Since the credit crisis began, “beggars can’t be choosers” (BCBC) has become an increasingly prominent argument against restrictions on sovereign wealth fund investments in the United States. Here is one of my favorite examples, arguing against disclosure lest the citizens of Wealthland get wind of their government losing money on Wall Street while being badmouthed in Washington. Whatever your views might be on sovereign investment, BCBC strikes me as a lousy premise for regulation. Even now. But I heard a more nuanced and sensible variation on the argument at a conference yesterday: the fact that investment flows are drying up raises the potential cost of regulatory overreach; it should not preempt a debate on the merits.

Of course this may be a distinction without a difference. Greg Ip at The Economist observed at a talk today that Sen. Schumer had led the fight against the Dubai Ports deal a few years ago, but now may send banks hither and yon in search of capital. Here is some evidence of Schumer moderation, but hardly a turnabout. Schumer puts a surprising lot of stock in the IMF-brokered (NOT/NOT IMF-written) principles coming out next week. My two cents on the principles and the sovereign wealth brouhaha are here (a short version sans footnotes coming up in The International Economy).

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