From An Industrial Economy To A Paper Economy – The Stunning Decline Of Manufacturing In America

by Tyler Durden

Sep 6, 2016 6:30 PM

Submitted by Michael Snyder via The Economic Collapse blog,

Why does it seem like almost everything is made in China these days? Yesterday I was looking at some pencils that we had laying around the house and I noticed that they had been manufactured in China.  I remarked to my wife that it was such a shame that they don’t make pencils in the United States anymore.  At another point during the day, I turned over my television remote and I noticed that it also had “Made In China” engraved on it.  With Labor Day just hours in the past, I think that it is quite appropriate to write about our transition from an industrial economy to a paper economy today. Since the year 2000, the United States has lost five million manufacturing jobs even though our population has grown substantially since that time.  Manufacturing in America is in a state of stunning decline, our economic infrastructure is being absolutely gutted, and our formerly great manufacturing cities are in an advanced state of decay.  We consume far more wealth than we produce, and the only way that we are able to do this is by taking on massive amounts of debt.  But is our debt-based paper economy sustainable in the long run?

Back in 1960, 24 percent of all American workers worked in manufacturing. Today, that number has shriveled all the way down to just 8 percent.  CNN is calling it “the Great Shift”…

In 1960, about one in four American workers had a job in manufacturing. Today fewer than one in 10 are employed in the sector, according to government data.

Call it the Great Shift. Workers transitioned from the fields to the factories. Now they are moving from factories to service counters and health care centers. The fastest growing jobs in America now are nurses, personal care aides, cooks, waiters, retail salespersons and operations managers.

No wonder the middle class is shrinking so rapidly. There aren’t too many cooks, waiters or retail salespersons that can support a middle class family.

Since the turn of the century, we have lost more than 50,000 manufacturing facilities.  Meanwhile, tens of thousands of gleaming new factories have been erected in places like China.

Does anyone else see something wrong with this picture?

At this point, the total number of government employees in the United States exceeds the total number of manufacturing employees by almost 10 million…

Government employees in the United States outnumber manufacturing employees by 9,932,000, according to data released today by the Bureau of Labor Statistics.

Federal, state and local government employed 22,213,000 people in August, while the manufacturing sector employed 12,281,000.

The BLS has published seasonally-adjusted month-by-month employment data for both government and manufacturing going back to 1939. For half a century—from January 1939 through July 1989—manufacturing employment always exceeded government employment in the United States, according to these numbers.

You might be thinking that government jobs are “good jobs”, but the truth is that they don’t produce wealth.

 

Government employees are really good at pushing paper around and telling other people what to do, but in most instances they don’t actually make anything.

In order to have a sustainable economy, you have got to have people creating and producing things of value.  A debt-based paper economy may seem to work for a while, but eventually the whole thing inevitably comes crashing down when faith in the paper is lost.

Right now, the rest of the world is willing to send us massive amounts of stuff that they produce for our paper.  So we keep producing more and more paper and we keep going into more and more debt, but at some point the gig will be up.

If we want to be a wealthy nation in the long-term, we have got to produce stuff.  That is why the latest news from Caterpillar is so depressing.  In addition to the thousands of layoffs that had been previously announced by the industrial machinery giant, it appears that a fresh wave of layoffs has arrived…

Hundreds of mostly office employees received layoff notices at one of the largest Caterpillar Inc. facilities in the Peoria area this week, just as the company announced plans to close overseas production plants and eliminate thousands more positions.

A total of 300 support and management employees at Building AC and the Tech Center in Mossville this week received job loss notifications that included severance packages, 60 days notice and mandated Illinois Worker Adjustment and Retraining Notification Act letters.

During this election season, you will hear many of our politicians talk about how good “free trade” is for the global economy. But that is only true if the trade is balanced.  Unfortunately, we have been running a yearly trade deficit of between 400 billion dollars and 600 billion dollars for many years…

When you have got about half a trillion dollars more going out than you have coming in year after year that has severe consequences.

Let me try to break it down very simply.

Imagine that I am the United States and you are China.  I take one dollar out of my wallet and I give it to you and then you send me some stuff.

After a while, I want more stuff, so I take another dollar out of my wallet and send it to you in exchange for more products.

But that stuff only lasts for so long, and so pretty soon I find myself taking another dollar out of my wallet and giving it to you for even more stuff.

Ultimately, who is going to end up with all the money?

