"The capitalists will sell us the rope to hang them with." - Lenin
Bloomberg reports that Morgan Stanley, America's second largest securities firm, may sell as much as 49 percent of its holdings to China. China already holds a 9.9 percent stake in Morgan Stanley, which it purchased in December after the firm reported a quarterly loss. Obviously, Morgan Stanley's in trouble again. It's shares fell 42 percent this week as Lehman Brothers filed for bankruptcy and Merrill Lynch allowed itself to be acquired by Bank of America. But this would be a complete and utter disaster; perhaps not for Morgan Stanley, but certainly for America.
China is already leveraging its position as one of America's biggest bankers to defend an untenable status quo in U.S.-China trade; one that has seen the devastation of U.S. manufacturing and that continues to permit China to levy 12 percent higher average tariffs on U.S. goods than the U.S. imposes on Chinese goods, inflate its competitive posture in U.S. markets through blatant currency manipulation, and extract annually from the U.S. a trade surplus of $233 billion (and rising).
(Crossposted from Our Republic)
And if America has any hope of reacquiring the leverage necessary to pressure China to exert its influence in Darfur, cease hostilities towards Tibet and Taiwan, and respect the human rights and civil liberties of its citizens, our government better think hard and fast before they allow the Chinese government to purchase half of Morgan Stanley.
China owns far too much of America already. It would be sheer folly to put them on the path to a controlling interest.