HuffPost: “McCormick…Helped Open Up China to U.S. Investment…Then, As a Hedge Fund Manager, [He] Profited From the Lower Investment Barriers He Lobbied For”
Lori Wallach, Director of Rethink Trade: “McCormick’s Approach…Was Classic Corporate Race-to-the-Bottom, Pro-Outsourcing…That Ended Up…Slamming American Companies and Workers”
PENNSYLVANIA — David McCormick made millions from investments in China as CEO of Bridgewater because of aggressively pro-China policies he advocated for as an official in the Treasury Department, according to new reporting from HuffPost.
ICYMI: HuffPost: Pennsylvania Republican profited from China trade policies he helped shape
- David McCormick, the leading Republican Senate candidate in Pennsylvania, helped open up China to U.S. investment as an official in the George W. Bush administration. Then, as a hedge fund manager, McCormick profited from the lower investment barriers he lobbied for.
- …the Republican contender’s record as a top Treasury Department official shows he repeatedly worked to open up investment opportunities in China for American financial firms. [McCormick’s] work not only helped meld the two countries’ economies in a way many American politicians have come to regret, but also benefited him personally in his subsequent roles as president and CEO of a massive hedge fund.
- McCormick’s campaign did not respond to a request for comment on his tenure in the George W. Bush administration and its relationship to his subsequent business dealings.
- As under secretary of the treasury for international affairs from 2007 to 2009, McCormick played a direct role in fostering increased trade between the two nations, especially by advocating for China to open up its markets to greater investment by U.S. financial firms.
- McCormick characterized his work as trying to ensure that China was trading with the U.S. in a reciprocal manner. In practice, that meant a strong focus on advocating for the interests of U.S. financial firms, which actually made offshoring jobs easier.
- McCormick also bemoaned growing calls in the U.S. for restrictions on trade with China and noted that the Bush administration was standing up to them by lifting barriers to Chinese investment in the U.S.
- McCormick’s efforts bore fruit. In June 2008, the Treasury Department touted a number of Chinese reforms making it easier for U.S. companies to invest in the Chinese financial sector, following a Cabinet-level meeting between then-Treasury Secretary Hank Paulson and his Chinese counterpart.
- In April 2018, when McCormick was co-CEO of Bridgewater, the firm launched the China All Weather Offshore Fund for U.S.-based investors to invest in Chinese stocks and bonds. The firm’s initial $1 billion investment — or 10 billion Yuan — made it the largest foreign hedge fund in China.
- “Mega-millionaire David McCormick is the ultimate shady insider who rigged the rules and then walked through the revolving door he created, selling out our national security to enrich himself and his Wall Street friends,” TaNisha Cameron, a spokesperson for the Pennsylvania Democratic Party said in a statement. “That’s why Pennsylvanians know they can’t trust him.”
- …expanding the presence of U.S. banks and other investment firms in China actually expedited the offshoring of domestic U.S. manufacturing jobs. A greater U.S. financial presence in China enabled companies that wanted to outsource in China to work with more familiar U.S. financiers, and increased the pool of capital available to those companies to scale up their production.
- “McCormick’s approach at Treasury during the Bush administration was classic corporate race-to-the-bottom, pro-outsourcing, free-trade ideology where he was keen to get U.S. financial institutions like investment banks to be able to provide capital for more factories and more production from China that ended up being the enormous trade deficit slamming American companies and workers,” said Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project, a liberal, antimonopoly think tank.
- Robert Scott, a former senior economist at the pro-labor Economic Policy Institute, had a similar assessment — and highlighted another way in which McCormick’s goals would provide political scaffolding for the larger offshoring regime.
- McCormick showed no concern about the loss of an estimated 2.4 million U.S. jobs from 1999 to 2011 due to the 2001 normalization of trade with China. The net outflow of jobs has had a particularly harsh — and lasting — impact on regions and communities that relied on manufacturing, leading to growing financial hardship, unemployment and accompanying social ills in those areas.
- McCormick has already been on the defensive about his time at the helm of Bridgewater, which included layoffs that resulted in Connecticut clawing back tax benefits.
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