It isn’t a big mystery as to how China ended up with so much money. And when we can’t pay our bills we have to go and beg them to let us borrow some of the money that we sent to them in the first place.  Since we pay interest on that borrowed money, that makes China even richer.

This is why I am so obsessed with these trade issues.  They truly are at the very heart of our long-term economic problems.

But most Americans don’t understand these things, and they seem to think that our debt-based paper economy can just keep rolling along indefinitely.

In the end, history will be the judge as to who was right and who was wrong.

Source

USA: Hess to Splash USD 6.8 Billion in 2012

Hess Corporation, with headquarters in New York announced today a 2012 capital and exploratory budget of $6.8 billion, nearly all of which is targeted for Exploration and Production: $2.5 billion for unconventionals, $1.6 billion for production, $1.8 billion for developments and $800 million for exploration.

John B. Hess, Chairman and CEO, stated, “We believe that the investments we are making in unconventionals are lower risk and will generate long term profitable growth for shareholders. We expect to fund the majority of our 2012 program from internally generated cash flow and asset sales.”

Greg Hill, President of Worldwide Exploration and Production, said, “Our focus in 2012 will be on execution. We are committed to creating value and delivering sustainable growth in production and reserves from both our unconventional and conventional portfolios.”

Production expenditures of approximately $1.6 billion include:

• Drilling production and water injection wells at Shenzi (Hess 28 percent), and drilling production wells at the Llano Field (Hess 50 percent) in the deepwater Gulf of Mexico
• Drilling production wells on Block G (Hess 85 percent – operator) in Equatorial Guinea

Development expenditures of approximately $1.8 billion include:

• Commencing development drilling at the Tubular Bells Field (Hess 57 percent – operator) in the deepwater Gulf of Mexico
• Completion of field redevelopment and gas lift projects at the Valhall Field (Hess 64 percent) in Norway
• Concluding appraisal activities and progressing front end engineering and design work at WA-390-P (Hess 100 percent – operator) offshore Western Australia
• Progressing development of Block A-18 (Hess 50 percent) in the Joint Development Area (JDA) in the Gulf of Thailand, including wellhead platform installations and ongoing drilling activities

Exploration expenditures of approximately $800 million include:

• Drilling exploration wells in Ghana, Indonesia, Brunei and the deepwater Gulf of Mexico
• Acquiring seismic at the Dinarta and Shakrok Blocks (Hess 80 percent – operator) in Iraqi Kurdistan

Articles

• USA: Hess Corporation Announces Capital and Exploratory Budget of $5.6 billion for 2011
• USA: Hess Proceeding with Tubular Bells Field Development
• Norway: Hess Completes Transactions for Valhall and Hod Fields
• USA: Hess’ 4Q 2010 Income Dives
• USA: First MWCC’s Non-Member Receives Drilling Permit

Source

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USA: Aker Solutions to Provide Umbilicals for Anadarko’s Lucius Development

Aker Solutions has been awarded a contract for eight steel tube umbilicals by Anadarko Petroleum Corporation for the development of Lucius offshore field in the Gulf of Mexico.

The company did not disclose the contract value.

The scope of work includes the project management, design, engineering, and manufacturing of two electro/hydraulic dynamic production umbilicals, two gas lift dynamic umbilicals, three electro/hydraulic infield umbilicals and one gas lift infield umbilical, including all associated ancillary equipment required for installation and interface with the existing development. These umbilicals will utilise the patented Aker Solutions PVC profile matrix, which provides both predictable estimates of fatigue and friction, and improved crush and impact resistance.

“This contract award is an excellent step towards our goal of supplying equipment for Anadarko across many product lines, including umbilicals,” says Tove Røskaft, executive vice president of Aker Solutions’ umbilicals business area.

Management, engineering and manufacturing of the umbilicals will be performed at Aker Solutions’ facility in Mobile, Alabama.

Final deliveries will be made in Q3 2013.

The Lucius field is located in the Gulf of Mexico approximately 275 miles (442 kilometres) southwest of Fourchon, Louisiana in Keathley Canyon (KC) Block 874, 875 and 919, in a water depth of approximately 7 000ft (2 100 metres).

Truss spar

Lucius will be developed with a truss spar floating production facility with the capacity to produce in excess of 80,000 barrels of oil per day and 450 million cubic feet of natural gas per day. The spar is currently under construction at Technip’s facility in Pori, Finland and will be the largest of Anadarko’s operated spars — a deepwater production solution pioneered by the company in 1997.

