June 11, 2008
Lou Dobbs thinks the British are untrustworthy
Lou Dobbs is very annoying.
Having got this off my chest, I can go on to say why the CNN cable news host, who takes to the air most nights in the US to complain about illegal immigration and free trade has riled me.
As detailed admirably by Andrew Ross Sorkin in the New York Times, Mr Dobbs’ latest populist crusade against foreign ownership of US assets concerns CSX, the US railway company that has been attacked by The Children’s Investment Fund, the London-based hedge fund.
Mr Dobbs described it the other night on CNN as “a new threat to national security and sovereignty” because investors in this “shadowy foreign investment fund” may include sovereign wealth funds. You can see the video here.
“To heck with them, dismiss them, who the heck to they think they are?” he said of TCI when discussing its refusal to detail the investors in its fund, beyond the fact that SWFs comprise less than 1 per cent.
His beef with TCI and allied hedge funds trying to exert management pressure on CSX seems to be that no foreign investment group should control a US railway company. CSX, among other things, transports some military equipment.
Neither the Securities and Exchange Commission nor the government is inclined to interfere on the proper grounds that CSX is a public company and TCI is within its rights as a shareholder to launch a proxy fight.
Mr Dobbs and several senators with financial links to CSX now want the matter perused by the Committee on Foreign Investment in the US, which has oversight of contentious foreign takeovers.
As Ross Sorkin points out, there is a reasonable argument to be had over whether TCI is right to attack CSX, but that is beside the point.
Having railed successfully against DP Ports World extending its influence to US ports in its 2006 takeover of P&O, Mr Dobbs is now broadening his definition of untrustworthy foreigners from Arabs to the British.
I can think of various objections to this but here are a few:
First, if you are going to define any investment fund in which a sovereign wealth fund has invested as a “foreign government” entity, you have to include several Wall Street investment banks and private equity firms.
Second, why are all kinds of transportation now being described as national assets? The US, along with some other countries, has restrictions on foreign ownership of airlines and Mr Dobbs seems to want to add railways.
What exactly does he fear? That a Gulf fund with a tiny passive stake in TCI will manage to divert a CSX train in the middle of the US with weapons on board? It does not seem very plausible.
Third, Mr Dobbs objects to Henry Paulson, the US Treasury Secretary, trying to reassure foreign investors that the US is happy about them putting capital into banks and other companies. But should the US really reject foreign investment when it is sorely needed?
At a time when most Americans seek improved relations with the world at large, and appreciate the need for FDI and accordant liquidity injections in financial intermediaries and the fundamental industrial asset-base, Dobbs’ protectionist overtones appear very out of kilter with the liberalisation of domestic attitudes.
Fund managers (such as those at TCI) recognise that rail is undercapacity at the moment and there’s a gradual transition ‘road to rail’ as escalating oil diminishes the viability of independent and small-scale road-hauliers. And that obviously means value in rail.
There has to be a quid pro quo between the US and external investors (in whatever guise), and of course the weak dollar plus possible ‘bottoming-out’ of the economy means foreign investors will expect a lassez-faire attitude if the US wishes to ‘pull-back’ with assistance of its own exports.
Ultimately the exclusion of TCI from such an opportunity only serves to demonstrate that the US has become a parochial entity. When economic power appears to be slowly shifting East, that is the last message (even if just inferance) it can afford to give. A protectionist US will only lead to a protectionist world.
Posted by: Turan Ahmed - investment-auto-motives | June 11th, 2008 at 7:17 pm | Report this commentJohn Gapper is very annoying and I have never heard of him before today.
I watched Lou Dobbs last night and did not hear him say the British are untrustworthy.
He did say he was against unidentified investors taking control of our infrastructure. 1% SWF’s? Who knows since investors are not identified. As I understand it, Osama Bin Laden could be one of those unknown investors.
I did not hear Mr. Dobbs object to all investment funds with SWF’s, but only Hedge Funds, and you know the difference.
As for immigration, I haven’t heard Mr. Dobbs complain about LEGAL immigration at all, and I think we have every right to know who is entering our country.
Be well, happy and peaceful
Posted by: Joe Pigeon | June 11th, 2008 at 7:38 pm | Report this commentI’d like to commend Mr. Gapper for raising the issue of what constitutes “foreign government entity”. On that matter, I wonder how the US would respond if foreign countries suddenly introduced restrictions on American pension funds (such as those owned American public officials)–after all why should these countries accord trust to anything related to the US government, remotely as this may be? Divest of all their investments abroad and invest at home? I suppose My. Dobbs loves bears.
Posted by: Panuwatana Ittigusumaln | June 12th, 2008 at 4:16 am | Report this commentI’ll wager your readers would have found the French resistance “protectionist”, sorry, but corporate whores, including those who are the foreign investors hiding behind the pretense of the “British” based company, have no right to purchase important American infrastructure.
This liberal democrat, and woman of color not only expects, but demands her country PROTECT our important national interests, get over it.. we’re not bending over for fascists, unlike the poor fools in Europe who’ve allowed themselves to be deprived of their democratic right to vote their interests in the sham Lisbon Treaty.
I trust and respect Lou Dobbs, and you can’t change that.
Posted by: Jenny | June 19th, 2008 at 11:01 pm | Report this commentThe U.S. is in an ambivalent spot. On one hand it worries that the economy is tanking by installments and cannot seem to right itself. On the other hand, it suspects all ‘unfamiliar’ overtures that would, perhaps, eventually accelerate its economy.
The same theme of ambivalence seeps through everything that is American in the news these days: attitudes towards the war, the characters running for President, etc.
Invariably, the US will be revived. But many will be surprised to find that they live in a much altered world from the one they overwhelmed last century. None more so than Mr. Dobbs and his campaign against an illusion.
Posted by: Ugo | June 27th, 2008 at 1:14 am | Report this commentYou do understand that England controlled primarily by banking elites. Its practicly the worlds elite home base. He is right to assume they dont have our intrests in mind. That would classify them as not trust worthy.
Posted by: Steve New Jersey | August 14th, 2008 at 1:25 am | Report this comment