3Com today withdrew its CFIUS application to be purchased by Bain Capital, in a deal where China's Huawei would have been a 17% minority partner. Without having to issue an official ruling, the Committee on Foreign Investment in the U.S. basically blocked the deal.

This is a big blow for the American economy. Not so much in the size of this modest deal -- $2.2 billion -- but in the message it sends to the rest of the world: America does not want your capital. Our borders are closed.

I wrote about the Bain - 3Com deal and the general importance of extending, not severing, our economic networks in "Breaking Metcalfe's Law."

In large portion, America's powerful economic engine has been built on our openness to the world economy -- its people, capital, and ideas. But now -- just as globalization spreads wealth and capitalism across the globe, increasing opportunities for peace and prosperity far beyond most of our wildest dreams -- protectionism flourishes. As one smart person told me last week: "In the era of globalization, America has the best hand to play. And we're not playing it."