Brian Williams of NBC asked the Democrats a substantive and a provocative question about sovereign wealth funds — giant pools of money controlled and managed by foreign governments like China, Singapore, and Gulf oil states — investing in American companies like Merrill Lynch and Citigroup. This issue will be a rallying point for the protectionist left and right this campaign season. John Edwards and Hillary Clinton gave a lot of boiler point about more transparency and the need to do something. Barack Obama, clearly knowing nothing about the topic, talked about alternative energy.

But the U.S. attitude toward sovereign wealth funds is going to be the most important test of American acceptance of globalization. By this fall, there will be many more companies that get their funding from government investment funds from the Gulf State, Singapore, and China. Irwin Stelzer has made the best case for being wary about having a foreign government holding the purse strings of American businesses. But the fact is, these funds are going to be the most important engine of finance and growth capital in a global economy whether we like it or not. As a political matter, this is probably a losing issue for free traders. Yet all those politicians who want to deter foreign financial investment in American companies have to tell us what Citi, and Merrill, and all the other cash-strapped companies should do when they need to find new sources of capital if they can’t get access to these pools of wealth.