Where Do We Go from Dubai?
It wasnt until the dust had begun to settle the next day that the ABC team paused to consider the possible economic implications of rejecting foreign investment in the United States. David Muir kicked off his March 10 story saying, The question economists are now asking after this doomed deal, what message has been sent to foreign investors who spend an enormous amount of money here in the U.S.?
Economists had been asking that question all along but many in the media didnt pay attention until after Dubai Ports World announced it would sell its port-running services to an American company.
Some reports leading up to the Dubai pullout aired national security concerns, which were a vital part of the story. However, journalists were often too enthralled with the political workings of the debate to explore the trade issues at hand.
On March 9, the day the deal died, the CBS Evening News looked into every nook and cranny of the politics, as anchor Bob Schieffer described how Republicans howled in open rebellion, President Bush vowed to veto and that backstage maneuvering followed. Schieffer later said, regardless of the security aspect of this, there were red flags all over this thing. Why didnt the White House see this coming?
The next day, the newscast answered that question when it showed that foreign investment in the United States has been an everyday occurrence. Bob Orr told Evening News viewers on March 10 that foreign firms now own more than 70 percent of U.S. [port] terminals and control the overwhelming majority of the cargo that arrives here. That fact hadnt been leading stories in the weeks of Dubai hoopla. Bianca Solorzano also delivered a report about other foreign holdings, including U.S. highways.
In fact, foreign ownership of U.S. businesses is so common that another buyout took place during the same time frame, unnoticed by the broadcast media. A British company, National Grid, bought New York-based KeySpan and became Americas third-largest energy distributor. Print outlets including USA Today reported on the transaction, noting on February 28 that the foreign-owned company would distribute electricity and natural gas to KeySpans 2.6 million customers in the Northeast. The coverage did not raise questions about energy security.
Politics, not Economics, Reigns
On February 22, NBCs David Gregory focused his story on what the president knew and when he knew it. He led with: The White House revealed today that the president only learned of the port deal after the fact from news reports, leaving him flatfooted as the rebellion within his own party grew. It wasnt until the end of his story that Gregory included the fact that experts added today blocking this deal would hurt the U.S. financially because foreign investors could choose not to buy from the United States in retaliation.
ABCs Raddatz was at it on February 21, concerning herself chiefly with journalists placement in the presidents agenda. She began her story by telling Charles Gibson that the president made a highly unusual move today. He called reporters to the front of Air Force One to talk about this. He later spoke to cameras. It shows you how concerned the White House is about this growing opposition. She went on to showcase politicians who disagreed with the president.
And on CBS February 27 Early Show, Bill Plante described the 45-day security review encouraged by Dubai a face-saving compromise for the president worked out with leaders in Congress. When a Republican-controlled House panel voted against the deal, CBS anchor Susan McGinnis called it a stinging election-year revolt against the White House on the March 9 CBS Morning News.
Free Trade Benefits U.S. Economy
There was the occasional story that included U.S. trade interests, such as ABCs World News Tonight on February 24. Liz Marlantes story didnt explain foreign investment in America, but it did allude to the fact that Dubai is a business center interested in doing business with the States.
But the more serious economic consideration whether rebuffing foreign investors is good policy was outnumbered by stories about national security and political concerns. Or perhaps more accurately, politicians pontificating about national security.
And that could lead the United States down a dangerous economic road, said Business & Media Institute Adviser Dr. Walter Williams. People are going to rush to say, This is security, too, to excuse protectionist policies, said Williams, a professor of economics at George Mason University. And well be poorer as a result.
Williams said Congress should not be making the regulations more onerous than they already are, because weve done okay with the existing processes for security screening. He said the media tend to inflame passions among Americans.
You would think by listening to the news that wed have all Arabs running our ports, Williams said. Fear of foreigners operating in the States isnt anything new, he said. In the 80s it was the Japanese who inspired economic fears when they bought an interest in Rockefeller Center. Williams said then he asked people what the Japanese would do they going to get mad and take it back to their country?
The Cato Institutes Daniel Griswold called the congressional stampede against the ports deal thoughtless and self-damaging. Were going to be paying for this for some time to come, said Griswold, director of trade policy studies.
He said foreign investment is a no-brainer for the U.S. economy and that uncertainty about foreign companies standing in America could be damaging.
U.S. subsidiaries of foreign-owned companies employ 5.3 million Americans, according to the Organization for International Investment (OFII). OFII is a business association representing many of these subsidiaries. Its membership includes Bayer Corporation, DaimlerChrysler, Fuji photo film, Sony, and Shell Oil.
And as ABCs David Muir reported on March 10, Americans who work at U.S. subsidiaries of foreign companies make, on average, $60,500 a year. Thats 34 percent higher than what the average employee makes at U.S. companies.