Monday, October 29, 2012

The New Economic Nationalism

In the most scurrilous ad of a scurrilous campaign, President Obama’s allies at the Democratic super PAC Patriot Majority have released a new ad denouncing Mitt Romney as an “economic traitor” — their actual words — while the president identifies his own policies as the “new economic patriotism.” Of course it is not patriotism but nationalism, albeit nationalism of a funny sort — nationalism for people who do not regard the nation itself as anything particularly remarkable.
At issue is an automotive-sensor plant located in Illinois. The plant had been owned by Honeywell, which in 2011 sold its automotive-sensor operators to Sensata, a worldwide manufacturer that had never intended to keep the Illinois plant open and had made no secret of the fact. The Massachusetts-based Sensata manufactures all over the world, but 75 percent of its automotive business is in Asia, and so it is consolidating the related manufacturing there — hardly an unexpected decision, especially given that Illinois is one of our least competitive and most highly taxed states. Jesse Jackson of course was immediately on the scene, and Sensata employees and other protesters began attempting to occupy the plant, leading to two dozen arrests and causing the company to consider shuttering the facility ahead of schedule. Leave it to Jesse Jackson to conclude that if a particular location is economically uncompetitive, the natural solution is a mini-riot.
Sensata is itself a relatively new firm, having been created by Bain Capital out of the sensors division of the struggling industry giant Texas Instruments, which is offloading some of its non-core businesses in order to concentrate on its most profitable lines. (It is said to be in talks with Amazon to sell its wireless division, which supplies processors for the Kindle.) Which is to say, Sensata represents precisely the sort of good that private-equity firms do in the world: discovering value in troubled enterprises and liberating it from underperforming firms and mediocre managers.

Read more: http://www.nationalreview.com/articles/331866/new-economic-nationalism-editors

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