Five years after terrorists took out the World Trade Center and ignited the Pentagon, the specter of terrorism remains a threat to the peace of the world. Yet Wall Street seems to have returned to business as usual. Sure, the financial firms all have their post-9/11 business continuity plans in tip-top shape. Financial records are dispersed and back-up systems improved. But when the Dubai Ports World and China National Offshore Oil Company seek to acquire sensitive U.S. assets, Wall Street cranks out white papers trumpeting the fact that millions of American jobs depend on foreign firms investing in the U.S.
This argument seems disingenuous. Nearly every foreign firm investing in the U.S. is based in friendly countries like the U.K., Switzerland, the Netherlands and Japan. The burden should be on foreign companies linked to our geopolitical adversaries to tell their governments that hostility to America is bad for business.
Lenin was said to have remarked that “the capitalists are so hungry for profits that they will sell us the rope to hang them with.” These days it would seem we need to be cautious about whom we’re buying from. There appear to be two contemporary challenges to the peace and freedom associated with American power. The long-term threat is the rise of China and the more immediate threat are terrorists and terrorist-sponsoring states in the Middle East.
China has long excited Wall Street with the promise of vast markets for American goods and services, and cheap, outsourced labor for U.S.-based global companies. The dream of increased sales has always been somewhat overblown, as evidenced by the continuing and growing trade deficit between the two countries in China’s favor. But the outsourcing has generally worked, aided by China’s vast numbers of hungry workers and a reliable system of labor repression.
But flare-ups arise like clockwork every few years, be it threats against Taiwan, an orchestrated mob attack against the U.S. embassy in Beijing, or a Tiananmen Square demonstration. These events should remind us that as long as the Chinese government remains threatened by freedom, our economic relationship will be vulnerable to severe disruption and painful financial losses. I’m not breaking news when I say that India could be a more promising alternative, with its vast markets, English-speaking population and free institutions.
Terrorists remain the more immediate threat to Wall Street, because of both the economic devastation they cause and of course the burning shards of glass, steal and ball bearings they project onto innocents. But unlike China, terrorists and the regimes that sponsor them do not produce goods or services other than ghastly hate literature. The money that makes their world go around comes only from the filthy oil they pump from the ground. The financing of cleaner, alternative fuels or vehicles available on a mass scale would be the most patriotic thing Wall Street could now do.
(See complete coverage of 9/11: Ten Years After on AdvisorOne.)