When I was in my family business, we had quite an interesting customer base:
As its main theatre of operations was the Gulf of Mexico, Vulcan had two principal customers: McDermott and Brown and Root [a Halliburton division at the time] (whose construction operation was first divested to OPI, then Horizon Offshore.) It also serviced the other offshore contractors in the region, including Santa Fe, Raymond International, Movible Offshore (first Teledyne, then Global), Ingram (which was purchased by McDermott) and Fluor.
But Vulcan also had a wide variety of customers outside of the U.S. These included some of the major platform contractors, such as Heerema, ETPM, Micoperi (whose assets were purchaed by Saipem,) Uglands, Jardine and Nippon Steel. But these also included state owned (full or partial) oil companies which were doing their own platform installation: Aramco (Saudi Arabia), NPCC (UAE), ENAP (Chile), PDVSA (Venezuela), CMM (PEMEX), Brunei Shell, and CNOOC (China). [I have an entire presentation on our sales to the Chinese.]
Our international customers were, on the whole, good to do business with. They paid well and came back to us for the spare parts. In the years when Vulcan was active offshore, we routinely exported a third of our output.
This week one of those customers (or a related entity) spent their sinking US Dollars on something other than pile driving equipment: the purchase by Abu Dhabi of a significant share of Citibank, one of the US’ premier financial institutions. This is entirely sensible from the buyer’s standpoint. What else is there to do with depreciating dollars? What’s shocking from an American standpoint is the giddy reaction the whole transaction is getting from the “Americans” themselves. People in this country are, to use an old Pentecostal phrase, “running the aisles” about this. As Julian Delasantellis points out:
For me, the most surprising, and possibly the most upsetting thing about the Citigroup news was the absolutely orgiastic reaction to it. The general media, of course, saw this only in the context of something that would cause the stock market to go up, so it must be good. (Dead white American suburban young women = bad, rising stock prices = good; it’s not that hard to be a US TV news producer these days.) The Dow Jones Industrial Average opened strong, gave up most of its gains midday, then was rallying into the close to finish up 215, a fairly average price change these days.
If the electronic media are now history’s first draft, then, to judge by the reaction of the on-air personnel on business cable channel CNBC, America has just had its best day since the famous New York City Times Square victory celebrations at the end of World War II.
What a difference two years makes! After all of the bawling and squalling over the CNOOC/Chevron and the Dubai Ports deal, our media is ecstatic over this, which (coupled with the Saudis’ own substantial state in the bank) will arguably give more substantial control of the US economy to foreign entities than either of those transactions.
Why is this? The first is that this deal is part and parcel with bailing out our current ruling class from the mess it’s gotten itself into with the subprime mortgage fiasco. (The Fed’s excessive dropping of the interest rates is in this too.) Ruling class happy, media happy, everyone’s happy.
The second is the generally myopic view Americans take of their lives and country. As Delasantellis goes on to say:
As has been proven so many times in the recent past, from America’s budget and trade deficits to its crumbling infrastructure, its appallingly dysfunctional primary and secondary school system, its non-existent savings rate, and the total diffidence with which it approaches the global environmental impact of its prosperity, this is a country that looks at the prospect of any pain or inconvenience in the present with such boundless levels of abhorrence that it is more than willing to satisfy its heroin-like addiction to immediate gratification with sales of any or all of its national heirlooms.
A comparable absurdity would be Americans selling their houses and forever being renters in order to gain the requisite funds to, in the newly sacrosanct modern tradition, line up at big box electronic retailers in the cold early hours of the morning after Thanksgiving.
As I’ve said before, the basic problem we have here is that this country has gone on for so long, has been so successful, and has so few rivals currently out there, that Americans simply think that they (individually and collectively) are invincible, that no amount of blundering will have any adverse impact on our future.
But such is not the case. Unlike the Persians at the end of Herodotus, Americans have forgotten that it’s better to live in rugged places (literally or figuratively) and rule than to live in rich plains and be subject to others. Some of us are already looking abroad for shelter. Like the Anglicans who place themselves under provinces in the Global South, we implicitly or explicitly feel that those who direct our doings have abandoned us for their own selfish interests. Allowed to continue, the US will not be the country it was; in fact, in many ways it isn’t the country our ancestors fought to preserve (and in some cases, to separate.)
This kind of scenario invites conspiracy theorists. And I’m sure there are people out there (such as George Soros) who are pleased with this weakening. It’s the same question that Pavel Miliukov asked the Russian Duma in 1916 over a litany of Tsar Nicholas II’s mistakes (one of which actually buoyed the stock market:) “Is this stupidity, or is this treason?” In the case of Imperial Russia, it was mostly the former, and I suspect that it is also the case here. But, as Miliukov went on to say, “Choose either one, the consequences are the same.”
And those consequences aren’t pleasant to contemplate.