they make it harder for businesses to realize their true value,
and they contribute to the weakening of the dollar because foreigners find it
that much more difficult to buy US assets.
In all of those cases, however, at least the case could be made that a foreign
company was buying a domestic company. In the case of the Dubai-Nasdaq deal,
we’re talking about a stake of less than 20%. How anybody who believes in a
market economy could object to this deal, I have no idea. And Schumer’s comments
just serve to make him look like someone pandering to anti-Arab prejudice. Last
time I looked, Wall Street was in New York State: he really ought to know better.