On February 26, the Politico published an article entitled "Realtors urge lifting Freddie, Fannie caps" which contained a reference to our paper "Encouraging Foreign Investment by Limiting Political Influences."
Unfortunately, the article misrepresented our views regarding reform of the CFIUS process.
The aim of our paper was not to attack the changes in the CFIUS process resulting from the Foreign Investment and National Security Act of 2007 (FINSA). Indeed, FINSA has made the CFIUS process more transparent and therefore has made it easier (especially for small companies with limited resources) to know what kind of safeguards need to be in place in order to get FDI deals approved by CFIUS.
However, there is a danger that overzealous politicians will use the precedent set by FINSA to try to revise the CFIUS process whenever doing so allows them to score easy points with their constituents.
Americans’ fears about terrorist activities and an economic playing field that is unbalanced against American workers should not be manipulated to justify continuous review and revision of the process CFIUS uses to judge the level of danger posed by FDI deals. Doing so would lead to an insecure investment climate, scaring off foreign firms willing to put capital into the American economy – and scaring off foreign companies willing to put money into our economy is the last thing we ought to do in times of a credit crisis.