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The Real Deal on the Ports Deal - by Larry Kudlow

Yesterday’s New York Sun ran a story examining the continuing rift between conservative pundits on the Dubai ports deal. The paper ran a big spread on some of the leading conservative voices whose conflicting positions on the deal run the gamut. Yours truly was featured in support of the deal, along with the always insightful and knowledgeable commentators Charles Krauthammer and David Brooks, as well as former Congressman Jack Kemp who remains a sharp-as-a-tack pro-growth, free-market supply-sider. I count myself in good company.

After the hurricane of controversy these past couple weeks—all the editorializing, the talk show tempests and political sound bites—I still have yet to see any real evidence that the Dubai ports deal compromises U.S. national security. I just don’t see it. Objections raised by the Coast Guard have been solved, and the fact stubbornly remains that along with the U.S. Customs and Homeland Security, it is the Coast Guard, not Dubai Ports World, that will ultimately run the show when it comes to protecting port terminal operations.

If someone were able to show me a clear, insurmountable security problem, then I will gladly change my mind and hop aboard the anti-ports deal train. But so far, nothing has materialized. (And let me add that building in additional safeguards where there may be questionable practices is an eminently doable proposition.)

A word or two for the conspiracy-theorist crowd projecting nefarious, clandestine motives upon the UAE—the folks who subscribe to some misguided notion that the UAE is in cahoots with terrorists—let me encourage them to reconsider such position. The Dubai ports deal is costing these guys around $7 billion dollars. If they truly had some sick, ulterior motive to harm innocent Americans, don’t you think they could accomplish these imagined goals with far less money? The point here is that the UAE and Dubai Ports World has a huge vested economic interest in this deal.

One of the leading critics of the ports deal is my old friend Bill Bennett. He wants President Bush to “kill the deal.” Writing on National Review’s website, Mr. Bennett recently wrote, "To defend this deal is to defend a $7 billion arrangement with a country that has never had a democratic party in its entire existence…What kind of a signal are we sending by making a public ally of a country that refuses democracy and does not recognize the existence of its most democratic neighbor because it is considered to be inhabited by members of the wrong religion?"

Well, with all due respect to Mr. Bennett, if the primary determinant of whether or not America does business with foreign nations rests upon their singular commitment to democracy, then Uncle Sam would have to draw the curtains and turn out the lights on a huge number of existing relationships with non-Democratic nations. For starters, where may I ask would our bustling American economy gather the necessary fuel to fire its economic engine? After all, roughly forty percent of our nation’s oil supply is derived from OPEC countries, a group which includes countries like Saudi Arabia and Venezuela, where the torch of democracy is anything but burning bright at this point in history.

And as far as doing business with pure democracies, then I suppose Mr. Bennett and others would have us terminate all economic activity with communist China? Discontinue all further trade? Of course, I would argue that increased economic connectivity, supported by the free flow of trade investment and labor, makes for better political relations between the U.S. and other countries. Better yet, it also tends to open up and liberalize authoritarian political regimes in the direction of democratization.

When you scratch this debate among conservatives deep enough, what you are left with is a pretty clear demarcation between free-traders and protectionists. That’s really the cutting edge litmus test that divides the conservatives on this debate.

In my opinion, those conservatives who oppose the Dubai ports deal are lining up with the xenophobic protectionism of Pat Buchanan. The pessimistic Buchananites want to put a huge wall around America. They are isolationists. They have no global model of economic growth. On the other hand, conservatives in favor of the ports deal align themselves with the pro-growth, free-trade liberalizing tradition embodied by Jack Kemp. The Kemp adherents believe in breaking down global barriers in order to enhance prospects for prosperity and democratization everywhere. That’s what this thing is all about.

It’s the same dividing line litmus test on immigration. The Pat Buchanans, the Michelle Malkins and the Michael Savages of the world are all anti–immigration. Michelle Malkin recently wrote, “I must express bottomless disgust with those on the Right who have turned into mush-mouthed race card players to shift blame away from President Bush for his miserable mishandling of the situation.” Miss Malkin misses the mark. There is a race card here. Absolutely. Whether it’s anti-Arab xenophobia or anti-Mexican xenophobia, the fear-mongers in the conservative ranks are up to their old tricks. They do not really believe in economic opportunity. Nor do they believe in the Ronald Reagan “City on a Hill” vision of America to lead and transform the rest of the world toward the spirit and reality of free-market prosperity, political democratization and true equality of humankind.

At the end of the day, it’s really a question of competing visions. The Buchanan vision is one of pessimism, defeatism and fear. The Reagan-Bush vision brims with optimism, victory and success.

Yes, there is a rift in the conservative ranks; one that will hopefully mend itself sooner rather than later. But can there be any serious question that the resounding conservative Republican ascendancy and success of the past twenty-five years launched by Reagan and advanced by George W. Bush is built on optimism? I think not.

- Larry Kudlow, Host of CNBC's Kudlow & Co.