Friday, February 24, 2006

Port security, national security, and economic security

James Lileks has an as-always effective post (two posts in reverse order) on the perceived threat to national security caused by UAE acquisition of an important port-security company.

I have been too busy to follow this much. But my sense is that cries of national security here usually are proxies for economic security worries. Exon-Flores is the statute allowing presidential review, without a judicial backstop, of foreign acquisitions that "threaten to impair national security," which is not defined. And the history of Exon-Flores has been one of mischief and misdirected fear. Most of the actions filed under Exon-Flores have been directed at countries not high on my scary-people list: the French, Germans, and Japanese. The French defense company Thomson's bids in the late '80s for missile business was a clear imbroglio, brought on by US defense conglomerates' lobbying. Senator Exon has suggested Exon-Flores could be used for social and environmental reasons, and Gephardt argued for applying Exon-Flores whenever American "competitiveness" was endangered, whatever that means.

The main problem is that these fears are usually ways of making economic nationalism respectable in a world in which mercantilism is mercifully out of fashion. This is an unfortunate gang-up because democrats have a short-sighted protectionist mindset they naively believe favors American workers, and republicans are similarly solicitous for American corporations, especially defense corporations. If you want a national industrial policy, government fingers in foreign direct investment is the way to go.

Bush's tough take on this seems to me a virtue.


Anonymous Anonymous said...

Good discussion of Exon-Flores at

4:06 PM  

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