The Reform Party of California Commentary (RPCA) previously commented on an impending purchase by China’s food supplier, Shuanghui International Ltd. of Smithfield Foods, Inc., a U.S. company that is the word’s biggest pork producer.[1] The key concerns related to intellectual property and the inherent unfairness of how our competitors can access U.S. markets, intellectual property and assets, while U.S. firms do not have equal access.

The fundamental argument was that we are locked in a long-term battle between China’s state capitalism and Western style private capitalism. The competition isn’t just over pork and it isn’t being played on a level field. The fight is about everything related to trade, our economy and economic strategy, our standard of living and ultimately, our national security. None of that overstates the case.[2] The story received some coverage in the press and then it faded into obscurity.[3] If consummated, the deal would be the biggest Chinese buyout of a U.S. company.

The deal is approved

The deal has just faded out of obscurity. According to a new report in the Wall Street Journal (WSJ), the transaction apparently will go through.[4] The Committee on Foreign Investment in the U.S. (CFIUS) has approved it. The CFIUS is an obscure interagency committee in the Treasury Department. It reviews international business transactions for national security implications.[5] The WSJ characterized the deal approval as a signal to the world that large U.S. companies “are available as acquisition targets”. The WSJ implied that Smithfield shareholders would approve the buyout in a vote to be held on September 24 and that because neither party mentioned it, the CFIUS did not impose any restrictions on the sale from national security concerns.

Key information that is missing is exactly what the CFIUS analysis was and why they decided to allow the deal as originally proposed, assuming they imposed no changes. Unfortunately, getting that information that would probably require a Freedom of Information Act request. Even if a FOIA request were filed, it would likely be redacted into oblivion in the name of “national security”. The problem with government actions like this is that it requires trust that whatever is done, is best for the public interest.

As the RPCA continuously argues, the nature of two-party politics provides no compelling reason to believe that service to an ideologically- or special interest-unfettered public interest is the primary goal here.[6] That attitude is grounded in a simple matter of a loss of trust in government and the two-party system that built it.[7] On its face, approval of the Smithfield transaction by the CFIUS arguably reflects a failure of the CFIUS to understand the context and implications of national security in the larger context of the life and death economic struggle we are in. All or most of that failure is due to a two-party political system that is focused on serving itself before serving the public interest.


1. Link:

2. Some will no doubt downplay this as a single incident with ramifications that cannot be extrapolated to anything more than this transaction alone. From that point of view, calling this a piece of a larger life and death struggle between two ideologies, state vs. private capitalism, may be considered melodramatic ignorance and/or cynicism grounded in something or another. That is one way to look at it. From the RPCA’s point of view, nothing is overstated. The concerns expressed here are based on a fair context., unspun information in the public record and unbiased common sense. Critics of the conclusions drawn here have a responsibility to prove their point. Until then, the facts and logic the RPCA applies to this situation and its extrapolation to a larger picture is reasonable and defensible.

3. Links: Bloomberg story:; Senate Agriculture Committee video and witness statements;

4. Wall Street Journal, Saturday, September 8, 2013, page B3, online at Other media commentary:;

5. Link:

6. Link:

7. An excellent case in point on the loss of trust issue is what President Obama is facing. He is mired in trying to cajole the American public into supporting an attack on Syrian President Bashar al-Assad for using chemical weapons to kill his own people. There is an awful lot of skepticism going on outside the beltway. Why is that? Leaders of the two-party system need to step back and ask themselves why most of the public doesn’t trust them or nearly anything they want to do (; The distrust is directed at both parties. Unfortunately, introspective navel gazing is not part of the behavioral toolkit the power elites access. For them, “leadership” is a mostly matter of putting high octane gas in the tank and smashing the bulldozer full speed ahead in service to the two-party system, not in service to the public interest. That bulldozer moves straight ahead regardless of who or what is in its destructive path. The public’s loss of trust is no surprise to anyone, except maybe the power elite and blind ideologues.