Japanese Buying U.S. Businesses

In response to “Sold Off by a Greedy Few, to Our Vast Harm,” by Richard Goodwin, Op-Ed Page, Sept. 29:

Goodwin’s only valid points are that American management is greedy and shortsighted. This has been the case since the end of World War II, made possible by the survival of the U.S. as the only major industrial power, with no competition in basic industries such as steel, automobiles, construction, etc. Without foreign competition, short-term profits and share-prices increasingly became the indexes of mangement performance. Since it could be passed to consumers, management allowed excessive increases in labor prices, and spent less and less on product and productivity development. This Wall Street-driven trend has continued to the inevitable conclusion of major industry being operated for the benefit of its no-risk managers, rather than shareholders, employees or customers.

In parallel, the lunatic deficits of the Reagan Administration, which so far have been financed largely by foreign capital, have combined to create a climate highly conducive to foreign acquisition of American assets. This, bewails Goodwin, is “ . . . Permitting the foundation of our prosperity to fall into the hands of those who care nothing about us.” He, therefore, proposes--in traditional “liberal” fashion, that we simply prohibit such acquisitions.

Wait a minute! Did we wreck Europe when our corporations were buying everything in sight in the 1960s? Of course not; like buyers of today, we had to abide by the their national laws, and we ultimately injected considerable capital into those countries--to their ultimate benefit. Who cares whose name is on the share certificates? What counts to our economy in the long run will be which shareholders are willing to ignore the Wall Street game and to invest for the future. So far, the Japanese are doing better than our new “LBO managers,” who have stolen companies by the use of debt burdens which completely prohibit any long-term commitments to product or productivity.

His “government knows best” approach is typical of those who have faith neither in free enterprise, nor in the American people to handle change as the world changes. Over two centuries, the American voters have consistently made sensible decisions, and the basics of free enterprise have worked. They will continue to work with this most recent intervention of foreign capital.

Relax, Mr. Goodwin. America can handle it.

CARL G. HOKANSON

Encino