The Wall
Keep Your Rich Rivals Close
Kearsarge Global Advisors | August 12, 2008
In Newsweek, Yale professor Jeffrey E. Garten looks at sovereign wealth funds and determines that priority should be given to expanding capital and trade flows in the face of regulation.
Keep Your Rich Rivals Close
Creating international economic policy involves constant trade-off between economics and politics, and, in this case, the SWFs have a good deal of the leverage. Moreover, it is very difficult to control capital flows of any kind without the law of unintended consequences kicking in and creating even bigger problems than the original ones. All things considered, Washington and America would be generally better off working as closely as possible with SWFs rather than making them feel unwelcome. It's not a perfect policy, but it's the least damaging one.