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Anatomy of a debacle
Posted by: McQ on Tuesday, March 14, 2006

I've been thrashing around for a way to voice my dismay on the way the Dubai port deal ended. Thankfully Robert Samuelson came to my rescue:
The idea of letting an Arab-owned company, Dubai Ports World, run container terminals at some major U.S. ports struck many Americans as an absurdity. Why not just turn control directly over to al-Qaeda? In late February, a CBS News poll found that 70 percent of respondents were against the deal and only 21 percent in favor. The company's withdrawal last week can be seen as a triumph of public opinion. Or it can be acknowledged for what it is: a major defeat for the United States, driven by self-indulgent politicians of both parties who enthusiastically fanned public fears.

Leadership in a democratic society requires a willingness and ability to challenge and change public opinion when it is based on misinformation, no information, prejudice or stupidity — as it was in this case. There never was a genuine security problem. The Dubai company wouldn't have ``taken over'' the U.S. ports. It simply would have run some terminals. Cargo would still have been handled by American, unionized longshoremen. The Coast Guard and the U.S. Customs and Border Protection agency would still have been responsible for port security.
To Bush's credit he tried to exert some leadership. But when politicians smell political blood in the water and perceive a chance to gain from spilling more, they find it more than difficult to resist.

Terminal managment in the ports, as Samuelson points out, has never been about security. In terms of security, nothing really changes whether the terminal is managed by Dubai or a British company.
Faced with ever-increasing opposition in Congress fueled by public opinion, DPW announced that it was dropping the port deal, and would "transfer" the lease to an American company. But even if the deal had gone through, Dubai — despite what politicians and columnists said over and over again — would not have “owned,” “controlled” or “taken over” the ports. The port is owned by the taxpayers and controlled by state and local governments. The lease that DPW had purchased from a British company was simply to manage the facilities.

“It’s not like foreigners are just coming in and doing their own thing,” said Captain Timothy Ferrie, a ship pilot and president of the Maritime Society of New York City. “There’s American involvement every step of the way.”

Those who know the waterfront best also point out that foreign companies –- even some with close ties to governments that the U.S. considers dangerous –- have been operating on the waterways for years. A high-ranking official in the Communist Party in China is in charge of a company that for the past ten years has managed a facility on Staten Island that not only handles cargo ships, but also deploys military equipment for the U.S. Army.
The Bush administration's problem with this deal was it never anticipated it would be elevated to the level it was politically. The administration was blindsided .... ambushed. It was unable to marshal the arguments and facts necessary quickly enough to overcome the faux national security drivel being put out there by the fear mongers from both Congressional parties. As Samuelson says, they "enthusiastically fanned public fears".

Democrats did it because they saw a cheap political opportunity to burnish their tarnished national security credentials. That it also had the added bonus of defeating something the Bush administration wanted made it irresistable. It cost them nothing.
Privately, many Democrats conceded the xenophobic and anti-Arab strains to their rhetoric made them uncomfortable. But opinion polls that showed the issue hurting Bush's popularity and GOP chances in November prompted them to step up their attacks.
Unfortunately the Republicans did it for much the same reason. In both cases their opposition to the deal was either ill informed or uninformed and it was certainly short-sighted. While it cost them little politically, what it did cost this country could end up being incalculable.
As political theater, the posturing might be harmless. But all the grandstanding — precisely because the criticisms were overblown — damages American interests. It's a public-relations disaster in the Middle East. The United Arab Emirates — of which Dubai is a part — has been a strong American ally, permitting the use of its ports and airfields for U.S. ships and military aircraft. Dubai's ruler, Sheik Mohammed bin Rashid Al Maktoum, is trying to integrate his city-state into the world economy. There's been a building boom of offices, malls and luxury hotels. Dubai has also gone on a global investment binge; that's how it came to own some U.S. port operations.

