Mitsubishi runs “Buy American” ads, because most of itsnconsumer electronics are built here. Mitsubishi also has an50-50 joint venture with Chrysler, which builds the PlymouthnLaser and Eagle Talon in Illinois. Ford likewise ownsn25 percent of Mazda, which builds the excellent ForddesignednProbe in Michigan. Such cars are already replacingnimports, and can be easily exported in large quantities asnsoon as production catches up with a long list of waiting USnbuyers. Would the US really be better off without thesenbrand new state-of-the-art auto plants? Does anyone reallynbelieve that Ford, Chrysler, or CM could and would havenbuilt similar plants and cars on their own, without anynforeign money or technology? Japan’s newest and best autonand tire factories aren’t being built in Japan — they’re here.nThe same is true of the many German and Swiss chemicalnand drug companies — such as BASF, Ciba-Gigny, Sandoznand Hoechst — that employ many of my neighbors in NewnJersey. Australian gold-mining companies have unleashed annew gold rush in the US. Canadian paper companies havenexpanded US capacity.nIt is true, of course, that any dividends and capital gainsnfrom successful foreign enterprises in the US will go to thosenwho made these businesses possible. That usually means anmixture of US and foreign investors, as in the Ford-Mazdanand Chrysler-Mitsubishi deals. But if those supplying thenfunds happen to live in Zurich or London, paying interestnand dividends on investments in successful enterprises is nonmore of a “burden” on the rest of us than if they lived innDes Moines. The main point is that we have the jobs andnthe tax base, even if part of the dividends go abroad.nThe benefits from foreign takeovers of existing plants arensomewhat more subtle than in the case of brand newnfactories, but nonetheless real. The New York Times recentlynGREAT TOPICS, GREAT ISSUES!nWoman’s Work – October 1989 – ThomasnFleming on the idea of the equality of thensexes, Mary Pride on the state of homeschoolingnin America, Janet Barlow on thenworthiness of women’s magazines, andnshort stories by Kit Reed and LeonnSteinmetz. Plus Priscilla Buckley discussesnher work for United Press in the 1940’s,nForrest McDonald on the history of the 14thnAmendment, and Jean Elshtain’s review ofnAllan Carlson’s Family Questions.nThe State of the Family Farm – Novembern1989-Anita Evangelista on the unexpectedncomeback of the small farm, Odie Faulk onnthe lure of rural life, and Chilton Williamson,nJr. on Edward Abbey and the state ofnAmerican ranching. Plus Wayne Austermannon the banning of semiautomatic weapons,nArnold Beichman on the Pollard espionagencase, Robert Shaw on the poetry of PhilipnLarkin, and Richard Lamm on the world ofnpublic policy.nBACK ISSUE ORDER FORMnEach issue $2.50 (postage & handling included)nTitle/Date Qty.nWoman’s WorknThe State ofthe Family FarmnNamenAddressnCity- State .nMail with check to:nChronicles • 934 N. Main Street • Rockford, IL 61103nTotal Enclosed $_n-Zip.nCostnCB489nL :__ 1 _ _ln24/CHRONICLESnnnwrote that foreign takeovers of ailing US firms “are creatingnserious competitive threats to American companies. . . . Fornexample, the Goodyear Tire and Rubber Company isnthreatened by the new, more powerful Firestone.” Japan’snBridgestone doesn’t sell nearly as many tires as Goodyear,nand no Japanese tire stacks up very well in recent tests bynCar and Driver. But Bridgestone plans to pour $1.5 billionninto the ailing Firestone Company in three years, to try tongive Goodyear a run for its money. That’s called competition,nand it’s not so bad. The alternative would have beennmore imports of Bridgestone tires, rather than more andnbetter US-made Firestones.nThe facts about foreign investment are readily available innMack Ott’s study for the Federal Reserve Bank of St. Louis,nor in Michael Becker’s pamphlet for Citizens for a SoundnEconomy, but they have little influence on what is essentiallyna theological dispute. Foreigners hold about 1 percent ofnUS farmland, 6 percent of US stock, 13 percent of corporatenbonds, and 15 percent of all federal, state, and local debt. YetnUS direct investment in other countries still exceeds foreignninvestment here. And foreign ownership is now a largernshare of all major countries’ stocks and bonds because ofngreatly increased international diversification of investments.nSome 36 percent of German government bonds have beennsnapped up by foreigners in recent years, including Americans.nCanada has been importing capital every year since thencountry’s birth, and it still has a foreign debt in excess of 40npercent of CNP. Yet without all those American andnEuropean mills, mines, and factories, Canada would have anstandard of living similar to that of Mexico.nIn what sense does the fact that some foreign investorsnhave a large or controlling share of a few US companiesnmean that they “control” anything? They cannot forcenAmericans to buy their products, or their securities, or tonwork in their plants. The critics want to have it bothnways — arguing that three million jobs involved in foreignownednfirms doesn’t amount to much, and yet also arguingnthat we will somehow all end up slaves to foreign employers.nIn what sense does foreign investment hamper USnpolicy? It supposedly means the Federal Reserve can’tndebauch the dollar with impunity, since foreigners willndemand higher interest rates on bonds to compensate for thenexchange rate risk. But that is equally true of Americanninvestors, who would fly back into Swiss francs or gold, asnthey did a decade ago, if the Fed inflated.nWhat has actually happened in the past seven years is thatnboth foreign and American investors decided that theninvestment opportunities in the United States looked a lotnbrighter than elsewhere after tax rates were cut and inflationnreduced. The result has been an enormous revitalization ofnthe US economy, with manufacturing productivity rising byn4 percent a year, and the overall size of the economy (realnCNP) a whopping 30 percent larger than it was in 1980.nComplaints about foreign investment are an odd mix ofncollectivist notions about “our” property, naive identificationnof multinational firms with the country where they haventheir headquarters, and raw special-interest pleading onnbehalf of restricted competition. If investment is good — andnit is — then more investment is even better, regardless whonclips the coupons. <®>n