Country of Exiles (6 page)

The increase in the number of trucks has caused, in turn, an increase in the number of truckers, with six-hundred-thousand new drivers on the road between 1990 and 1997. A giant army of more than three million people—mostly white men but one-fifth minority and the largest percentage of women ever (5.3 percent)—drove heavy-duty trucks by day and night, mostly alone and harried by deadlines, and sometimes confused about what part of the country they were in. The
demand for new drivers skyrocketed by 1998 and companies recruited gay truckers as well as women, tailoring truckstops to suit their needs. Even the federal government pledged $1 million to help train “dislocated” unemployed Americans to drive the big trucks.
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What occupant of a passenger car has not felt the buffeting of the eighteen-wheelers, the giant tractor-trailer rigs and turnpike-doubles, as they rip across the landscape?

Along with the trucks were the ships, coming from all points on the compass, across the Pacific from Asia, through the Gulf of Mexico, and across the Atlantic. By the mid-1990s American oceanborne commerce had reached nearly $520 billion, a stunning increase from the $45 billion in 1970.
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The Pacific Asian trade, which before 1975 passed mostly through the Panama Canal to Gulf and eastern ports, now went straight to California, packing the big western marine terminals with everything from Chinese plastics to Peruvian seafood.
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The Suez Canal, after years of fading use, also returned (if unsteadily) as a major avenue for goods from South Asia, energizing in some degree such eastern port cities as Baltimore and Norfolk.
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Most of this trade was not carried by U.S. ships; by the 1980s, American-owned carriers accounted for less than 14 percent of international ocean commerce, a steep fall from the days of World War II, when American shipping led the world. Yet however much nationalists might have regretted it, the decline in commercial seapower had no effect, one way or the other, on the growth of American international trade, which had risen nearly 100 percent since 1970.
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Since the late 1980s, a new generation of mammoth container-vessels were on the seas, most owned by Asian and European companies. Like the tractor semitrailers, they were far bigger than the ships of the recent past. They carried twenty-foot and even forty-foot-long containers shaped like boxcars, standardized to hold
practically any kind of commodity, from cars to boots. Uniform and dull, the newest ships were too big to navigate the Panama Canal.
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In 1996 Maersk, the Danish-owned carrier, together with partner Sea-Land, an American firm and the top container line in the world, launched the largest containership of them all, the
Regina Maersk
. Driven by the world’s largest diesel engine, it was half a mile long, with capacity to carry 6,000 twenty-foot containers arranged in five tiers, above and below the deck, aft and stern. Fully automated and computerized, it had only a skeletal crew of thirteen who met only at meals and otherwise communicated by walkie-talkie. To traverse the deck by day was like being in a monster hotel at night with no one around.
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In July of 1998, the
Regina Maersk
sailed for the first time into the New York harbor but only with difficulty since that harbor, like every other harbor on the East Coast, was too shallow to accommodate it. Its presence excited intense interest, and even a congressional hearing dwelled on the challenge it posed to American shipping. By all accounts,
Regina Maersk
was the wave of the future and unless New York and other ports increased the depth of their harbors, Maersk, the third most powerful containership line, threatened to take its business elsewhere.
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Super-containerships have changed the seascape. They have brought to life huge ports, the deeply dredged gateways where the different highways of the world (rail, road, ocean, and, to some degree, air) intersect to form the key axes of international trade. Among these ports is the Port of Long Beach in southern California, which, along with its nearby neighbor, the Port of Los Angeles, forms one continuous harbor in the San Pedro Bay and constitutes the busiest port complex in the United States.
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Emerging over the past fifteen years, Long Beach has become in every way, physically, politically, and economically,
a monument to the international circulation of goods.

In physical terms, the Port of Long Beach has undergone constant change since its beginnings as a single little dock in 1912. To look down on it from its highest point (the Harbor Square administration building) is to see a vast commercial choreography—the many piers with their berths that hold the incoming and outgoing ships; the crane gantries, as tall as twenty-story skyscrapers, hoisting cargo off and on the ships; the sloping, raised highways leading into and around the piers; the two long rail lines starting at the docks and then reaching far back into downtown Los Angeles; the giant container yards; and the trucks, the thousands of trucks in their lollypop colors (red, green, blue, yellow, even maroon, purple, and pink), pouring onto the port ramps and through the port gates, lining up by the hundreds, ready for the day’s business.
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The Port of Long Beach, however, is also fascinating for its political character. Although authorized “into existence” by the State of California, it has, for years, inhabited the shadow world of public authorities, a world largely beyond the scrutiny and control of the American public, or any other body, for that matter.
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Governed by a board of five commissioners (plus a president) appointed by the city, the Long Beach Port Authority functions as a big landlord, renting properties (berths and terminals) to the world’s ocean carriers. It has the power to finance, build, and manage capital projects; to issue tax-exempt bonds; and to contract with local, state, and federal governments, as well as with foreign governments. It controls all salaries, appointments, contracts, and budgets.
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Its authority, to be sure, is hardly total, though one trade analyst at the port saw fit in 1997 to boast that “we are accountable to no one.”
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Environmental and state laws, for one thing, confine development along the shore, often to the great frustration of
the port management. Nevertheless, like the one hundred other similar marine or port terminals in the country (including the Port Authority of New York and New Jersey, prototype of all such ports), the Port of Long Beach resembles a semi-sovereign city-state. Technocratic and outside ordinary democratic political life, it has the power nearly equal to that of any state government to affect the way we live.
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It is as a hub in the circuitry of global commerce that this semi-sovereign port holds the most interest. Before the 1970s, when international trade played just a small part in the U.S. economy, few Americans beyond southern California thought much about the Port of Long Beach. Since the mid-eighties, however, the port itself has become a dynamic agent in its own right, with its own Washington lobbyist, in arguing for the opening of America to foreign commerce. Since 1980 it has offered berths to more than twenty shipping lines, mostly Asian (and these owned principally by Korean, Japanese, and Chinese firms), each leasing a terminal for several million dollars annually.
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In 1990 the combined ports of Long Beach/Los Angeles handled 100 million tons of cargo; five years later, Long Beach alone was carrying this volume, or 25 percent of America’s international waterborne trade.
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Everything imaginable passed through the Port of Long Beach in 1995: 22 million tons of petroleum; 12 million tons of plastics, clothing, and furniture; and 1.2 million tons of food—nuts and fruits from Israel, Chile, and Italy, fish from Peru, shrimp from Thailand. Most of it was not destined for the Los Angeles basin but for discount stores in Kansas City, Missouri, and the deli counters in Wells, Maine.
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So much space was being opened for harbor expansion at this Long Beach complex that new space had nearly run out, forcing Long Beach/Los Angeles to spend millions for more dredging in San Pedro Bay.
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So many megaships docked to
unload their cargo that bottlenecks of all sorts began to hobble the port. The
Wall Street Journal
wondered in the fall of 1997 “how the transportation infrastructure was going to handle the country’s growing appetite for goods.” “Nobody was ready for so much freight.”
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But why had all this coordinated movement of goods and people, all this turbulent trade, come about in so short a timespan? How was it that in less than fifteen years so many trucks and ships and trains were moving so many goods on so many highways and through such extraordinary gateways as the Port of Long Beach? The answers are complex, to be sure. Some analysts see this commerce as an outcome of intensified global competition (attended by the collapse of trade barriers, and the government privatization of the economy in many countries) that accompanied the end of the Cold War. Others have looked at dropping interest rates, low labor costs, weak unions, or at what the
Wall Street Journal
called “the country’s growing appetite.” All these answers have merit, but I want to consider three conditions: the corporate mergers of the 1980s and nineties, which pressured business to distribute goods widely and quickly; government deregulation, which helped trigger both mergers and transport growth; and the promotion of intermodal transport.