If this isn't what we want from Arab countries, what do we want? Much bitterness is reported in Dubai, especially among those who are pro-Western. They blame racism. That's understandable and perhaps correct. A Washington Post poll last week found that 46 percent of Americans had a negative view of Islam — a crude proxy for Arabs. (Yes, not all Arabs are Muslim, and not all Muslims are Arabs. But the poll is still suggestive of American opinion about Arabs.)
It ends up reinforcing stereotypes about America. I pointed to China's reaction to our report on their human rights abuses and how it all but laughed us off by pointing to Guantanamo, torture, secret prisions, Abu Ghraib and the NSA wiretaps. A number of commenters were upset by the comparison.

So, given the facts about how security really works in our ports, how do we explain the Dubai deal then? Do we just claim that we just feel safer if Arabs aren't in charge, because, you know, they were who made up the 9/11 highjackers? And, gee, they're also the guys who are involved in trying to kill us in Iraq (well except for those pesky Persians, uh, and Egyptians. And the Indonesians? They just go after Aussies. Morroccans? Spanish.)?

If the world says "well the US does have a history of racism", how do we answer, given the Dubai deal and given the facts?

I've heard opponents get all huffy when the word 'xenophobia' is tossed around. But, again, given the facts (facts available to everyone to include our politicians) what do you call the over-reaction by some of the politicians who now insist that the terminals must be managed by Americans?

As David Marchick points out:
"There is a cycle of backlash against foreign ... investors at times of insecurity in the U.S.," said David Marchick, a Washington attorney and co-author of the soon-to-be-released book "U.S. National Security and Foreign Direct Investment."
Now we may perfer not to call that xenophobic, but then we don't get the last word, do we?

And given this latest validation of the stereotype (whether you agree it is true or not), the real damage it may wreak may still be on the horizon:
The ports furor also hurts the United States in another way. It weakens confidence in the dollar as the major global currency. The U.S. trade deficit now spews more than $700 billion into the world annually. To some extent, global economic stability depends on foreigners' keeping most of those dollars. Mass dollar sales could trigger turmoil on the world's currency, stock and bond markets.

People outside the United States hold dollars because they believe the currency maintains its value and offers a wide menu of investment choices. The message from Congress is that the menu is shorter than people thought. Once any investment is stigmatized — rightly or wrongly — as a ``security problem,'' Congress may act against foreigners.

Every country has the right to protect its security interests. But those interests must be defined coherently and not simply as the random expression of political expediency. That's what happened here, as it did last year when Congress pressured a Chinese oil company (Cnooc) to withdraw its bid for a U.S. firm (Unocal). The more this process continues, the more it corrodes confidence in the dollar.

It will be said that other countries are equally nationalistic and political, so their currencies aren't realistic alternatives to the dollar. Not true. If we imitate the French or Malaysians, the dollar will have compromised its special status. The irony is that the people who are creating all these risks are the very same members of Congress who claim to be protecting us.
If we continue to let the fear mongers among us fan the flames of xenophobia and faux national security concerns as was done with both the Unocal and Dubai ports deal (one wonders when we'll kick Citgo out of the US) it lowers confidence in the reliability of the US as a trading partner and consequently in the realiability of the dollar. Let me tell you something folks, if there were ever a serious move to replace the dollar with a realistic alternative we would be in a whole heap of trouble.

As Samuelson alludes, short-sighted politics, as we saw with the Dubai deal, can do a lot of long-term harm. The scenario he outlines is certainly not farfetched. In the case of the Dubai port deal our politicians succumbed to the lure of cheap political gain over leadership. They took the opportunity to fan irrational fear.

Unfortunately and to our possible economic disadvantage, the majority of us bought into that irrational fear.
 
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Or not McQ... as Frist pointed out, DPW may NOT find a buyer in the US to manage the ports and thent he deal will most likely go thru... Like many things political, much sound and fury and then what was going to happen, happens.
 
Written By: Joe
URL: http://
"To Bush’s credit he tried to exert some leadership."

You can’t lead from the rear. Bush, had he been aware of what his own branch of government was doing, could have pre-empted the panic and presold Americans on this deal. The parade had passed by before he ever picked up a baton.
 
Written By: The Owner’s Manual
URL: http://gcruse.typepad.com
You can’t lead from the rear. Bush, had he been aware of what his own branch of government was doing, could have pre-empted the panic and presold Americans on this deal.
Did you miss the part where I noted that they were amubshed by this, Gary?
 
