Thursday, February 23, 2006

The Port Authority of NY & NJ & UAE

After some deliberation, I’ve decided to tentatively side with Bush (?!) on “Portgate”.1 For those that aren’t up to speed on the case, the issue is whether the U.S. government should approve the sale of a British-owned company to one based out of the United Arab Emirates (in fact, a company under de facto control of the UAE government). The brouhaha arose when it was discovered that the White House had given the go ahead to the transfer of ownership, and many members of Congress (both Democrats and Republicans) started hollering about national security. My gut reaction to this situation was originally “why does the government have any say in who owns a private port facility?”. But of course we don’t live in my libertarian fantasy world and like most airports and train stations, shipping ports are currently run as quasi-public facilities. Furthermore, seaports are likely the weakest link in terms of security of the imports (the widely touted figure is that less than 6% of all containers are inspected). Could terrorists use a shipping container passing through these ports as a Trojan horse to smuggle a nuclear weapon into the country? It is a valid concern, and one that does warrant government intervention. I think most of the blowing by Congress stems from (surprise!) political opportunism and Arab-phobia.

But do they have a case? The real question is whether the top level of ownership of the shipping facilities will have any effect whatsoever in the quality of security at these ports. And I think the answer is, not much. Security will still be overseen by the DHS and the Coast Guard no matter who’s running the show and besides, we’re doing a pretty piss-poor job now, and it’s likely going to stay that way in the future regardless of who owns the thing. Which in some ways, might actually make the case for putting it under foreign control stronger. This action might draw some much-needed attention to the situation and stimulate the government to devote more homeland security dollars towards ports. Furthermore, as posited here by Kn@ppster, a company based out of the UAE might actually have MORE incentive to do a good job with security, as the blowback from a mistake will be very different should anything happen: an American firm will be hit with government investigations and lawsuits, while an Arab government will be hit with asset seizures and in extreme cases, bombs (however, I think this analysis misses the screwy incentives behind people who are willing to be suicide bombers – I don’t think they’re overly concerned with the blowback). Throwing the UAE a bone in terms of showing that we aren’t completely allergic to them conducting business in America is likely to help, marginally, the opinion of the US on the Arab street. And if the UAE port company can operate more efficiently (as you would assume, as they are buying out the less efficient British firm), there may be economic benefits for US consumers and more money available for security. So I think there might be pragmatic (improved economic efficiency, potentially helping long-term security and helping our relations with the Arab world) and philosophical (economic freedom) reasons to allow the sale of the ports in question. Keep a close eye on them, though - which we really should be doing no matter who’s in charge.

1 incidentally, how long will it be until political (and figure skating) scandals are no longer ALL referred to as “----gate”? The influence of Watergate on the creativity of journalists and pundits is truly staggering. What may have been a clever and insightful comparison the first couple of times it was used, “something-gate” is probably well past its best-before date.


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