Rare Praise for Rudy Giuliani

I was listening to Rudy's Sunday interview with George Stephanopolous this morning. For the most party, Giuliani is about the scariest candidate out there to a libertarian, but for (perhaps) the presence of Romney in the race. In any event, Rudy was asked a question about foreign investment in US banks - and specifically investment by foreign governments. To Rudy's credit, he took the unpopular position and argued that this is, in fact, good for the US - any foreign investment in the US is good news. Stephanopolous tried to distinguish between investment by foreign governments and investment from Japan in the 1980s, which caused panic at the time but was ultimately good for our economy.

In any event, Rudy's argument in favor of the foreign investment amounted to an argument for diversification. As long as a large number of foreign governments are investing in the US, they wind up cancelling each other out, and no one foreign government gains much, if any, sway over US policy or the US economy.

Moreover, implicit in Rudy's reasoning is the argument that foreign investment in the US builds cooperation with foreign governments and makes an aggressive policy by those nations towards the US counterproductive to the foreign government's interests. In a way - and I highly doubt the exceedingly hawkish Giuliani would have meant this - foreign government investment in the US serves as a tremendous deterrent to war or foreign aggression against the US.

Indeed, there is substantial evidence that foreign investment and free trade are tremendous forces for international peace. Point being that Giuliani may have inadvertently advocated a policy that would actually reduce the US government's ability to engage in an interventionist foreign policy.

It is in essence a Madisonian argument - maximize the number of groups with an interest in the American system, and those groups will buy into that system and cooperate with each other.

Rudy is still close to the scariest choice of the Republicans, but you have to give credit where it is due.