Written By: McQ
URL: http://www.qando.net/
I never got that far, I guess. Does anyone ever read all the way to the bottom of one of those treatises? :)
 
Written By: The Owner’s Manual
URL: http://gcruse.typepad.com
Probably not, but it sure would make their comments seem a lot more informed. ;)
 
Written By: McQ
URL: http://www.qando.net/
McQ, I managed to read to the bottom, but let’s be honest... you and Gary just hit on the answer to the point made in your podcast about the difficulty in getting libertarian ideas out there to the masses. Those ideas require just enough thought and research as to be too much a pain in the ass for most Americans - a majority, which as you note is dangerous in our democratic poll-driven society.

Nobody I know who was opposed to the deal would have read enough of your article to learn anything. They want a message on a T-shirt. Without some pop-libertarianism, our ideas will be victim to political bloodlettings like this one.
 
Written By: Wulf
URL: http://www.atlasblogged.com
Pop-libertarianism, sounds like an idea for someone to start a new blogsite.

Acutally, libertarian ideas should be easy to sell. Imagine if we lived in a much more libertarian society. And then someone comes along and proposes some new restrictions on freedoms, supposedly for the greater good. Most would wonder what on earth they are talking about.

Regulations and welfare state policies have been around for so long now, they just somehow seem normal even though they are hard to explain. "We took some or your freedom away because ...".
 
Written By: Dan Morgan
URL: http://www.nospeedbumps.com
As someone who spends his morning trading currencies, when the governor of the UAE central bank, Sultan Nasser al-Suweidi, says the bank is looking to convert 10 per cent of its reserves ($23 billion) from dollars to euros, it makes for some easy pickins. But it don’t look to good for the dollar. Saudi Arabia may follow suit.

Jim Rogers, like him or not, no financial dummy, was saying the other day this ports deal is similar to what happened in the early 30’s, and says thats where we may be headed.
 
Written By: Wilky
URL: http://
You don’t need to be a libertarian to think the port deal was not a big deal and should have gone through. You just need to be slightly informed on the matter beyond the headlines screaming "Arabs to control key ports."

 
Written By: Harun
URL: http://
Even if this is the first time the administration has been ambushed, their response was pathetic. One could assume that a group of experienced, competent professional political operatives should have some ability to cope with an ambush.
 
Written By: timactual
URL: http://
I think that’s why you’re starting to see stories about the WH staff being burnt out.
 
Written By: McQ
URL: http://www.qando.net/
Here’s that heap of trouble...

http://www.newropeans-magazine.org/index.php?option=com_content&task=view&id=3463&Itemid=85

March 20 to 26, 2006: Iran-USA, beginning of a major world crisis
Written by LEAP/E2020
Saturday, 25 February 2006
March 20 to 26, 2006: Iran-USA, beginning of a major world crisis, or «the End of the Western World we have known since 1945».

The Laboratoire européen d’Anticipation Politique Europe 2020, LEAP/E2020, now estimates to over 80% the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929. This last week of March 2006 will be the turning-point of a number of critical developments, resulting in an acceleration of all the factors leading to a major crisis, disregard any American or Israeli military intervention against Iran. In case such an intervention is conducted, the probability of a major crisis to start rises up to 100%, according to LEAP/E2020.


An Alarm based on 2 verifiable events
The announcement of this crisis results from the analysis of decisions taken by the two key-actors of the main on-going international crisis, i.e. the United States and Iran:



- on the one hand there is the Iranian decision of opening the first oil bourse priced in Euros on March 20th, 2006 in Teheran, available to all oil producers of the region ;


- on the other hand, there is the decision of the American Federal Reserve to stop publishing M3 figures (the most reliable indicator on the amount of dollars circulating in the world) from March 23, 2006 onward[1].
(more at the link)
 
Written By: Weisbrot
URL: http://
The Bush administration has spent 5 years demonizing Arabs, saying over and over that any one of them out there might be a terrorist; that we are in greater danger than during the Cold War; so that we must preemtively invade countries before they have a chance to harm us, etc. 70% of the people obviously believe it. Why is it now "cheap" for democrats to exploit what Bush has been exploiting for 5 years?

