September 21, 2007
Don't like the Dubai Nasdaq deal? Don't buy an SUV
It is no secret that the Gulf States are gagging on cash these days. They’ve literally got dollars falling out of their dishdashahs.
Why? We in the West continue to use their oil to fill up our SUVs and minivans, silly. The CEO of General Motors isn’t the only one who wants you to buy a new Hummer. Prince Ali-Wad-this and Prince Abu-Dhabi-that also want you to step on the gas pedal. Don’t worry----they promise to make more oil!
What do the Gulf States do with all that money? They can only build so many palaces, madrassas, and mosques. And there isn’t much to invest in locally. Nutjobs in that part of the world have a habit of blowing nice things up.
Therefore, they buy things overseas. All of the Gulf State governments (including Saudi Arabia) invest much of their oil money abroad. Dubai and Qatar have recently been going on a shopping spree, as the news today indicated:
The U.S. tech-heavy stock exchange, Nasdaq, has struck a deal to sell a 20 percent stake to the United Arab Emirates-owned Borse Dubai, in exchange for control of the Nordic bourse operator OMX. But the deal was followed by Persian Gulf neighbor Qatar acquiring large stakes in the London Stock Exchange and OMX.
--Voice of America
A cursory search on through the blogosphere reveals that this transaction makes some people very nervous. This afternoon Fox News labeled the deal “shameful.”
The Nasdaq transaction is reminiscent of an earlier deal that would have given one of Dubai’s state-owned companies operating rights in six U.S. ports. The U.S. Congress put the kibosh on that transaction due to obvious security concerns. (In a rare moment of sanity, our legislators actually ignored the corporate lobbyists.)
I was all for killing the Dubai ports deal, because the collusion between officialdom and jihad is just too widespread throughout the Muslim Middle East. Political correctness be damned, the proposed deal wasn’t worth the risks.
Dubai’s bid to purchase a stake in Nasdaq falls into a gray area, though. Congress should always err on the side of caution when evaluating transactions that could compromise our national security. Nevertheless, we don’t want to adopt a knee-jerk opposition toward any financial ties to the Gulf States. (Let’s hedge our bets, though, and not give them control of port security, airline screening, and nuclear weapons technology---shall we?)
Foreign ownership in U.S. companies is, incidentally, nothing new---though it has often been controversial. During the merger wave of the 1980s, a number of vaunted American corporations were purchased by foreign interests (such as Standard Oil, which was acquired by British Petroleum in 1987).
In any event, this deal should remind us that our dependence on foreign oil constantly transfers wealth to the Gulf States. If our thirst for the slimy black stuff cannot be slaked, then the Gulf State governments will likely own a lot more of America in the years to come.
