Advertisement - Click to support our sponsors.
Editorials
Monday, June 26, 2000Investors aren’t
abandoning the U.S.WITH organized labor, Ralph Nader and other misguided protectionist elements trying to make international trade an issue in the elections, it's worth asking what happened to that "giant sucking sound" caused by jobs leaving the United States for Mexico that Ross Perot predicted would follow congressional approval of the North American Free Trade Agreement (NAFTA).The issue: Ross Perot warned that passage of the North American Free Trade Agreement pact would result in a "giant sucking sound" caused by American jobs being lost to Mexico.
Apparently nobody heard that sound -- except perhaps the paranoiac Perot -- because the U.S. economy has been booming ever since the approval of NAFTA and the World Trade Organization -- another bugaboo of the protectionist crowd. Of course, investment in this country has also grown dramatically, which made the economic expansion possible.
As Daniel Griswold of the Cato Institute's Center for Trade Policies notes, since 1992 nonresidential private investment has almost doubled, from $630 billion to more than $1.2 trillion in 1996 dollars. Investment in information-processing equipment and software has more than tripled.
Perot warned that NAFTA would result in a flight of capital to Mexico. But capital hasn't fled the United States for countries with lower costs and standards. It's gone the other way. The U.S. has been the world's largest recipient of foreign investment over the last decade.
From 1994 to 1998, the U.S. received an average annual net inflow of $12 billion in foreign direct investment. About 12 percent of manufacturing workers in this country today are employed by a U.S. affiliate of a foreign-owned company.
Until the Japanese were forced to pull back, people used to complain that they were taking over the American economy -- failing to realize that foreign investment in this country is a tribute to our economic strength.
And where has American investment in foreign countries gone? Eighty percent goes to other advanced economies, not poor countries with low wages. In 1998 the main destinations were Britain, Canada, the Netherlands and Germany -- none of which can be considered underdeveloped.
American manufacturers are net investors in Mexico and Canada, but the amounts involved are relatively small. From 1994 through 1998 average net outflow of foreign investment in manufacturing to Mexico averaged $1.7 billion, to China $661 million. By comparison, domestic investment in U.S. manufacturing in 1997 totaled $192 billion.
Because economics is not a zero-sum game, it is in the American interest that other countries become prosperous. Investment of U.S. capital in foreign countries, particularly the poorer ones, should be encouraged as a way to raise living standards and perhaps stabilize unstable governments, which would mean more markets for U.S. products and fewer security threats for diplomats and generals to contend with.
But the flight of U.S. capital to low-wage countries is a myth.
UH independence
OXFORD University has a tradition of awarding honorary degrees to its alumni who become prime minister. But Margaret Thatcher was denied an Oxford honorary degree in the 1980s as a way of protesting education budget cuts. Now Tony Blair won't be getting one, either.
This time the university is taking revenge for an assault by the Blair administration on elitism at Oxford and Cambridge.
Chancellor of the Exchequer Gordon Brown recently denounced as "an absolute scandal" a decision by Oxford's Magdalen College to deny a place to a girl who did not attend a fancy private school.
The chancellor of Oxford, Lord Jenkins, responded by saying there would be no honorary degree for the prime minister, at least for the time being. "There should be no question of governments, or agents of governments, deciding which individual should or should not be admitted to university," Lord Jenkins declared.
That statement is a reiteration of the principle of academic freedom from government interference. The great universities have it and are willing to defend it -- as Oxford is doing.
The University of Hawaii has had the reputation of being plagued by politics. State legislators and other elected officials have rarely hesitated to apply pressure to obtain positions at UH for their friends and to promote their pet academic programs. The reputation has sometimes been a problem in recruiting UH presidents.
To his credit, the current president, Kenneth Mortimer, has lobbied for greater autonomy for the university, and with considerable success.
In the last legislative session he won passage of a constitutional amendment to be placed on the November ballot that would grant UH self-governance over its internal structure, management and operations. The amendment would make permanent authority previously granted by the Legislature as a result of Mortimer's efforts.
WE'RE not suggesting that UH follow Oxford's example and snub an alumnus who became governor -- or president. But UH administrators and regents should stand up to the politicians when necessary and make it clear that they are running the university, not the people in the state Capitol.
Without independence the university won't be able to attain the excellence it aspires to -- and that we all want for it.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
