Buckeye508

Foreign Investment in the United States: Reverse Globalization?

I agree the US is currently on the receiving end of "reverse globalization". My concerns have less to do with foreign investment in the US and more to do with increasing foreign appetite for commodities as a result of reverse globalization.

Globalization (US investment in foreign countries) has made developing nations more affluent. With their new affluence, they demand more oil. They demand more protein in their diets,which by now we have all heard that 6-7 pounds of carbohydrate (e.g. corn) are needed to produce 1 lb of protein (e.g. beef). Yes, the weak dollar has a large role in surging commodity prices for the US, though we cannot discount the important role of reverse globalization.

This concern over foreign investment is somewhat reminiscent of the scare in the 80s of Japan buying up real estate in Hawaii, NYC, etc.
Why is foreign investment in hard assets in the US necessarily a bad thing? In hindsight, it wasn't a bad thing then, and I have a difficult time seeing why its such a bad thing now.

Who's to Blame for the Current Economic Situation?

I agree that Greenspan took interest rates too low, and held them there too long. He definitely shares in the blame of our current economic woes, notably the housing market bubble and its subsequent burst.

What about the lack of an energy policy in the US? Who has been preventing new nuclear power plants and refineries from being built? Who has prevented drilling in the wastelands of Alaska? Who has prevented offshore drilling? Maybe your one of your next installments in the blame series could address who is responsible for the lack of an energy policy in the US.

My Response to Comments from "Second Thoughts"

Dr. Mason- Regarding "rapidly increasing commodity prices", specifically food, how much of that is rightly attributed to "...the divergence of responsibilities" in the current administration. I can understand how the weak dollar makes commodities more expensive, but what about the fact, as you point out in previous discussions, the situation where the US finds itself on the other side of globalization. With the increasing affluence of the rest of the world, people's dietary preferences are changing. It has been cited recently in the popular press that the production of one pound of protein (e.g. beef) requires six pounds of carbohydrates (e.g. corn).If this is accurate, and the populations of developing nations are increasing the protein in their diets, even as the dollar rebounds, the high prices of food commodities will remain. Is the current administration perhaps receiving too much credit for the high commodity prices?

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