The Lucius unit includes portions of Keathley Canyon blocks 874, 875, 918 and 919. Anadarko operates the unit with a 35-percent working interest.

Co-venturers in the Lucius unit include Plains Exploration & Production Company with a 23.3-percent working interest; Exxon Mobil Corporation​​ ​ with a 15-percent working interest; Apache Deepwater LLC, a subsidiary of Apache Corporation with an 11.7-percent working interest; Petrobras with a 9.6-percent working interest; and Eni with a 5.4-percent working interest.

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• USA: FMC Technologies Provides Subsea Systems for Anadarko’s Lucius Field
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• USA: Anadarko, Exxon Mobil Finalize Lucius Unitization Agreement
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Source

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USA: Enbridge Examines Stingray Pipeline after Gas Leak Reported

Enbridge is investigating the report of a small natural gas leak in the West Cameron Block 275, approximately 66 miles off the coast of Louisiana in the U.S. Gulf of Mexico.

A helicopter flyover was completed yesterday, and a three-foot diameter patch of bubbles has been spotted on the surface of the water in the vicinity of the Stingray natural gas pipeline.

”The Stingray Pipeline continues to operate under normal operating parameters at this time, in accordance with regulatory standards and guidelines, and we are in contact with regulatory authorities. A dive boat has been dispatched to the location, and we will commence an investigative dive as soon as weather conditions permit,” said Terrance L. McGill, senior vice president of natural gas operations and engineering for Enbridge. “If a leak is confirmed as a result of the diving activities, we will immediately begin repairs. We do not anticipate any potential business interruption to be material.”

Stingray Pipeline transports natural gas and injected condensate from approximately 53 fields in the High Island, West Cameron, East Cameron, Vermillion and Garden Banks Offshore Gulf areas.

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USA: Alliance Engineering to Design Topsides for Tubular Bells Field Spar Platform

Alliance Engineering, a subsidiary of Wood Group, has been awarded the detailed engineering and design of the topside facilities and deck for Williams Partners’ Gulfstar FPS™ spar production platform. This wet-tree platform will be installed in block 768 of the Gulf of Mexico’s Mississippi Canyon area to produce oil and gas from the Tubular Bells field, which is owned by Hess Corporation​ (Operator) and Chevron U.S.A. Inc.

The Gulfstar spar platform will be located in 4,300 feet of water and designed to process 60,000 barrels of oil per day and 200 MMscf of gas per day. The single-lift topsides will have three deck levels and include processing equipment, seawater injection equipment, utilities, an accommodation building with helideck, and pumping and compression equipment to export the treated oil and gas through departing pipelines. The completed deck will weigh approximately 7,000 short tons. Initial production is scheduled to commence in 2014.

“Alliance has been working with Williams Partners to develop their standard Gulfstar floating production system concept (FPS),” said Edmund Lunde, president of Alliance. “With concept development and FEED completed, we are pleased to continue working with Williams Partners on the detailed design of their first Gulfstar FPS. We are confident Williams, Hess and Chevron will benefit from our focus, skill, and experience in developing the Tubular Bells topsides.”

Articles

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What if… Is The US Prepared For Cuban Oil Rigs?

By John Konrad On January 10, 2012

Will the United States be prepared if Cuba’s new offshore rigs spill oil into US waters?

To address this question, personnel from the U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement (BSEE) completed a review today of the offshore oil rig Scarabeo 9 following an invitation from the vessel’s operator, Repsol. While aboard the Scarabeo 9, personnel reviewed vessel construction, drilling equipment, and safety systems  in anticipation of the rig’s upcoming drilling operations in Cuba’s exclusive economic zone in the coming months.

According to the Coast Guard, the  review is “consistent with U.S. efforts to minimize the possibility of a major oil spill, which would hurt U.S. economic and environmental interests”. While US regulators exercise no legal or regulatory authority over the rig, the review compared the vessel with applicable international safety and security standards as well as U.S. standards for drilling units operating in the U.S. Outer Continental Shelf. U.S. personnel found the vessel to generally comply with existing international and U.S. standards by which Repsol has pledged to abide.

In anticipation of an increase in drilling activities in the Caribbean Basin and Gulf of Mexico, the United States is participating in multilateral discussions with the Cuba as well as other countries nearby including Bahamas, Jamaica and Mexico on issues including, drilling safety and oil spill preparedness. The Coast Guard views the cooperation as providing valuable information on each country’s spill response plans and capabilities. The Coast Guard is also working to update contingency plans for spills on international waters that could potentially affect U.S. waters and coastline.

