CSX, Lou Dobbs and American Jingoism

Last Updated Jun 11, 2008 12:59 PM EDT

train_and_track-ref21795.jpgI don't know about you, but I find CNN's Lou Dobbs viscerally repellent. His flag-waving bombast against hard-working immigrants raises my blood pressure. Now, he's showing his ignorance of American history in a bizarre proxy contest at railroad CSX.
Dobbs is joining a handful of senators in denouncing the investment in CSX of a British hedge fund called The Children's Investment Fund Management. The fund is run by a London-based Redcoat named Christopher Hohn who often gives his proceeds to global relief agencies including ones dedicated to the fight against AIDS.

The hedge fund wants a seat on the board of CSX which is enjoying a renaissance with strong performance and earnings, like several American railroads. At stake are five of 12 board seats.

Dobbs and his cabal claim that if the Brits get a seat on CSX's board, it will be a "new threat to national sovereignty and security." He made similar statements when a Dubai group tried to buy operational control of six U.S. ports. The plan was scuttled.

Let's see, what has CSX got to do with national security? Well, I guess you could say it hauls needed commodities such as coal and links many military facilities especially in the Southeast.

But wait! Check out history. Before 1914, foreign investors put tremendous amounts of capital in American railroads. From the mid-1870s to 1914, foreigners were clamoring for a piece of U.S. rail so vigorously that special markets were created in London, Amsterdam, Paris and Frankfurt just to handle American railroad securities. Overseas money flowed in, building lines that connected coasts. Foreign entities held significant shares of the New York Central, Pennsylvania and (big surprise) the Baltimore & Ohio, which is one of CSX's ancestor lines.

Of course, foreign investment was curtailed after World War I. But it is hard to say why foreign investment in a rail line such as CSX is so much more a national security issue than it was, say, in 1890 when there were no transportation alternatives such as trucks or airplanes.

So much for Mr. Dobbs' grasp of history. Strange how as the world economy gets more global, some opinion-makers in America get more jingoistic. What's your view?