February 23, 2006

ALLIES AND ADULTS:

UAE Company Agrees to Delay Ports Takeover (LIZ SIDOTI, 2/23/06, Associated Press)

A United Arab Emirates company offered Thursday to delay part of its $6.8 billion takeover of most operations at six U.S. ports to give the Bush administration more time to convince skeptical lawmakers the deal poses no security risks.

The surprise announcement relieves some pressure from a standoff between
President Bush and the Republican-controlled Congress, which has threatened to block the deal because of the UAE's purported ties to terrorism.

Under the offer coordinated with the White House, Dubai Ports World said it will agree not to exercise control or influence the management over U.S. ports pending further talks with the Bush administration and Congress. It did not indicate how long it will wait for these discussions to take place.


Uproar Surprised Dubai Firm (Ben White, February 24, 2006, Washington Post)
The rapid growth of DP World mirrors the swift expansion of Dubai into a commercial power that is less and less dependent on oil wealth, which is modest by Persian Gulf standards. The glittering city-state has the Middle East's leading airline, Emirates, and has been snapping up other foreign assets, including the Essex House hotel in New York.

Dubai's leader, Mohammed bin Rashid al-Maktum, known as Sheik Mo, is the driving force behind the city's foreign investments and domestic building projects that include man-made islands shaped like palm trees, the world's tallest tower, an underwater hotel and a theme park to dwarf Disneyland.

Strategically located on the Persian Gulf, Dubai emerged in the late 1990s as a major port. So when the city began its ambitious economic growth campaign, becoming a global port operator made strategic sense. Now the company wants to expand into a new market, the United States, a massive importer of foreign-made goods.

Though the U.S. ports are causing the current ruckus, they are in fact only a small piece of P&O's business. But they are an important part of the deal, because they would give DP World a presence in a critical market where the company currently has no assets. "It's a strategic value. That's what's important," Chief Operating Officer Edward H. Bilkey said on CNN Wednesday night.

The explosive fight over port security, direct investment in the United States by Arab countries and the secretive process by which the federal government reviews foreign purchases of potentially strategic domestic assets caught the company and others in the industry off guard. DP World and P&O executives and maritime industry analysts had expected that the deal, first reported and discussed in October, would continue its smooth and anonymous path to completion on March 2.

"We did not expect this to happen. No one foresaw this in any way," said Michael Seymour, president of P&O's North American operations. "P&O and DP World thought we had gone through the regulatory process in considerable depth, both from an antitrust and a security perspective, and frankly, we thought we were there."


Ehrlich Leans Toward Accepting Port Deal (Matthew Mosk, February 24, 2006, Washington Post)
Maryland Gov. Robert L. Ehrlich Jr. said yesterday it is looking increasingly unlikely that he will try to block a United Arab Emirates company from taking over port operations in Baltimore.

Ehrlich (R) said he is continuing a crash review of the security concerns raised by the proposed purchase by Dubai Ports World of the British company that currently oversees the movement of cargo containers at the busy mid-Atlantic port.

But when asked yesterday if he now agrees with President Bush and supports the sale, Ehrlich said, "Clearly, the facts are moving in that direction."

Posted by Orrin Judd at February 23, 2006 11:49 PM
Comments

The fact that any one was "surprised" is an obvious example of how badly this entire episode was mismanaged.

If it is actually true that Bush "just learned of the controversy" when it hit the news, some one is clearly incompetent, and needs to be fired.

I believe they tried to "slip this by" which is evidence of an incomptence on a different order of magnitude.

I reiterate my earlier challenge. The person who picks Rove (or Rove picks) loses. Some one is asleep at the switch.

Bush's first "big veto threat" (as he back pedals) really did him well, huh?

Posted by: Bruno at February 24, 2006 12:17 AM

If it is actually true that Bush "just learned of the controversy" when it hit the news, some one is clearly incompetent, and needs to be fired.

Why (and how) exactly should Bush know about every manufactured controversy before it's manufactured?

Posted by: Timothy at February 24, 2006 12:22 AM

Tim,

If you believe this is "manufactured," you are missing the point entirely, and are therefore disqualified from offering a critique.

This was far more "spontaneous" than "manufactured." This shouldn't even be debatable among supporters of an Administration that rises and falls on the 'security' issue.

