Happy Now?

Friday, March 10, 2006

THEY SPEND drunkenly, they fail at oversight and they can't stop the administration from abusing detainees or tapping phones. But never call the members of Congress powerless: Yesterday, in the exalted name of anti-terrorism, the Senate rebelled against its Republican leadership and joined the House in a vote to prevent a company based in a moderate, friendly Arab country from making a minor investment in the United States. When it became clear that some such blocking measure would pass, Dubai Ports World threw in the towel, announcing that it would sell all of its U.S. operations, including the management operations of six U.S. ports it recently acquired, and do business elsewhere.

Of course, the speed of that announcement illustrates a critical point: that this investment always was a business decision, not the early stages of a covert attack on Baltimore. Quite rightly, the company and its Dubai-based owners -- who are stunned, apparently, by the unexpected reaction to what they thought was a routine business deal -- didn't want their country's and their company's names dragged through the mud, so they cut their losses. Besides, it seems that the European port operations that Dubai Ports World acquired when it bought Peninsular & Oriental Steam Navigation Co., the British company that has run the six U.S. ports, are more profitable anyway. The result: Dubai Ports World will now run only ports where cargo is packed and sent to the United States, instead of managing ports where that same cargo is unloaded.

But our brave new Congress has achieved more than the irrational spiking of one business deal. It has also sent a clear message to the Arab world: No matter how far you move along the path of modernization and cooperation, Americans may be unable to distinguish you from al-Qaeda. Dubai welcomes hundreds of ship visits every year from the U.S. Navy and allied ships. It has worked with U.S. agents to stop terrorist financing and nuclear cooperation. But none of that mattered to the craven members of Congress -- neither to the Democrats who first sensed a delicious political opportunity nor to the Republicans who then fled in unseemly panic. As to long-term damage to the United States' security, economy and alliances? Not of concern to the great deliberative body.

No one should underestimate the potential damage. Any government in a Muslim-majority country will have to ask itself: Why take the risk of friendship? If governments find no good answer to that question, the fight against radical Islamic terrorism will suffer. Meanwhile, Arab investors may think twice before putting their money in a country where their companies risk expropriation. With the price of oil so high, Arabs are rapidly becoming a major supplier of foreign capital. This isn't a good moment for Americans to discourage foreign investment, given the nation's dependence on foreign capital (see: Congress, drunken spending by). Nor will the message -- that foreign ownership was unobjectionable when it was British but intolerable when it was Arab -- do much to advance U.S. efforts to promote equitable investment rules for its own companies abroad.

Over the next few days, many excuses for this fiasco will be offered, by those who should have known better, by those who know better already and by those who may awake to the embarrassment of their mass hysteria. Some will blame the president, because he politicized the discussion of terrorism or was highhanded in threatening to veto a bill banning the sale. But if Congress can't do the right thing in the face of such provocations, it is lamer than the excuses themselves.

Some, meanwhile, will blame the public, because opinion polls showed overwhelming objections to this deal. But it was Congress that brought this matter to public attention; here we think, for example, of the cynical actions of two Democratic senators from New York: Hillary Rodham Clinton and Charles E. Schumer, who heads his party's effort to win back control of the Senate in this year's elections. Congress falsely portrayed the deal as the "purchase" of U.S. ports. Congress failed to tell the public that port security is run by the U.S. Coast Guard, not the men who pay the salaries of the (overwhelmingly American) longshoremen. Congress created this storm, in other words, and then toppled in its wind.


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