There They Go Again, Blaming Foreigners : MCA deal should cause soul-searching not hand-wringing

Yet another big studio is being sold to foreign interests, unleashing fears about the loss of our cultural identity. But Americans who are howling about the purchase of MCA Inc. by Matsushita Electric Industrial Co. would be wise to stop pointing fingers at those economically aggressive Japanese and take a look in the mirror. They’re not likely to like what they see.

For what America will see in the mirror is a society that has lived on the credit card for too long and let its savings dwindle to a pocketful of pennies. It will see a society that would rather curse the foreigners with all their money than take stock of why more and more American properties are being sold to the highest bidder, who more often than not lately is a foreign corporation. Look at yourself, America, and stop pointing fingers at others.

The occasion for this necessary self-examination is Matsushita’s record $6.59-billion purchase of MCA , whose Universal Pictures has brought us such movie gross-busters as “Jaws” and “E.T. The Extra-Terrestrial.” MCA’s Universal Studios is a must on any tourist’s visit to Southern California. MCA’s other holdings include record labels and a publishing house.

MCA also owns Yosemite Park & Curry Co., which runs all concessions at Yosemite National Park (but that subsidiary will be spun off before the Matsushita deal is completed).

Only a year ago Sony Corp., another giant Japanese electronics company, purchased Columbia Pictures. Now, four of the six big Hollywood studios are owned by foreigners. But the Matsushita deal has triggered rumblings about whether this company, which is less Americanized than Sony, will interfere with the content of books, records and movies. Funny, those questions did not immediately come up when Australians bought 20th Century Fox or when Italians purchased MGM/UA. The Matsushita-MCA deal must not make Japan a renewed target for bashing.

The real issue is one of competitiveness--and having an economic environment where U.S. companies can slug it out in the global economy. MCA, for example, set off in search of a buyer with deep pockets in order to secure capital for projects, new markets for products and access to the fast-changing technology of entertainment. It needed to become bigger to compete in what’s becoming a truly global entertainment industry. No U.S. buyer surfaced, but MGM’s new Italian owners may be waiting in the wings.

So rather than be concerned about foreign investment, Americans should instead focus on getting our economic house in order. The budget deficit requires high interest rates to finance the debt. The U.S. savings rate is dismal. The go-go 1980s was a decade of deal-making where too much money went into buying and breaking up companies for profit instead of building factories. Lawyers and deal-makers got rich while average Americans lost their jobs.

Now we are in jeopardy of having to follow a global economic agenda set by other countries. The Matsushita-MCA deal is a symptom of a deep problem. It should inspire us to fire up our cultural assets of enterprise, creativity, resourcefulness and hard work. That’s what made America great before; that’s what will make America great again.

WHO SAVES WHAT

Net household savings as a percentage of household income. USA: 5.6 JAPAN: 15.3 SWITZERLAND: 10.7 GERMANY: 12.2 ITALY: 14.1 Source: Organization for Economic Cooperation and Development