The New Ugly Americans

[Geee]

American Spectator:

One of the saddest and most tragic things in history is to witness a nation trying to exercise its power long after the economic origins of that power have gone into decline. Think of Austria languishing as the rest of Europe industrialized or France trying to defend itself against Germany in 1940 or even Russia trying to play the Cold War combatant even as Communism rotted it from within.

Today we are undergoing a similar dance in our economic relation with China. And wouldn't you know, it's our liberal friends in Congress, so enthusiastic about hamstringing American enterprise, who are the last to realize that they are undercutting our political hegemony as well.

I am speaking, of course, of Senator Charles Schumer of New York and Representative Edward Markey of Massachusetts, both of whom have decided we are in a position to tell a Chinese company that it cannot acquire a Canadian company because… well, because we're Americans and the world has to pay attention to what we say.

Here's the setup. Last week the Chinese National Offshore Oil Company (CNOOC) offered $15 billion to buy Nexen, a Canadian drilling company with large holdings in the Athabasca Tar Sands of Alberta, which is rapidly becoming Canada's pot of gold in energy development. Now it so happens that only six months ago the Canadians were planning to ship nearly all of this newly developed oil to Texas via the Keystone Pipeline. Environmentalists, however, swore the pipeline would be built over their dead bodies and President Obama, not wanting to be left with no natural constituencies except single mothers and minorities, decided to appease environmentalists and block the pipeline.

The Canadians were shocked. They had long planned to sell this oil south of the border. Canada is already our largest supplier of foreign oil and it was inconceivable that we wouldn't want to take more it instead of relying on Iraq, Nigeria, Venezuela, and other unpredictable sources. All this brought the sudden realization that Canada is dependent on us for 97 percent of their oil exports. Prime Minister Steven Harper quickly decided it was time to diversify. He took a well-publicized trip to China and the Nexen purchase was one of the first results.

Like any other voluntary exchange, the deal will bring benefits to both sides. Canada is actually running short of capital in developing its tax sands resources and China's investment will help. At the same time, China wants access to both oil resources -- something they are pursuing around the world -- and Western knowledge and technology. Nexen has some very sophisticated expertise in offshore drilling

In passing, it might be worth noting that the Canadians are becoming very prosperous at this. They are developing resources in a way that we aren't. They've also gotten control of their government. They recently passed the U.S. in average income and are starting to purchase US resources. A recent analysis of the Phoenix housing market found it was beginning to come back because of an influx of Canadians buying second homes.