In the 1990s, it was the Japanese who were buying up all the world's assets, triggering a panicked frenzy of economic nationalism. A few years ago, it was the Chinese, trying to buy an also-ran oil company. Now, it's "the Arabs," as Fox Business News affectionately calls the folks in Dubai. Frantic to find something, anything to do with the mountains of oil cash piling up around them, Dubai's sheiks are now throwing some of it at the world's biggest technology companies.
The WSJ says the Dubai Investment Fund has gobbled up a significant stake in Japan's precious Sony. This follows a recent Abu Dhabi investment in the U.S.'s AMD (which served as fodder for a popular Fox Business blooper that resulted in the temporary creation of a new Arab country called "Abu Dubai"). Think Middle East tensions are high now? Just wait until the oil sheiks try to trade for something like the Empire State Building.
But does this new trend in world trade--we buy oil from the Middle East, they buy companies from us?--actually matter? In one sense, yes, and in one sense, no.
The way the trend matters is that our constitutional-right-to-cheap-gas folks still appear eager to drive Hummers until we've traded everything we own for every last drop of oil in the Middle East (with the alternative being, horrors, a gas tax and environmental incentives). Perhaps the inevitable prospect of Dubai buying the Empire State Building will finally wake these folks up. More likely it won't.
The way the trend doesn't matter--or is at least isn't news--is that we Americans have been selling off bits of our country (and our future wealth) for decades, in order to finance the purchases of all those Hummers, et al. The free flow of capital is good, but the underlying trend here isn't: The rest of the world lends us money so we can do what we do best--shop--and then they take our dollars and, sensibly, buy our assets (at least for now).
It this alarming? Possibly. (If it continues, we'll all be able to look forward to a life as international-owned company employees). But the good news is, if we're committed to this future, it doesn't really matter whether we sell our assets to England, Germany, Japan, China, or...Dubai.