Another stunning Trump surprise: $50-billion investment in USA promised by Masayoshi Son
The master showman who lives atop Trump Tower pulled off another media coup yesterday, descending to the lobby with billionaire Masayoshi Son, who announced plans to invest $50 billion in the U.S. economy and generate 50,000 jobs. Best of all, Mr. Son stated that the planned Trump administration deregulation is the reason for the massive commitment:
"We are going to invest $50 billion in the U.S. and commit to create 50,000 new jobs," Son told reporters. "We (will) invest into the new startup companies in the United States."
The Japanese businessman was at Trump Tower to celebrate Trump's election victory, he said "I just came to celebrate his new job," Son remarked. "Because he said he would do a lot of deregulation, I said, 'This is great, the US will become great again'."
The hysterical predictions of economic disaster under Trump by Nobel Prize-winning economist and New York Times columnist Paul Krugman are looking more and more foolish by the day. In fact, Trump is building a wave of enthusiasm for investing in America.
The contrast in height between Son and Trump was obvious, but aside from physical stature, the two men bear some resemblance to each other. Jonathan Soble wrote a rather flattering profile of Son in the New York Times on Monday, the day before Son’s surprise announcement. Somehow, I suspect that the Times was taken by surprise and would not have published such a piece if it had known Son was about to endorse the prospects of the American economy under Trump.
I gather from the inability of most people on television to pronounce his name that Son, one of the most famous business people in Japan, is not widely known on this side of the Pacific. I have been following his career for decades. He is a maverick nonconformist who delights in shaking up the establishment and who has always prized innovation and speed, traits not often associated with the Japanese business establsihment.
There are good reasons to describe Son (pronounced sohn, with the long o, pronounced like “oh darn it”) as an outsider. His family is of Korean origin, which makes them an oppressed minority within Japan. So nasty has been the tradition of scorn and discrimination heaped upon people of Korean ethnicity in Japan that the family adopted a Japanese surname, Yasumoto, in order to try to “pass” as Japanese. Son’s family managed to prosper in Japan by operating Pachinko parlors, which are a form of minor gambling on a pinball game, played for prizes often exchanged for cash by skilled players. It is commonly believed in Japan that ethnic Koreans dominate this industry and that connections to unsavory sorts of figures are common in the business. I have no idea if Mr. Son’s family had any such connections, but coming out of the industry with a Korean background puts one at a severe disadvantage in functioning within the Japanese power structure at any level.
As a result of this prejudice, Son’s family sent him to the United States to receive his education, starting with high school in South San Francisco, two years at Holy Names University, then transferring to the University of California, Berkeley, from which he graduated. Minus the emigration and ethnic discrimination, this story parallels that of Trump, who didn’t fit in, was sent to military school, and then worked his way up to a final two years at a prestigious university, via performing well at a less selective school for freshman and sophomore years.
Like Trump, Son likes shaking things up. Soble of the New York Times:
Mr. Son revels in confrontation, a trait that sets him apart in harmony-obsessed Japan. Twice, he has threatened to set fire to himself or the offices of Japanese telecommunications regulators — the first time in a dispute over access to fiber-optic cable, the second in a fight over internet censorship. He apologized in the second instance, in 2010, calling the threat an inappropriate joke.
In 2013, he apologized again at a news conference after he became involved in a shouting match with government officials over plans to allocate cellular spectrum to KDDI, a SoftBank rival. “I thought I had grown up,” he said.
Also like Trump, Son is an intuitive decision-maker. He has had his share of difficulties, but he has also made brilliant visionary investments. Now he has enlisted the sovereign wealth fund of Saudi Arabia to provide half of the $50-billion package he plans to invest.
Almost certainly, some of the investments planned by Son were in the pipeline already. One doesn’t come up with that magnitude of investments in a few days. Ana Swanson of the Washington Post reports:
Although Trump claimed credit for the investment, Roger Entner, an analyst at Recon Analytics, argued that much of the $50 billion may have already been destined for U.S. technology companies.
"I think it’s making hay out of something that was there already," said Entner. "In all likelihood, this comes out of the $100 billion fund. Considering the extremely large part that the U.S. has in the high-tech economy, [Son] would have probably invested something in the neighborhood anyway."
Maybe so. But businesses make decisions at the margin, where tax rates and regulatory expense and delay really do influence outcomes. It would be ridiculous to argue that Trump’s planned moves on taxes and regulation will not influence foreign investors. For everyone but liberal academics and journalists, it is common sense.
But Swanson also provides some intriguing clues as to where some of the money will go:
Son told reporters at Trump Tower that the funds would be invested into American start-ups. As he spoke, Son brandished a piece of paper with the same figures that Trump had announced. The paper appeared to specify that the investment would be made in the next four years.
The paper also contained the logo of Foxconn, a major supplier for Apple’s iPhones. It was not immediately clear what role Foxconn would play in the deal, but analysts speculated the company could be responsible for the additional $7 billion in investment and 50,000 new jobs listed on the paper. Foxconn could not be reached for comment.
"Seven billion [U.S. dollars] could mean that they’re going to build a factory or multiple factories in the U.S. to assemble phones. We don’t know that, but that would be the speculation," says Entner.
Time will tell on where the money goes, and how many other foreign investors follow Son’s lead. Given the troubles afflicting the world economy, the United States has every chance of attracting investment capital that will help spur our economy to re-industrialize.