New York Times columnist Maureen Dowd says the U.S. economy has compounded its addiction to foreign oil with a new dependence on foreign loans to stay afloat. The result is a "Red, White and Blue Tag Sale," allowing wealthy foreign investors to gain ownership in and critical leverage over major U.S. institutions like Citigroup and Merrill Lynch. The second half of her column follows.
Two decades ago, we fretted that Japan was taking over America when Sony bought Columbia Pictures and Mitsubishi bought a chunk of Rockefeller Center. But they overpaid for everything.
Now, because of Wall Street’s overreaching, our economy depends on foreign oil and foreign loans to stay afloat.
China and Arab countries have a staggering amount of treasury securities. And the oil-rich countries are sitting on so many petrodollars that they are looking beyond prestige hotels and fashion labels and taking advantage of the fire sale to buy eye-popping stakes in our major financial institutions.
Like the president, Citigroup and Merrill Lynch came with tin cups to Middle Eastern, Asian and American investors last week, for a combined total of nearly $19.1 billion, after the subprime mortgage debacle blew up their books.
Citigroup, which raised $7.5 billion from Abu Dhabi in November, raised another $12.5 billion, including from Singapore, Kuwait and Saudi Prince Walid bin Talal. Merrill Lynch gave $6.6 billion in preferred stock to Kuwait, South Korea, a Japanese bank and others.
(While the great sage Bob Rubin was advising Hillary Clinton on sound fiscal policy, he seemed to be asleep at the Citigroup switch.)
As Warren Buffett has said, we are giving ourselves a party to feed our appetite for oil and imported goods and paying for it by selling off the furniture, our most precious assets.
When the president got back Thursday night from a trip that made it clear he has no clout overseas, he had to rush the ailing economy into intensive care.
Next to the cool, strong euro, the dollar is a comparative runt in the world’s currencies. The weak dollar lets foreigners snap up real estate in Manhattan.
It is striking that the Bush scion, who has tried so hard to do the opposite of his father, also ends up facing the prospect of a recession in his final year in office.
Maybe if the president had spent the trillion he squandered on his Iraq odyssey on energy research, we might have broken the oil addiction.
Now it’s a race between Iraq, stupid, or the economy, stupid, to see which one will usher out W.
The country is engaged in a fit of nativism and Lou Dobbsism, obsessing about the millions of Mexicans who might be sneaking across the border when billions in foreign money are pouring into Citigroup. You figure out what might be a bigger problem.
The national boundaries that really matter are the financial ones: Who’s going to own the American economy?
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