New America on Trade and Globalization

"The Koizumi reforms" was one of the portmanteau concepts most commonly bandied about in Japanese political debates in the summer of 2009 as the parties geared up for the August election. Japan had in fact embarked on its neo-liberal agenda of deregulation and privatization well before the charismatic Mr. Koizumi laconically offered his "no gain without pain" recipes, but it was pushed with most enthusiasm during his premiership from 2001 to 2006.

German Chancellor Angela Merkel has just completed her first official visit to Washington since President Barack Obama took up office. At home Mrs. Merkel has only a few months left to go until an upcoming general election will determine her own political future. This was surely one more reason to send a message of harmony with President Obama back home, as the new U.S. president, much in contrast to his predecessor, enjoys great popularity among German voters. Elections aside, such harmonious gestures can hardly deflect

Davos Man, by all accounts, is worried. The severity of the global economic recession has alarmed many of the architects of the global economy. Fears of resurgent economic nationalism are rampant. At the same time, some world leaders - most prominently, French President Nikolas Sarkozy, as well as German Chancellor Angela Merkel - argue for instituting a new regime of regulation for the financial sector that will be global rather than merely national in scale.

Thank you Mr. Chairman and members of this committee for the honor of addressing you today.  Mr. Chairman, it is a tribute to your leadership that this roundtable is being convened in recognition of the centrality of economic and financial issues to American foreign policy. 

Over the past several months, few issues in international finance have generated as much discussion and comment as have Sovereign Wealth Funds (“SWF”s). This Committee deserves enormous credit for recognizing the potentially significant foreign policy consequences of the rapid accumulation by foreign governments of enormous, growing pools of capital. These large concentrations of government controlled wealth raise complex issues that transcend traditional boundaries between foreign policy, financial markets, international economics and national security.

It is my belief, however, that too much… more

The Honorable Nova Daly Deputy Assistant Secretary U.S. Department of the Treasury

Dear Mr. Daly:

We are pleased to submit these comments with respect to the recently proposed regulations regarding the implementation of the Foreign Investment and National Security Act of 2007 (“FINSA”) amendments to Section 721 of the Defense Production Act of 1950 (“Exon-Florio”).

As a general matter, we believe that U.S. and global economic health are strengthened by the free flow of investment capital and by the increased liquidity that open… more

America’s basic infrastructure is outdated, worn, and in some cases, failing. Most experts agree that it is inadequate for meeting the demands of the 21st-century global economy. If we are to remain competitive, we must invest in capital assets like roads, ports, bridges, mass transit, water systems, and broadband infrastructure. Many other countries -- both rich and poor -- see investing in infrastructure as imperative for economic survival and success in an increasingly competitive economic environment. But the United States… more

By way of introduction, I spent most of the last seventeen years working as an investment banker and private equity investor based primarily in London, England. This experience, I believe, gives me a somewhat different perspective on Sovereign Wealth Funds and the role that they play in today’s international capital markets. Currently, I co-direct the Global Strategic Finance Initiative at the New America Foundation. The New America Foundation is a non-profit, post-partisan public policy institute in Washington D.C.

Over the past several months, few issues in international finance have generated… more

For more than a decade, rising asset prices have driven the economy, benefiting the wealthy but doing relatively little to improve either the economic status of the majority of Americans or the country’s overall competitiveness. Rising stock and housing prices created staggering short-term increases in wealth for some, but did little to bolster the nation’s preeminence in technology, industry, or agriculture.

In order to retool the economy and generate balanced, robust job growth, the government should focus… more

The amount of money now held by governments around the world both in reserves and through sovereign wealth funds (“SWFs”) represents the largest concentration of investment capital the world has ever known. Their sheer size and expected rate of growth raise important issues regarding both the origin of this wealth and how it is to be invested. The origin of these funds rests on two main factors: the global imbalances between debtor nations (like the U.S.) and surplus nations… more

Why aren’t Republican presidential candidates talking more about job training?

Wherever they go on the campaign trail, candidates are asked about off-shoring, layoffs, and wages. Despite the strong U.S. economy and near full employment, middle class anxiety is real.

Hardly a day goes by that some Democratic candidate doesn’t speak about the struggles of the middle class family in the age of globalization.Democrats campaigned last November on responding to working family angst through a minimum wage increase. Republicans often respond… more

Over the past decade and half, two pivotal developments have come together to create the conditions for what could be a new golden era of faster economic growth and rising prosperity. One development involves the technological advancements and other changes associated with the new economy, which have substantially increased U.S. and world productivity growth. The bursting of the tech bubble in 2000 may have put an end to the hype surrounding the new economy. But it did not undo the… more

FROM: Karen Kornbluh SUBJECT: America's Promise in A New Century DATE: August 6, 2004

Americans are concerned as they have not been since 1992 about the future of their way of life in a global economy. They sense that their kids may be part of the first generation that does worse than its parents and they don't understand… more

The fundamental challenge for human institutions in the 21st century is to create and maintain a sustainable combination of economic, social, and natural environmental conditions in an increasingly global and commercial civilization.

This challenge is not now being met. The world economy so far is failing to meet even the basic needs of a large fraction of the human population, or to protect its natural resources and the ecosystems that produce them, even as it creates unprecedented wealth… more

The large scale movement of capital in the form of financial flows and foreign direct investment is a relatively recent phenomenon despite the fact that international trade has been an important part of commerce throughout the industrial era. Such flows have constituted a major and perhaps defining part of the process of globalization over the past two decades. At the same time, the environmental problems created by industrialization have also grown to have global range, particularly as they are replicated… more

The ongoing debate over the environmental impacts of private foreign direct investment (FDI) has focused primarily on the role of multinational corporations (MNCs) in implementing diverse standards in countries at varying levels of social, economic and political development. Since the international debt crisis of the late 1980s foreign investment flows have become increasingly important, financing current account deficits as well as sustaining economic development. The flow of FDI to developing countries and emerging markets now exceeds official development assistance (ODA)… more

In the months leading up to the votes on Trade Promotion Authority (TPA), President Bush had to buy off powerful domestic constituencies with tariffs on steel and, more recently, increased subsidies for agriculture. Now that he has TPA, the President has wisely reversed course and proposed a far-reaching plan to use the Doha round of trade talks to eliminate the majority of world-government support for agricultural products by 2010. The agricultural proposal, in conjunction with TPA, will hopefully enable the… more