It appears that you are really in favor of the deal only because during the last 5 years America has gone into such debt and had such a trade deficits that we are vulnerable to these same Arabs you want to have invest here. Shouldn’t you be criticizing the Administration for spending more than it takes in in taxes? Shouldn’t you be criticizing the Administration for failing to take the steps necessary to correct our trade deficit? Whose fault do you think it is that we have to give in to this deal because we are economically weak?
 
Written By: Albert Lawler
URL: http://
"Even if this is the first time the administration has been ambushed, their response was pathetic. One could assume that a group of experienced, competent professional political operatives should have some ability to cope with an ambush."


That’s because they were ambushed by their own bullets. Ever since 9.11, they have been manipulating people with mis-information, no-information, and most importantly the fear factor — if you are not on my side, you are on the terrorists’ side; if you don’t support me, you are helping terrorists; then you are unpatriotic and you are jeopardizing the national security. "National Security" has become the most abused word by the Bush administration. They can do whatever they want in the name of "protecting national security". Now coming to the DPW deal, how could they defend themselves? The criticism on the DPW deal just sounded so familiar to me — didn’t I just hear it from Bush himself?
 
Written By: DJ
URL: http://
It appears that you are really in favor of the deal only because during the last 5 years America has gone into such debt and had such a trade deficits that we are vulnerable to these same Arabs you want to have invest here.
And where, pray, did you find that to "appear" in the post here?

Looks more like an uninformed assumption to me.
Shouldn’t you be criticizing the Administration for failing to take the steps necessary to correct our trade deficit?
You obviously don’t read this blog very much.
Whose fault do you think it is that we have to give in to this deal because we are economically weak?
This has nothing to do with being ’economically weak’, for heaven sake. This has to do with screwing with the foundations of our economic security.
 
Written By: McQ
URL: http://www.qando.net/
That’s because they were ambushed by their own bullets. Ever since 9.11, they have been manipulating people with mis-information, no-information, and most importantly the fear factor — if you are not on my side, you are on the terrorists’ side; if you don’t support me, you are helping terrorists; then you are unpatriotic and you are jeopardizing the national security.
While that’s a neat little rant, I’d appreciate it if you’d provide some substance to the charge that the UAE equals "terrorists" now or in the past.

Maybe I’ve missed it.
The criticism on the DPW deal just sounded so familiar to me — didn’t I just hear it from Bush himself?
It may have just been the voices in your head. Seriously, I’d be interested in something concrete which gives validity to your charge. When did Bush ever equate the UAE or Saudi Arabia or any Arab nation other than Syria (who would deserve such a label) with "terrorists"?
 
Written By: McQ
URL: http://www.qando.net/
OK Weisbrot, elaborate please... cryptic postings don’t make a point.
 
Written By: Joe
URL: http://
When did Bush ever equate the UAE or Saudi Arabia or any Arab nation other than Syria (who would deserve such a label) with "terrorists"?
No sir, President Bush has never made any link between dictatorships that practice and educate in fundamentalist/salafist Islam and terrorists who fight for fundamentalist/salafist Islam and recruit young men educated in that religion. If anybody makes any connection then it is because of voices in their head.
 
Written By: Unaha-closp
URL: http://
I think it’s a mistake to characterize the White House as "ambushed" by the public and political furor over the DPW deal, as if the Bush administration had been innocently following a consistent course of sensible policies until now.

Rewind the tapes to September 11th, 2001. When it appeared that 19 Muslims of Arab origin were responsible for the attacks, loyal Arab-Americans felt universal outrage and revulsion at what had been done ostensibly in their name. Within just a couple of weeks, however, the FBI managed to turn this instinctive groundswell of love and gratitude for America into hatred of the FBI. The opportunity for leadership has existed from that moment for Bush—or anyone at all, really—to show that the antidote to terror is courage, not bigotry; compassion, not brutality; reason, not demagoguery. But instead of promoting a spirit of national community as the means to oppose the enemies of freedom, Bush and others have profited politically and financially by continually feeding a kind of low-level hysteria, keeping Americans divided from one another and unable to grapple with the real causes of their problems.

