NationStates Jolt Archive

Last Friday, Blackstone Group, a highly successful private equity firm, had its IPO, opening the industry to the masses. Or at least partially. The Chinese government was the single largest institutional investor in Blackstone so far. I believe the Russian government also has some holdings in the company now.
Such large presences in the US private sector is a threat to competition. Most governments, having vast and nearly inexhaustible resources, can outcompete anything in the private sector, threatening wealth creation and the ingenuity of the individual. More disturbingly, such presence poses a national security threat. In the US, both China and Russia are potential rivals. Such a presence in our own economy threatens our industries and may even compromise our security.
I am not opposed to no government investment. Governments have financial obligations to meet, and they can't be expected to meet them with taxes alone. What I am oppossed to is their right to trade companies like any legitamite investor. I think that all governments that invest outside of their own countries should do so through private holding firms. They should clearly state their investment objectives, and cash flow is to be carefully monitored. Most importantly, governments should have no voting power in companies, and ensure the political independence of each economy. The restrictions, of course, can be far less for debt assumption and things like that, for control is less of an issue.

It rhymes with honey and bunny...

Article from The Economist:
http://www.economist.com/displaystory.cfm?story_id=9230598&fsrc=nwl

I say "meh" until I've been proven wrong. The Chinese governments wants to do something with all these foreign currency reserves they own, and firms like Blackstone are among the best ways to make money. I have my doubts they actually want to influence what Blackstone is doing...in all likelihood they'd just end up cutting their profits.

You're only getting concerned about this sort of economic "invasion" now!?

What do you think about Saudi Arabia? It's invested trillions into your economy. If they ever remove it, you're on your way to recession for sure.

Really, China's government investing in Blackstone has nothing to do with a plot to influence the company's policies or make inroads in to the US economy. The primary reason is that they are awash with cash due to their trade surplus and need somewhere to invest it, especially somewhere where they can get a solid return on investment.

By investing in a US company, it not only improves their ROI on their cash reserves but is a good PR move at a time when protectionist sentiment in Congress is dangerously high and anything to help deflate it is a boon to the Chinese government and economy.

Really, China's government investing in Blackstone has nothing to do with a plot to influence the company's policies or make inroads in to the US economy. The primary reason is that they are awash with cash due to their trade surplus and need somewhere to invest it, especially somewhere where they can get a solid return on investment.

By investing in a US company, it not only improves their ROI on their cash reserves but is a good PR move at a time when protectionist sentiment in Congress is dangerously high and anything to help deflate it is a boon to the Chinese government and economy.


Very true. Also want to point out that nations that invest in each other tend not to go to war against one another. When China starts selling off US holdings and buying arms with the proceeds then it is a time of worry.

More disturbingly, such presence poses a national security threat. In the US, both China and Russia are potential rivals. Such a presence in our own economy threatens our industries and may even compromise our security.

Why would China or Russia engage in hostilities with us if they are heavily invested in our economy?

If someone is making you money, you don't beat him up.

I am not opposed to no government investment.

:confused:

Last Friday, Blackstone Group, a highly successful private equity firm, had its IPO, opening the industry to the masses. Or at least partially. The Chinese government was the single largest institutional investor in Blackstone so far. I believe the Russian government also has some holdings in the company now.
Such large presences in the US private sector is a threat to competition. Most governments, having vast and nearly inexhaustible resources, can outcompete anything in the private sector, threatening wealth creation and the ingenuity of the individual. More disturbingly, such presence poses a national security threat. In the US, both China and Russia are potential rivals. Such a presence in our own economy threatens our industries and may even compromise our security.
I am not opposed to no government investment. Governments have financial obligations to meet, and they can't be expected to meet them with taxes alone. What I am oppossed to is their right to trade companies like any legitamite investor. I think that all governments that invest outside of their own countries should do so through private holding firms. They should clearly state their investment objectives, and cash flow is to be carefully monitored. Most importantly, governments should have no voting power in companies, and ensure the political independence of each economy. The restrictions, of course, can be far less for debt assumption and things like that, for control is less of an issue.

So you're opposed to the free market?

None of your points of contention have any validity. There are plenty of companies out there whose resources rival those of many nations. Bechtel's presence in South America is often a far greater force than even dictatorial governments there. In fact, especially more than the dictators. A single dictator can be bribed a lot more easily than a hundred legislators.

And your complaint about them having to be transparent in their actions runs afoul of your belief that they should only be able to do so through holding companies. After all, that's just one more layer of obfuscation.

Even if such pointless rules were put in place, governments would just appoint people whose job would, in effect, be "ceo of the national equity corporation."

And there's no practical difference anyway. The revolving door between American corporations and American politicians is obscene. Dick Cheney left Halliburton to become a politician to send US government contracts to Halliburton and influence government policy to create the problems that Halliburton sells solutions to. And he still owns stock in the company. How is that not government ownership?

And Bill Frist owned huge dollar amounts of stocks in his family's chain of hospitals. And he was in charge of legislation that determined how lucrative the medical industry was likely to become.

You want to get politicians out of private enterprise? First get the American ones out. And while you're at it. Get American corporations out of government.

Why would China or Russia engage in hostilities with us if they are heavily invested in our economy?

If someone is making you money, you don't beat him up.

You can make money in an upwards or downwards bound economy. Cause us problems to drive prices down, then buy them all up. Then lend a helping hand to mend our economy and find yourself at the top of a huge financial empire.

You're only getting concerned about this sort of economic "invasion" now!?

What do you think about Saudi Arabia? It's invested trillions into your economy. If they ever remove it, you're on your way to recession for sure.

Na! Blow 'em up. They were behind 9/11 after all. And dead men make no withdrawals.