Monday, March 13, 2006

Banana Republic

Now that the idiocy over the UAE’s “control of our ports” controversy is over I wanted to post a little something about how countries go from great to good, and perhaps even worse. I promise, this won’t be painful, and I swear if I begin to sound like Sully and exaggerate my point so that we’re experiencing the equivalent to the fall of Rome by paragraph three – actually I should give Andy credit, he’d have it by sentence three – then you have full permission to mock me relentlessly.

As you all know I thought this port controversy was one of the most ridiculous, manufactured issues to come down the pike since the great Koran abuse scandal of 2005. Making matters worse, the initial alarm was sounded by Chuck Schumer who deftly handed off to idiot Republican Peter King so that this was a bi-partisan outrage. Completing the tri-fecta, Sleepy George couldn’t get the troops sufficiently rallied in time to fight off an insurrection in Congress that frankly should have been both anticipated and beaten back with little to no effort.

So incompetence was the order of the day, and there was plenty to go around. What concerns me about this controversy though is that unlike other scandals that erupt from time to time in the Washington D.C. culture, this scandal went beyond simple politics. The ports deal was primarily a business deal between a U.K. based company that decided several years ago to make an investment in the U.S. and a UAE based company that decided recently that it wanted to invest in the U.S.

Clearly, it is important that we protect our borders in this country, and the government does have a role to play in ensuring that those who perform vital services for us are who they say they are and will be able to ensure that national security is not damaged by their activities. There was nothing to suggest that this wasn’t the case with the UAE deal. Sadly, a few politicians saw an opportunity to take advantage of an unprepared administration and score political points at the expense of two firms that simply thought the United States was a good location to invest billions of dollars in capital. Their mistake, huh?

Much has been written over the years about why the United States has been such an outstanding success compared to virtually any other culture in the history of the world. No doubt that a lot of this has to do with our constitution, the rights that it guarantees, and the optimistic outlook of Americans who built this country and continue to live in it. From a purely economic point of view however, our success is equally the result of the safety, security and stability of our country’s guarantee of private property and the right of people from all over the world to invest their capital here with the implied promise that it is safe from the sorts of disruptions one is exposed to elsewhere in the world.

While the ports deal will fade into the fog of history make no mistake that those with free capital to invest collected an important data point last week. While no other country looks any more promising for investment as a result of Congress’ action and the President’s inaction, there can be little doubt that the U.S. appears a bit worse. The guarantee of private property must be near absolute in an economy such as ours, and the rule of law must be consistent in its support of this right. Private property not only concerns right to title, but also includes the free use of property within reasonable bounds.

Congress acted unreasonably last week, and all of us are just a little worse off as a result.

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