The sychophant wing seems to think that Bush's poop can't stink, and that's just plain moronic.

I'm perfectly able to argue (for numerous reasons) that the Administration is on solid ground on the "substantive" issues here.

The fact that it dropped out of the sky, that the initial repsonse was hopelessly stupid (I'll veto it), that they floated the "Bush just heard about it," drivel, and that they are now backtracking (we'll delay so that we can 'brief Congress') is evidence of an Adminstration on autopilot (if not gross incompetence).

Brown and Chertoff were/are morons. DHS is a layer of crap on top of more crap. Snow is a hack.

The sad fact is that this deal probably had some real security benefits to it tucked into the back end, and that some Bozo thought this would slip by in a day of talk radio and blogs.

___

This is Miers all over again. If OJ is right in his persistant claim that Miers was the better choice, it is the Adminstration (NOT Ingraham and Bennett, talk radio) who is to blame for her failure to get on the court.

3 days ago, we Judd fans were told that this was nothing, that this deal would go through, and that 'no one cares' about this issue.

We were given similar advice on Miers.

Now, the deal is 'on hold' until Bush sees if he can persuade Congress.
__

Absent Hurricanes and Terrorist attacks, competent Administrations "manufacture" the response to any controversy long before they happen.

This is a big screw up.

Posted by: Bruno at February 24, 2006 1:05 AM

Forgive me if I speak from ignorance, but I have been in meetings and on the beach for 4+ days.

Anytime you are outflanked by Clinton/Schumer, something is wrong. Especially on your foundation. Sure, the shrill voices will ululate (like Peggy), but there are supposed to be people in the White House with solid radar well ahead of the bow. Not this time. Miers was one thing, but this is another, and the veto threat was just silly. A GOP congresscritter from Ohio or Illinois or California doesn't give a rip about crossing Bush on this issue.

Posted by: jim hamlen at February 24, 2006 2:09 AM

Bruno - Nice to see you have been given the authority to disqualify people's comments on this thread.

This deal did not drop out of the sky. It was reported on in the financial press and was actually being discussed before the Cheney incident. It was reviewed by over 6 cabinets. It was only a surprise because no one in the MSM and politics paid any attention until the Dems used it go after Bush and the GOP got caught up in the MSM tsunami.

As the Ehrich post above shows people are starting to calm down and get behind the deal. McCain, Lieberman, prominent business leaders and so forth are supporting the deal. Congress will probably review the deal, allow its members to get TV time and recommend some enhancements, and the deal will go through.

As for the Bush admin I agree the response could have been better. They make a mistake a lot of people do - that if an idea/project makes sense it should be apparent and that people won't object to it. But that's not how politics works, especially with Dems automatically against anything Bush does and in an election year.

Posted by: AWW at February 24, 2006 7:23 AM

The surprise came because no one who knows anyhing about security thinks it's implicated here. They certainly should have anticipated the racism though.

Posted by: oj at February 24, 2006 8:31 AM

Bruno:

Tim is absolutely right--it's just anti-Arab hysteria.

The deal is done and there's nothing the wahoos can do about it.

Posted by: oj at February 24, 2006 8:35 AM

Tim & AWW,

Please forgive the rhetorical overreach.

OJ,

You are probably right re: hysteria, though I think it is closer to Anti-Islamic hysteria. I doubt a Malaysian or Indonesian company would sit well either (though they usually aren't 100% owned by the government).

Regardless, I'm skeptical of the "there's no one here but us plain old reasonable people. Nope, no problem here." theories.

This wouldn't have blown up on them if they weren't sleepwalking (or worse yet, tried to slip it by).

Regardless of the merits of the deal, the reaction is completely reasonable among an electorate told that it was "at war" for the last 4.5 years. Those "wahoos" are the only reason Bush is president.

Posted by: Bruno at February 24, 2006 9:19 AM

Bruno:

In popular opinion all Muslims are Arabs and vice versa.

It blew by because the objection is so insipid that no well-informed person would have thought of it. The ignorant are always difficult to anticipate.

Posted by: oj at February 24, 2006 9:25 AM

Bruno: Just curious. How would you have done it if you were in the White House? What was the competent way?

