Last month, the SEC blocked the sale of the Chicago Stock Exchange to a group of Chinese investors. The SEC said the group had not met it's burden to show that Chinese government interference would not be a problem.
The deal was first announced in February 2016. Then-candidate Trump spoke out very strongly against the deal on the campaign trail, saying the Chinese were "taking our opportunities and our jobs".
This is relevant to the class because it shows how the markets deal with anti-trust legislation and prevent interference from not only domestic, but international governments.
https://www.politico.com/story/2018/02/16/china-chicago-stock-exchange-352343
3 comments:
This is a very interesting article because it relates to our discussions of government involvement in markets. In this case, the government is involving itself in an acquisition, by restricting the sale to a foreign group. This brings up the debate as to what and how much involvement the government can have. In my opinion, it is smart for the SEC to block this acquisition, because there could be a chance of Chinese government interference. At the same time, however, I don't want to live in a society where business owners can't freely sell their companies to foreign investors.
I find this is interesting because China is a socialist country where the government interfere the market a lot and the US is a capitalist country where the government doesn't affect market too much. If a socialist country is involved in a capitalist country's market, what the capitalist government would do. This news gives me a possible answer.
In this article, we can clearly see the idea that Trump has to somehow create barriers to foreign investors and importing things in general since we have seen how he is increasing tariffs. Most of the economists argue against this because free trade has many benefits because it could create gains from trade for producers and consumers, but it would also leave people without jobs in the US, and this is why Trump wants to keep out these foreign investments. As said in a comment before this is clearly the government interfering in the market, and not letting it run its course because if the government did not interfere, the Chinese investors would probably own the Chicago stock exchange, but this is not the case, and we will see how this affects the economy because an investment of that size would definitely affect the economy.
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