Card: What’s wrong with foreign investment?
Stiglitz: Well, you know, when Merrill Lynch and Citibank had a problem at… earlier on in the crisis, they turned to foreign sources of funds including The Sovereign Wealth Funds, they had to, you know, with Americans saving zero, there is no liquid wealth in the United States, they turn… turned abroad. And that was a point where people started worrying about, you know, we have been telling people all over the world, open up your markets to our firms but when foreigners started coming to American markets, people got a little bit nervous about this. Now, the first observation is, I think, the Sovereign Wealth Funds had been [lost] enough in their investments in American financial markets that they’re going to be reluctant whatever we say to put more money in to the United States and, you know, you say, “Burn once, your problem. Burn twice, it’s my problem.” You know that they have to take better diligence and they know they can’t, you know, understand… trust what’s going on. Now, I can… I’ve talked to the heads of [IB] Sovereign Wealth Funds and quite honestly, they’re quite angry. For the United States to be talking about transparency when you see what’s going on in American’s financial markets, you see the way the government’s been bailing out with such a non-transparent way, they say, you know, “C’mon!” Talk about hypocrisy, let’s be real here. Now, as an economist, my perspective is the following: it’s obviously good to have more transparency but we aren’t putting, you know, hedge funds are not transparent. If we say that Sovereign Wealth Funds had to be more transparent and they’re not transparent enough, the Sovereign Wealth Funds can put their money on hedge funds, we don’t know who’re investing in hedge funds. So this is all a charade… this is all a charade to make people feel like we’re doing something. Now, what we need to think about is what are we worried about? What are worried about? If the Sovereign Wealth Fund comes in and invest in a company and loses money, well, you know, is that a problem? [There’s] a Japanese back in the ‘80s bought Rockefeller Center and lost a lot of money in the deal, was that a problem? There are some things that we need to worry about. If somebody buys… establishes a monopoly position, that’s a problem. If somebody buys, you know… one of the really weird things that we did is we privatized the US Enrichment Corporation which makes the critical ingredient in atomic bombs and [enriched uranium]. We should fill nervous about having somebody owning that facility. But the answer is, we need regulations to protect us so it’s not the lack of transparency by the Sovereign Wealth Fund, it’s the lack of adequate regulations in the United States to protect us from the things that we are worried about. If we’re worried about monopoly, let’s have [IB] laws and I think we need strong [IB] laws. If we’re worried about US Enrichment Corporation pursuing profit, maximizing objectives, we should never have privatized this ‘cause profit maximizing is not consistent with our national interest. The profit maximizing is selling it to the high… this enriched uranium to the highest bidder. I don’t think we want that. So that was a mistake to privatize that, we should make it, you know, not a profit maximizing entity. So these are the things that we ought to be thinking about, what it is that we’re worried and deal with the things about which we are worried.