"Sovereign wealth funds."  They are foreign nations' investment companies that buy corporations in the U.S. and elsewhere.  How do you rename SWF's so the eyes of ordinary people don't ignore you?  Maybe it is foreign socialism allowed, and welcomed by some, here.  But "socialism" is as overused as fascism... and is dated.

But SWFs are getting more attention.  Good.  WaPo reports that the foreign government funds are increasingly having to defend their investments here. 

At one extreme, the funds have been characterized as saviors, propping up the struggling U.S. economy with capital infusions. At the other, there are fears that their investments could turn political, that the funds could buy stakes in entities that could someday be used to compromise the security of the United States while furthering their national interests.

Yes.  That is the debate.  And not a bad debate.  But we should add 2 major issues:  (1) Should America disallow our government ownership of the economy while allowing foreign government ownership of our economy?  (2) What about the stupid, destructive trade deficits that put us in this position... i.e. we allow foreign trade policy manipulation causing us to import and outsource too much, funding it all with debt.

Muhammad al-Jasser of the Saudi Arabian Monetary Agency, which is forming a fund that may exceed $900 billion to become the world's largest, has said that "it's like the sovereign wealth funds are guilty until proven innocent." Sultan Ahmed bin Sulayem, head of Dubai World, which manages a $8 billion sovereign wealth fund, has warned critics in Western countries that if their money is not welcome, there are plenty of other places to invest.

Well yes.  Do we buy major companies in your country?  I have to take off my dangerous and risky shoes and put my shampoo in a ziploc bag at the airport for national security reasons, but they can buy our technology and financial companies?

We need more than Henry Paulson's Strategic Economic Dialogue® to convince a couple of funds of tiny countries to "be good" when buying the American economy. 

We simply need achieve real free trade that eliminates the effects of currency manipulation, foreign VAT-tariffs, and preserves our democratic ability to regulate our trade without unaccountable international tribunals taking the authority away.

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... : China Watcher This is obviously a complex issue that needs urgent attention. But we must recognize a few practical realities: 1) we are heavily indebted to the rest of the world -- three going on four trillion dollars, net; 2) each of those dollars is a claim on what we can produce in the way of goods or services; 3) we have no easy or quick way to produce more goods (we consume far, far more than we produce); and so 4) the foreigners will have the right to acquire American assets with the dollars they hold. We can prevent this only by inflating our way out of the hole we have dug. It might be useful to start thinking about what kinds of investments we would welcome. Personally, I'd love to see SWFs buy bonds to fund the proposed (Sens. Dodd and Hagel) infrastructure bank. That would substitute for appropriated dollars that will otherwise be hard to find in adequate amounts to finance the massive rebuilding of our crumbling infrastructure. I'd also welcome foreign investment in new, additionalproduction capacity -- energy, steel, autos, capital goods, consumer goods, whatever so long as they're not buying existing assets but building new ones. And, we must know where to draw the line -- telecommunications, defense industries, critical technologies, ports -- anything that, were it to be moved offshore and/or the domestic component closed would leave our country vulnerable to political manipulation, military or terrorist attack, or economic disruption. Hopefully, others will have more refined ideas to offer. March 27, 2008

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