In addition to international cooperation, the USCG and BSEE have involved more than 80 federal, state, local, and maritime industry representatives in spill response plans. The group held a table top exercise on Nov. 18, 2011 to address a hypothetical international spill off the coast of Florida. The exercise allowed participants to discuss sensitive environmental areas, planning strategies, likely issues and response coordination principles that responders would face, as well as gather additional information to use in future planning.

The USCG notes the review conducted today does not confer any form of certification or endorsement under U.S. or international law.

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‘US builds hospitals in Georgia, readies for war with Iran’

The United States is sponsoring the construction of facilities in Georgia on the threshold of a military conflict in Iran, a member of Georgian opposition movement Public Assembly, Elizbar Javelidze has stated.

According to the academician, that explains why President Mikhail Saakashvili is roaming the republic opening new hospitals in its regions.

“These are 20-bed hospitals…It’s an American project. A big war between the US and Iran is beginning in the Persian Gulf. $5 billion was allocated for the construction of these 20-bed military hospitals,” Javelidze said in an interview with Georgian paper Kviris Kronika (News of the Week), as cited by Newsgeorgia website.

The opposition member stated that the construction is mainly paid from the American pocket.

In addition, airports are being briskly built in Georgia and there are talks of constructing a port for underwater vessels in Kulevi on the eastern Black Sea coast in Georgia.

Javelidze believes that it is all linked to the deployment of US military bases on the Georgian soil. Lazika – one of Saakashvili’s mega-projects, a new city that will be built from a scratch – will be “an American military town”. According to the politician, “a secret airdrome” has already been erected in the town of Marneuli, southern Georgia.

The opposition member wondered who would protect Georgia in case if Iran fires its missiles against US military facilities on the territory of the Caucasian state.

All in all, about 30 new hospitals and medical centers were opened in the former Soviet republic in December last year. The plan is to build over a hundred more.

As for Lazika, the Georgian president announced his ambitious idea to build a second-largest city in Georgia, its western economic and trade center, at the end of 2011. According to the plan – which was slammed by his opponents and many analysts – Saakashvili’s dream-town will become home to at least half a million people within a decade.)

Source

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Plan in place to deal with Iran threat

Regional security expert Dr Theodore Karasik says contingencies are in place should Iran follow through with threat to close Strait of Hormuz

World powers have started drawing up contingency plans in case Iran follows through with its threat to seal off the vital Strait of Hormuz.

Iranian officials have threatened to block the waterway if new sanctions, aimed at discouraging Iran’s nuclear programme, harm Tehran’s oil exports.

Tehran has announced plans for military exercises in the strait, the world’s most vital oil lane with 16 million barrels of crude passing through it every day. Gulf oil producers are now working with the West on a plan to keep supplies steady if Iran follows through with its threat. Regional security expert Dr Theodore Karasik said: “In the past Iran has made threats of closure but given the current environment the threats are being taken more seriously. All sides are preparing for the potential that Iran would launch this as an opening salvo to a much wider confrontation.”

Karasik, director of research and development at the Institute for Near and Gulf Military Analysis, added that Tehran’s latest threat to blockade the waterway showed it  “acting in a more assertive, almost belligerent way”. Reuters reported that a new oil pipeline stretching from Abu Dhabi to Fujairah could be used to transport crude outside of the Gulf, allowing it to be loaded onto tankers waiting on Fujairah’s Indian Ocean coastline.

Last month UAE energy minister Mohammad bin Dha’en Al Hameli said the strategic pipeline would be ready “soon”, and Reuters quoted one industry source as saying: “It’s now only a matter of pushing a button.” However, Karasik said that any use of the UAE pipeline, and a similar plan to shift some of Saudi Arabia’s oil to its Red Sea coast, would not compensate for a full closure of the strait.

“The creation of these alternative routes is part of a strategy to have less of a reliance on the strait itself, but these lines are not mature enough to offset the potential losses,” he said. Britain also said yesterday it was sending its newest warship – Royal Navy destroyer HMS Daring – to the Gulf.

“The rhetoric has reached such a feverish pitch now that you have to take every word that is being said as being serious, and there is too much move­ment ongoing now in terms of military exercises and manoeuvres to rule that this is a normal situation,” said Karasik.

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