EECS 1520 Lecture 32: EECS 1520 Lecture 32 Notes
21 Jun 2018
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EECS 1520 Lecture 32 Notes
Introduction
Foreign ownership
The U.S. government bailed out General Motors in 2009 by investing billions of dollars
to purchase a large amount of its stock.
Country Security Laws
Some U.S. politicians have argued that international trade and foreign ownership should
be restricted when U.S. security is threatened.
Despite the general support for this opinion, there is disagreement regarding which
specific U.S. business and transactions deserve protection from foreign competition.
Consider, for example, the following questions.
Should the United States purchase military planes only from a U.S. producer even when
Brazil could produce the same planes for half the price?
The trade-off is a larger budget deficit against increased security.
Is the United States truly safer with planes produced in the United States?
Are technology secrets safer when production occurs in the United States by a domestic
firm?
If military planes are manufactured only by a U.S. firm, should there be any restrictions
on foreign ownership of that firm?
Note that foreign investors own a portion of most large publicly traded companies in the
United States.
Should foreign ownership restrictions be imposed on investors based in some countries
but not on those based in other countries, or should owners based in any foreign
country be banned from business transactions that might threaten U.S. security?
Is the threat that the producing firm’s owners could sell technology secrets to enemies?
Is a firm with only U.S. owners immune to that threat?
If some foreign owners are acceptable, then which countries are considered to be
acceptable?
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