Posted by: Bob at February 24, 2006 9:34 AM

Bruno, when did you say you dropped off the turnip truck again?

Posted by: erp at February 24, 2006 9:38 AM

"Regardless of the merits of the deal, the reaction is completely reasonable among an electorate told that it was at war for the last 4.5 years. Those 'wahoos' are the only reason Bush is president"

Regardless of the merits of the deal - so the deal could be completely reasonable but it is not ok because media pundits and others, who don't understand the deal, are criticizing it?

Bush has been saying since 9-11 that we are at war with the radical elements of Islam not the entire Arab world. The critics of this deal aren't making that distinction which is ironic since they are the first to scream whenever the MSM labels alls all Christians or some other group with broad characterizations. Not to mention how Dems and the MSM virulently oppose profiling by Cops/businesses/colleges/etc. but reject this deal because it involves Middle Easteners.

As with Miers the screaming is not coming from the electorate but from the media pundits and blogs.

As for Bush not getting elected because of these wahoos - these wahoos are probably the ones dissapointed that Bush hasn't turned the Middle East into glass yet and probably didn't vote for him.

Posted by: AWW at February 24, 2006 9:55 AM

erp,

I stand skewered by your rapier wit. Really! I'm in awe.

Bob,

Good question. It's sticky. a couple of thoughts occur. First, open the "secret" committee meetings up a bit and allow for public comment. Second, provide various members/committees with information, but get them to sign off in advance.

Imagine Schumer, Clinton, Coburn, etc, pre-briefed. It allows for a much better case of arguing that back lash is "manufactured."

Probably most importantly, don't huff and puff with hollow veto threats when all of the "insipid" "turnips" that elected you start wondering what you are up to.
__

For all I know, some/many of the above items were actually done. If that's the case, it is even more evidence of how badly it was handled.

This may turn out to be another opportunity for the Administration to turn lemons in to lemonade, but it doesn't look that way now.

Posted by: Bruno at February 24, 2006 9:58 AM

So, the way to stop the president's partisan political opponents from twisting a non-event into a xenophobic circus is to give them a heads-up?

"Hillary, this is Karl. I just wanted to let you know that we're about to announce an easy, routine decision that you might be able to pervert for partisan political purposes. The messenger just left to bring the details over to your office. Be well, best to Bill."

Posted by: David Cohen at February 24, 2006 10:07 AM

A foreign power in charge of the day to day operations in six of our ports under the best of circumstances isn't what I'd call good national policy. But Bush was caught off guard and now is using our throats to show the Arabs how trusting he/we are. It should never have come to this. We were set up. This stinks to high heaven.

Posted by: NC3 at February 24, 2006 10:45 AM

"the facts are moving in that direction."

No, Governor; the facts are standing still, it's you reversing an unsupportable position.

Posted by: Mike Earl at February 24, 2006 10:49 AM

Bruno: Thanks for confirming you have no idea. I thought so from your blustering but now I know. I'm sorry but you're acting just like a talk radio host stereotype. All snarl but no clue.

Posted by: Bob at February 24, 2006 10:52 AM

OJ -- I think you meant 'prejudice' not 'racism'..

related, but different, concepts.

Posted by: JonofAtlanta at February 24, 2006 11:22 AM

NC3:

So you opposed the privatization of port operations to begin with? After all, a foreign power will run them if the sale is stopped.

Posted by: oj at February 24, 2006 11:51 AM

Jon:

No, all prejudice is racial. I'm down with the Darwinists on that one.

Posted by: oj at February 24, 2006 11:54 AM

You know, Bruno, for a man who has bad poll ratings, can't communicate well with the media, and uses hollow veto threats (as opposed to real vetoes), that Dubya is quite the powerful president.

BTW, most members of the Senate, on good days, are a known security risk. Let alone Schumer/Clinton/Coburn on this sort of sensitive info.

More BTW, my prediction looks better every hour, OJ:P

Posted by: Brad S at February 24, 2006 11:55 AM

NC3,

Strange that we haven't heard from you about Hong-Kong-based Hutchinson Whampoa having a large number of terminals at the Port of Long Beach.

Posted by: Brad S at February 24, 2006 11:58 AM

It would be foolish not to examine this deal carefully. Our situation has a disturbing precedent.

