The Iraq war has probably killed the idea of using U.S. troops to intervene in the name of Mr. Bush's "world democratic revolution."
The Middle American revolt that killed amnesty for the 12 million illegal aliens has buried the idea of open-borders immigration.
Come now the SWFs, which may bring an end to America's folly in her unthinking embrace of global free trade.
What are SWFs? They are Sovereign Wealth Funds -- huge capital funds controlled by regimes that are the big new boys on the block in the world of global finance.
How are SWFs created? Primarily from the mammoth trade deficits America has run up. In 2006, America had a merchandise trade deficit of $836 billion and a current account deficit of $857 billion, or 6.5 percent of our entire Gross Domestic Product.
Foreign nations have piled up huge cash reserves. China, at the end of March, had $1.2 trillion; Japan nearly $900 billion; Russia, with oil and gas revenue pouring in, something like $300 billion. The Arab Gulf states also have huge hoards of dollar reserves.
Rather than keep all this cash in U.S. Treasury bonds earning 5 percent a year, these nations are creating SWFs to go after higher rates of return and corporate assets to advance strategic interests.
The United Arab Emirates has $500 billion in SWFs; Norway $400 billion; Singapore and Saudi Arabia $200 billion; and China nearly $200 billion. Total SWF funds worldwide is $2.5 trillion, writes ex-Treasury Secretary Larry Summers, a figure that is expected to double to $5 trillion by 2010, and then double again to $12 trillion by 2015.
The problems these SWFs portend are enormous.
Since the Reagan-Thatcher era, privatization of publicly owned assets has been the trend in the free world. Airlines, railroads, mines, utilities, and telephone and telegraph companies have all been sold off by governments to private investors, who, to make them profitable, have made them efficient.
The SWFs reverse that trend. For these funds are all owned by or answerable to regimes, whose agents can direct these vast funds into assets not to produce maximum income, but maximum strategic benefit to the regime.
Suppose China, with its $1.2 trillion in reserves steadily rising from its soaring trade surpluses, begins to invest, through its SWF, in Boeing, Microsoft, IBM, GE and U.S. companies that build our strategic submarines, stealth bombers, satellites and missiles. Will the United States rope off the industries that build the weapons of our national defense from any ownership by SWFs?
If foreign investors can buy stock in these companies, why not foreign countries through SWFs?