An introduction to the revolutionary new, quick-to-grasp 100 page book
This book focuses on the lethal dangers created particularly by America’s protectionist politicians – although similar games are played particularly throughout Europe and in Japan. But this slim volume focuses on America because she is the economic gorilla on the block, and faces elections. Besides, I spent many formative years there, and particularly enjoyed dealing with many of Capitol Hill’s leading trade politicians during my years as Chief Regional Economist for major London brokerages with Asian operations.
Protectionist politicians increasingly threaten the profitability of their very own, American MNCs and thus
- the 23 million jobs they create in America,
- the $341 billion worth of investments that they have ploughed in to America, and
- The 25% of American Gross Domestic Product that they generate.
How do these politicians threaten the profitability of one of their key constituents and thus financial backers, America’s MNCs?
Increasingly, parent MNCs see that the futures “money fountains” for them are their overseas operations in emerging markets. But, once they have established such foreign affiliates, their operations are “sitting ducks” that can be helped or hindered by the host country in which they are operating. For one thing, their legal “systems” offer little recourse. Besides, the politician-bosses of these emerging markets have their own agendas. So, if America’s protectionist politicians irk these politician-bosses too much, they will retaliate, in turn, by taking-out their anger on the foreign affiliate. A simple example: American politicians want China to revalue the RMB. So local/national party bosses single-out the American MNCs operating in China and make their lives more difficult. The only “winners” are the local politician-bosses, and, of course, the local operations of other countries’ MNCs whose politicians have not irked the local powers: these MNCs now at little cost get to fill the vacuum created by the demise of the American MNC’s operation.
This, in turn, reduces the global profits of the parent MNC, thus angering all if its employees, financiers and shareholders.
