For the multi-millionaire executives that manage large financial institutions – who bet heavily on repackaging more and more suspect real estate mortgages with the expectation that they had “outsourced” any risk of default – the goal is to climb out of the hole while doing three things: Not admit there’s a hole, not admit it’s as big as Manhattan, and not admit that they’re at the bottom of it. Rather like George Bush.

Billions of shareholders’ equity is at stake. But a more powerful motivation, I suspect, is that top executive jobs and seats on exclusive boards of directors, and hundreds of millions or billions in compensation are at stake. And possibly a few jail sentences or banishment from their trade.

Consequently, anybody with the money, the willingness to put it into US Dollars, and to invest it with companies whose managers have recklessly subjected their businesses to enormous risk is welcome. There are few takers. Mostly private mega-wealth individuals in the Middle East and Asia and a few state investment trusts, such as those in China.

Given a choice between the admission of business failure and loss of tens of billions worth of shareholders’ assets, and selling a large (or quietly controlling) stake to an unknown foreigner with ready cash who asks few questions (now, at least), what choice would an enterprising CEO or board member make, I wonder.

To some degree, this is no different than Japanese companies buying us up in the 1990s and then Chinese and now Middle Eastern.

Perhaps not.

For America’s middle class, 2008 is not 1990. “Japan, Inc.” then wanted access to the world’s biggest economy and property market. It built industrial operations in carefully selected Congressional districts. It bought prominent real estate holdings (Pebble Beach, Rockefeller Center) and made quiet inroads into financial and entertainment industries. It obtained essential market intelligence for use domestically and in competition with us abroad, including the economic defense of the home Japanese market. (Sometimes too easily: one agency set up “to assist” US-Japanese business relations summed up the ease of its task with the motto, Deus ex Machina.)

In 1990, an industrial depression was about to unfold that took mega-companies like Chrysler to the brink of bankruptcy, but from which many companies, including Chrysler, and most Americans emerged relatively unscathed (pensions, healthcare and jobs intact). Legislatures still considered funding state colleges a public duty and electoral winner. “Outsourcing” was rare; it was a sign that the company needed last rites. “Private equity” was regarded as nearly illicit bottom-feeding, beyond the corporate pale. The idea of privatizing swathes of government or of “selling” the Indiana turnpike to foreign investors would have been met with the same uncomprehending stares that greeted the idea of “selling” Manhattan for a few beads. Just like the stares that would have greeted the idea that a draft dodging business failure and drunken playboy could be elected president.

In 2008, outsourcing is rampant and often badly done: its true costs discounted, its risks unassessed, the ability to undo it without paying a pirate’s ransom unnegotiated. It is a civil war that companies wage among themselves, but mostly with their workers. Secure employment, pensions, paid healthcare and affordable higher education are following the passenger pigeon into extinction. (Except as needed by those “hard to find”, “desperately talented” managers at the top). “Private equity” is the darling of Wall Street, the source of largesse for university endowments, charities, restaurants and property redevelopers. But it remains the merciless gutter of industries, employment and local communities. The dollar is at an all-time low, oil an all-time high. And that dry-drunk playboy is likely to be ranked as the worst president in American history.

All of which is to suggest that the consequences from selling off key chunks of the US economy will be different this time. That the place of the dollar, of American managers and workers and their businesses is less secure. That the resources available to average Americans to deal with these changes are more meager and declining. And that the government we pay to help predict and respond to such challenges dismisses that public duty. Dismisses it as derisively as it did its obligation to plan the aftermath of invading a third-rate military power, sitting on the world’s second-largest oil supply, in the middle of the most unstable geography on the planet.

This more limited knowledge and resource bank available to Middle America might be compared to fighting World War Two with sabers and horses. Not much good against a Blitzkrieg of tanks and aircraft. One thing, at least, is better. We have blogs – and the talent behind them and the people who read them, take heart and organize their efforts.

Manufacturing? Those jobs were sent overseas by greedy CEOs.
Raw materials? You can get those cheaper elsewhere.
Warm bodies? Not when most developed and even many developing nations do a better job of educating and training their people (hint: free college helps).

We don’t have much of anything right now besides massive amounts of debt.