SWFs vs Free Trade

Matt Cooper says that sovereign wealth funds are "the opposite of free trade" and "anathema to a free-market economy". I don't see why that should be the case: if anything, the funds are a natural consequence of free trade.

If the US does a lot of free trade with some entity and runs a trade deficit with that entity, the entity in question will end up with a lot of dollars, and ultimately those dollars will be used to finance the US current-account deficit by investing in US stocks and bonds. Does it make any difference whether that entity is a corporation or a country? Not as far as the macroeconomics are concerned, although admittedly the politics are another matter.

Sovereign Wealth Funds might not live up to the ideals of laissez-faire economists who think that governments should never interfere in financial markets, but you don't need to be a laissez-faire economist to believe in free trade. And there's no irony in US banks being recapitalized by the entities which are running a trade surplus with the US. Indeed, it's exactly what you'd expect.