By Eric J. Weiner
“Los Angeles Times” 06/04/08
Investment funds run by foreign governments are keeping the U.S. afloat.
America’s for sale. Just ask Treasury Secretary Henry Paulson.
With the U.S. economy in shambles, Paulson just spent four days touring the Middle East, hat in hand, looking for investors to bail us out. Specifically, on Monday, Paulson met with heads of the Abu Dhabi Investment Authority, the world’s largest “sovereign wealth fund” with roughly $875 billion in assets, and encouraged them to buy American businesses.
Of course, it’s nothing new for U.S. officials to reach out to the deepest pockets in the world in times of crisis. Just a century ago, J.P. Morgan became an American icon by single-handedly rescuing the financial markets during the stock market panic of 1907.
What is new, however, is that our economic problems have become so big that they no longer can be remedied by a few affluent individuals or investment firms. Only extremely wealthy countries have the resources to clean up this mess. So Paulson is forced to visit flush, oil-slicked Arabian emirates from Qatar to Abu Dhabi and beg for help.
This is economic globalization in its most raw form — and a dramatic change in the way the worldwide economy operates. Today, the real power in international finance is held by rich countries, not wealthy institutions, corporations or private investors. And these countries are flexing their increasingly bulging muscles through investment vehicles known as sovereign wealth funds.
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