What is truly striking is how this pattern has been followed by so many governments around the world, as leaders have chosen to meet the crisis in democracy by consolidating their own power, rather than defending the values of liberty.

Aside from the invasion of Afghanistan, there has hardly been a single logically defensible response to the threat of terrorism by the United States since 9/11. When so much bad government has become the norm, and a tidal wave of faulty decision-making pervades all levels of our national political life, why would anyone expect vision and clarity to prevail in any area of international relations?

What the DPW deal shows is that the irrational forces that have been aided, abetted and set in motion by Bush and other American political leaders are not in anyone’s control, and ultimately even those who think they can direct the mob may well become its victim.
 
Written By: Michael Butler
URL: http://www.americanchronicle.com/articles/viewByAuthor.asp?authorID=481
All very good reasonings McQ. But I want to focus on this part:
Much bitterness is reported in Dubai, especially among those who are pro-Western. They blame racism. That’s understandable and perhaps correct. A Washington Post poll last week found that 46 percent of Americans had a negative view of Islam — a crude proxy for Arabs. (Yes, not all Arabs are Muslim, and not all Muslims are Arabs. But the poll is still suggestive of American opinion about Arabs.)
I gotta tell you, the negative view is simply NOT racism. Between the French riots, the cartoon riots, beheadings and various other troubles, the American public probably has a well-justified dim view of Islam/Arabs, no matter how many times our public officials go out of their way to remind us Islam is the "religion of peace"

So the pro-western arabs the Dubai and everywhere else really need to take this as another warning shot. When commenting on the WoT and the movement to spread Democracy in the middle east, I’ve said a few times that if this doesn’t work, next stop in American public sentiment is "kill them all and let Allah sort it out" and I think this validates that. The American street is speaking- has spoken- and "moderate" arabs would be well advised to see this for what it is and get off their asses and attempt to reclaim their religion much more vigorously than they currently are
 
Written By: shark
URL: http://
I gotta tell you, the negative view is simply NOT racism.
I never said it was, Shark. I said, given the Unocal and Dubai deals, coupled with that poll and our past that is how it will be perceived.
 
Written By: McQ
URL: http://www.qando.net/
46 percent of Americans had a negative view of Islam — a crude proxy for Arabs

This strikes me as almost exactly backward. Americans have a negative view of Islam, not of Arabs. Often loose-talking persons will rant about "Arabs", but my personal experience is that if questioned, what’s really bothering them is Muslims. The close identification of "Arab" = "Muslim" in the public view obscures this but it’s there. (That identification is not solely hostile, either - I recall a book by an American convert to Islam noting how many of his fellow converts started wearing Arab clothing and adopting Arab living customs.)

(And why make the assumption, with no support at all, that when Americans say they have a negative view of Islam they "really" mean Arabs? Just to shove the "racist" shiv in? Saying that the poll "is still suggestive of American opinion about Arabs" doesn’t make it so.)
 
Written By: jaed
URL: http://bittersanity.blogspot.com
"I think that’s why you’re starting to see stories about the WH staff being burnt out"

I don’t think much of burn out as an excuse. After awhile, response to this kind of thing should be reflexive, and not require imagination or even much conscious thought. That is what education, training, and experience are supposed to do.
 
Written By: timactual
URL: http://
loyal Arab-Americans felt universal outrage and revulsion at what had been done ostensibly in their name.
Well, they certainly were discreet about expressing this alledged outrage, and that "groundswell" of love and gratitude certainly didn’t knock anyone over. And since Bush did everything but convert to Islam himself to show that Islam and Muslims were peaceful, what anti-Islamic hysteria are you talking about? maybe you are confusing that with the ant-anti-Islamic hysteria which still afflicts many on the left here. You remember, all those imaginary cases of persecution and violence flaunted by CAIR, etc.
 
Written By: timactual
URL: http://
The Bush administration has spent 5 years demonizing Arabs, saying over and over that any one of them out there might be a terrorist; that we are in greater danger than during the Cold War; so that we must preemtively invade countries before they have a chance to harm us, etc. 70% of the people obviously believe it. Written By: Albert Lawler

Let’s not forget our friends.
 
Written By: ac
URL: http://

 
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