I used to assume that support of free-market capitalism was a basic tenet for Republicans. Note that I said “used to,” as it no longer seems to be the case.
Late Monday night I saw two different posts on Facebook (one from a major California Republican Party official and another from on a large Tea Party group wall) of an article from Breitbart, titled “Hotel del Coronado Sold to Chinese in $6.5B Package.”
One post said this as the lead-in:
“Whether you knew it or not, the Chinese own a very large portion of American enterprises right here on our soil. I first started following the trend in the 1980's when they bought Rockefeller Center in Manhattan and they now also hold ”Trillions“ of America's debt. Bad deals people.... Someone was giving away the store!”
The other simply said this:
“America is losing!”
Setting aside the fact that it was Mitsubishi, a Japanese company, that briefly owned a portion of Rockefeller Center in the 1980s, the posts caught my attention for several reasons.
Firstly, China is not a leading source of direct investment in the United States. Over 79% of foreign investment is from other countries (as of 2014):
For 2012 and 2013, China ranked 14th:
Identifying China as some sort of huge American asset-holding bogeyman is utter nonsense. They simply aren't.
For the sake of argument, however, let's assume that China was the number one investor in America. In fact, let's assume that they were the only one.
The article about the deal can be summarized in two simple steps:
- Private equity firm Blackstone bought 16 hotels in December of 2015 for $3.93 billion.
- They just sold them for $6.5 billion, a $2.57 billion profit in less than 100 days.
By any measure, this is a spectacularly successful investment. It would not be possible to describe this as a “bad deal” or as “America is losing.”
Furthermore, it's actually not America that is doing the deal (and the winning), it's the Blackstone Group and their investors. They risked a huge amount of capital and were rewarded handsomely for doing so. Now, presumably, they'll put that money back to work somewhere, seeking out opportunities for further investment and returns.
It cannot be important, from the financial perspective, whom the buyers are. For whatever reasons and motivations, willing buyers and sellers agreed to a transaction in which both parties have an interest in completing. Unless one is an investor on either side of the deal, what business is it of yours?
Both of these Facebook posts, however, clearly implied that the deal (1) somehow could have been better financially and (2) would have have been improved had the buyer been from another country. The language echoes words and phrases used by Donald Trump, although his name was not explicitly mentioned. It wasn't a big leap to conclude that they were further implying that the right kind of C.E.O. President would have been able to add value to both (1) and (2).
This is where my ire really gained steam.
Do Republicans really want governmental intervention in private transactions? Have they concluded that some magic person can insert themselves to improve upon what the involved parties have come to agreement upon, despite an entire history of humanity in which this has never happened?
I'm a big fan of the HGTV show “Flip Or Flop.” It's a reality show about an Orange County, CA-based couple who buy and sell homes. It chronicles the risks they take in purchasing and improving a house, and then shows the challenges of trying to earn a profit by selling it. Sometimes they do extremely well and sometimes they don't.
Imagine however, if they had the additional constraint of some uninvolved third-party government official who had influence on the process. What if the couple, whose entire livelihood is dependent on their intimate knowledge all of the intricacies of buying and selling real estate, were told by the government - just before closing the deal - that the agreed-upon price was too low or that the buyers were from a disfavored group?
Heads would rightly explode. It would be an egregious imposition to which the vast majority of people would object. In this situation, the proper role of the government would be to expeditiously transfer ownership or provide a means via the court system to enforce the terms of the contract. And nothing more.
Expanding the size of the transaction, from the hundreds of thousands that the television show deals with to the thousands of millions that the Blackstone Group deal represented, should make absolutely no difference. The buyers, although maybe interesting from a news perspective, should make absolutely no difference, either.
I do not want any public intervention in private buying and selling, whether under the flag of nationalism or another collective-focused motivation. Aside from arms deals or other security-threatening technologies, I want government to merely define a playing field and referees to adjudicate the rules. In other words, I want free-market capitalism. I'm upset and grieved that some on the GOP side of the aisle now disagree.
If someone thinks that higher profits should be required on transactions or that certain types of buyers should be discluded, they are free to do that in their own business. I don't want them to impose that on mine or anyone else's.