BUYING INTO AMERICA: How Foreign Money Is Changing the Face of Our Nation by Martin & Susan Tolchin Tolchin

BUYING INTO AMERICA: How Foreign Money Is Changing the Face of Our Nation

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An evenhanded and persuasively documented case for controlling--if not restricting--foreign investment in the US. Drawing upon anecdotal as well as statistical evidence, Tolchin (a national correspondent of The New York Times) and his wife (Public Administration/George Washington Univ.) log the many ways in which the domestic economy has become reliant on overseas capital. Foreign investors, the authors show, have acquired significant real-estate holdings, plus controlling interests in industrial enterprises and financial institutions from coast to coast; they're also mainstay purchasers of Treasury bills and other government securities. The roughly $1.5 trillion that outsiders have committed to the US, the Tolchins concede, yields a wealth of benefits, not the least of which is jobs. On the minus side of the ledger, however, is that foreign investors have become deeply involved in US politics, e.g., leading the decade-long battle to repeal California's unitary tax. In addition, they expect--and frequently receive--the same nurturing treatment they get in their homelands. After cataloguing the government interventions which helped Japanese interests rescue a foundering Firestone tire plant in Tennessee, to illustrate, the Tolchins wryly conclude that the US seems to be practicing industrial policy for foreign multinationals whilst preaching a free-market philosophy in the States. Nor, the authors argue, does America secure worthwhile returns from its open, effectively unattended door; in fact, they warn, the nation may be surrendering significant measures of sovereignty by default. Meanwhile, the Tolchins observe, Washington continues to strike Faustian bargains to attract the offshore funds it now needs to underwrite federal budget deficits. Also cause for concern, they contend, is the likelihood that globetrotting development officials may be giving away the store in unrecorded deals at the local level. Without espousing either protectionism or xenophobia, the authors propose a series of actions to enhance the nation's mortgaged future by making it less vulnerable to alien fiscal influence. At a minimum, they recommend, the US should hold foreign investors to the disclosure standards it demands of domestic business; similarly, the Tolchins maintain, Washington must insist on reciprocity that affords American finns comparable ease of access to key overseas markets. A disturbing and timely wake-up call.

Pub Date: Feb. 26th, 1987
Publisher: Times Books