Wednesday, July 13, 2005
Woolsey vs the Economoids
I've mentioned the impending takeover of Unocal by the Chinese government before. Now it looks like Congress is getting down to business, hopefully with a good result.
James Woolsey, who is rarely if ever wrong, gave this strong statement to the committee:
[Crudely hand-transcribed!]
We are dealing here not in any reasonable sense with a takeover attempt by one corporation of another; we are dealing with a takeover attempt by an organ of the most powerful Communist dictatorship in the world.
It elevates form over substance in the extreme to regard this undertaking as something being done -- in any sense of the word -- by a private corporation simply for economic reasons. CNOOC has received a $7 billion loan from the Chinese state [for the takeover]; this acquisition will result in a 50% increase in offshore pumping capability for China. Now, I recognize that there is utility in encouraging China to move from its current system toward ... some aspect of economic freedom, and toward democracy and rule of law, as has happened in Taiwan, South Korea, and the Phillipines. As prosperity came upon them, they moved toward democracy.
We may hope that China turns toward democracy and the rule of law. But it may also do what dictatorships are wont to do, namely to find an external enemy against which to rally its people. Taiwan ... is the most likely way for them to go in seeking a foreign enemy.
Some would counsel that because China holds a great deal of US debt, we must be cautious. It's true that we borrow 250 billion per year to pay for our imported oil; also true that we would be most wise to turn toward domestic production, but that's another topic.
If we start down the path of saying that we cannot stand up to China in this attempt to take over a very strategic part of our economy, because they own a large part of our debt, we will already have lost. China invented strategy many thousands of years ago. For anyone who believes that this is purely a commercial undertaking, unrelated to a national strategy of domination of energy markets and of the Western Pacific, I would suggest that this view is extraordinarily naive.
Frank Gaffney appeared after Woolsey, lining out an extra dimension to the takeover. Unocal owns a mine in Central California (Molycorp) which is the only major US source of rare-earth minerals (Lanthanum, neodymium, etc.) These minerals are not household words, but they are critical parts of industrial production and specialized military equipment. This mine has been CLOSED since the mid-90s because the state-sponsored terrorist organization EPA attacked it with lawsuits. Gaffney believes that China may have steered the Clinton admin toward this closure as part of its long-term strategy.
Here's an article on MolyCorp vs EPA, mentioned by Gaffney.
Later on, the hearing heated up, as Jerry Taylor of Cato defended the economoid side with this weird argument: China is only trying to advance its own economic interests, so we shouldn't try to advance our own by stopping this acquisition. Rep. Weldon of PA gave a magnificently fiery response. I don't think I've EVER heard anything better from a Congressman!
¶ 6:36 PM
I've mentioned the impending takeover of Unocal by the Chinese government before. Now it looks like Congress is getting down to business, hopefully with a good result.
James Woolsey, who is rarely if ever wrong, gave this strong statement to the committee:
[Crudely hand-transcribed!]
We are dealing here not in any reasonable sense with a takeover attempt by one corporation of another; we are dealing with a takeover attempt by an organ of the most powerful Communist dictatorship in the world.
It elevates form over substance in the extreme to regard this undertaking as something being done -- in any sense of the word -- by a private corporation simply for economic reasons. CNOOC has received a $7 billion loan from the Chinese state [for the takeover]; this acquisition will result in a 50% increase in offshore pumping capability for China. Now, I recognize that there is utility in encouraging China to move from its current system toward ... some aspect of economic freedom, and toward democracy and rule of law, as has happened in Taiwan, South Korea, and the Phillipines. As prosperity came upon them, they moved toward democracy.
We may hope that China turns toward democracy and the rule of law. But it may also do what dictatorships are wont to do, namely to find an external enemy against which to rally its people. Taiwan ... is the most likely way for them to go in seeking a foreign enemy.
Some would counsel that because China holds a great deal of US debt, we must be cautious. It's true that we borrow 250 billion per year to pay for our imported oil; also true that we would be most wise to turn toward domestic production, but that's another topic.
If we start down the path of saying that we cannot stand up to China in this attempt to take over a very strategic part of our economy, because they own a large part of our debt, we will already have lost. China invented strategy many thousands of years ago. For anyone who believes that this is purely a commercial undertaking, unrelated to a national strategy of domination of energy markets and of the Western Pacific, I would suggest that this view is extraordinarily naive.
Frank Gaffney appeared after Woolsey, lining out an extra dimension to the takeover. Unocal owns a mine in Central California (Molycorp) which is the only major US source of rare-earth minerals (Lanthanum, neodymium, etc.) These minerals are not household words, but they are critical parts of industrial production and specialized military equipment. This mine has been CLOSED since the mid-90s because the state-sponsored terrorist organization EPA attacked it with lawsuits. Gaffney believes that China may have steered the Clinton admin toward this closure as part of its long-term strategy.
Here's an article on MolyCorp vs EPA, mentioned by Gaffney.
Later on, the hearing heated up, as Jerry Taylor of Cato defended the economoid side with this weird argument: China is only trying to advance its own economic interests, so we shouldn't try to advance our own by stopping this acquisition. Rep. Weldon of PA gave a magnificently fiery response. I don't think I've EVER heard anything better from a Congressman!
¶ 6:36 PM