The speechwriter who supplied the quote in W's SOTU speech that America is addicted to oil showed not only a sense of economics but also of history. Back in the nineteenth-century day Britain wanted tea, which grew in China. China, under the decadent Ching Dynasty, demanded payment in gold from the Sea Barbarians. A worrisome trade deficit blossomed.

Then the Brits discovered that opium was an item China wanted but did not produce itself. So Britain bought opium in India, sold it to China, and recovered its gold so it could buy more tea (it also smuggled out some tea plants).

Along the way Britain acquired the barren rock of Hong Kong, giving rise to a flourishing trade and such merchants/port operators as Jardine Matheson and Hutchison Whampoa. During this period, foreign influences contributed to unrest with the religiously driven Tai-Ping Rebellion to name one and, with the final dissolution of the Ching, led to the basket case China became in the early Twentieth Century.

Jardines left its old businesses back in the 90's, opting instead to operate convenience store chains in Singapore and such out of home offices in Bermuda. Hutchison is very much alive, having become China's leading shipping and maritime freight management company. It is a port operator
all along the West Coast.

What goes around comes around. The Chicoms have replaced the Brits and decadent America has taken on the China role. We're hooked on cheap clothing, laptops, and anything else it decides to manufacture. They're barbarians, but we want the stuff.

Now the UAE is getting into the game. P&O is pulling a Jardines and selling its interests to Dubai who wants to expand its shipping role, doing port management business. And here in the decadent latter-day Celestial Kingdom we rail about those Islamic devils who supply the oil we must have to run our pcs 24/7 and fuel our SUVs and who want us to submit to Allah or die.

The calculus of international trade is risky under any circumstances. When a state is so dependent upon one part of the world for an essential commodity the risk becomes even greater. One can only hope our Mandarins manage this better than the Ching did.

There is a bright side to all of this. One can now pick up James Clavell's Asia Trilogy and read it with new enjoyment. "Tai-Pan" is a cracking good read, especially when one undertands that They are doing to Us what we used to do the Them.
Grim times call for grim humor.

Posted by: Ed Bush at February 24, 2006 12:23 PM

Ed: Wouldn't China have been better off if they had put the Imperial Family out of their misery and invited the British to take over?

Posted by: David Cohen at February 24, 2006 12:29 PM

David,

As Tom Pynchon noted, combinatorial analysis is always great fun. China might well have well been better off under British rule. But the Brits didn't do that. Instead Sun-Yat Sen, the Kuomintang, and Mao did in the Ching. In so doing they kept the transformation of China in the family, so the speak. Now the Celestial Kingdom is a Worker's Paradise.


Posted by: Ed Bush at February 24, 2006 1:06 PM

Bob,

Your stating that some one who disagrees with you "has no idea" isn't particularly persuasive. The mutual back-patting society here isn't making much of a case either.

In point of fact, I was origanally skeptical of this deal, read quite a few of the articles on it (posted here and elsewhere), and now view it as something that should pass.

My only remaining bone of contention is that the Adminstration handled this badly. With the deal "delayed" 45 days, Rove on TV pretending that everything is hunky-dory, and Democrats acting as if they can get traction on this issue (20 demonstrations at 20 ports), I tend to think that it's the "hunky-dory" crowd that looks clueless.

But what do I know, I'm a "turnip" "who's all snarl & no clue?" Regardless, last I checked, I answered your question (wrongly in your and David's opinion), addressed OJ's points, and changed my original view on the deal, and apologized for my rhetorical overreach re: Tim.

We can all wait and see how all this plays out.

Brad,

Actually, I've made the same point on my snarling and blustery radio show, and continue to support the administration on just about every issue. I was unaware that having the opinion that his admistration was capable of mishandling a situation was grounds for excommunication from the cult.

Posted by: Bruno at February 24, 2006 1:23 PM

Bruno:

Then perhaps you oughtn't try Jim Jonesing people:

Tim,

If you believe this is "manufactured," you are missing the point entirely, and are therefore disqualified from offering a critique.

Posted by: oj at February 24, 2006 1:32 PM

Asked and answered, counselor...

Tim & AWW,

Please forgive the rhetorical overreach.

Posted by: Bruno at February 24, 2006 1:46 PM
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