From the 1980s onward, the United States has experienced the greatest merger movement in its history, with only a few letups, such as a crisis of short duration at the end of George Bush’s presidency in 1991 when the stock market crashed. There have been merger phases before, times when corporate moguls erected giant firms to control markets, prices, and
labor, and always to deliver goods with all due speed. The first great wave of mergers occurred at the turn of the century, when investment banker J. P. Morgan created U.S. Steel, the original $1 billion deal: oblivious to the goods themselves, Morgan’s plan was to get for himself and other bankers reliable streams of income. The next phase erupted in the 1920s, with the concentrations in manufacturing, mining, gas, and electricity, then another in the 1950s and sixties with the popularity of huge horizontal firms or conglomerates often consisting of totally dissimilar businesses. But none of that compared in magnitude to the mergers of our own time, especially in recent years when, according to the
Wall Street Journal
, “the unthinkable has happened”: since 1994, every year has set a record in the numbers and dollar value of the domestic mergers, from $347 billion worth in 1994 to $659 billion in 1996 and $991 billion in 1997.
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The year 1998 reached the $1.6 trillion mark, equaling the combined worth of all the mergers completed between 1990 and early 1996.
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Mergers took place in a vast range of enterprises, from hospitals and pharmaceuticals to drugstores and book publishing. Telecommunications saw the coupling of four huge phone companies; two merged corporations alone controlled two-thirds of all phone lines in the U.S.
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Mergers also shrank the number of long-haul railroads from forty-two in 1980 to four in 1998.
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So, too, the airline business entered “the final phase of consolidation,” according to one analyst at Salomon Brothers, with the six major airlines forming routing and marketing alliances with one another.
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Shipping carriers, American and foreign, either merged or forged “strategic cross-border alliances,” securing their grip on many lanes of commerce. “The inevitable and inexorable process of consolidation continues,” said Ray Miles, president of London-based Canadian Pacific, of container shipping. “The whole concept of a
national flag carrier is virtually dead. Across the board you are seeing the creation of truly global companies,” observed John Reeve, a maritime expert.
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In the entertainment and media field, investment bankers managed the consolidation of the biggest movie theater chain in the world, linking together Regal Cinemas with United Artists Theater Group and promising to bring gigantic movie complexes—with identical movie fare but “loaded with amenities from better concessions to cozy love seats”—to anywhere in suburban America.
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In the mid-nineties, industries from gold mining and gambling to hotels and department stores united together, each becoming the largest of its kind either in North America or in the world.
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In a time bursting with bravado about free markets, oligopoly also reared its face in banking, just as it did in real estate and newspapers. Perhaps the most startling bank merger of the era was the $69 billion union in 1998 of Citicorp with Travelers Corporation, though by 1995 banking was already well on its way to slimming down to a “handful of gigantic institutions,” according to the
Wall Street Journal
. Thus continued the delocalization of the banking system, the moving of headquarters hither and yon across the country, and the liquidation, through the introduction of ATMs in every viable place around the world, of face-to-face banking (except in the case of lucrative mortgages and auto loans).
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Delocalization of ownership marked newspapers as well, with the Gannett newspaper chain devouring one family-owned and local newspaper after another to achieve an astonishingly uniform and predictable approach to reporting throughout suburban America; so, too, the
New York Times
—already owner of twenty-one regional newspapers, twenty magazines (including
McCall’s, Tennis, Golf Digest
, and
Family Circle
), and several television and radio stations—acquired the independent
Boston
Globe
, for the sum of $1.1 billion.
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Not surprisingly, the
Time’s
editorial page, in the spirit of its own business method, told its readers, in three separate editorials over the course of two months, that they had little to fear from the “monster mergers” in banking. Of the Citicorp-Travelers merger, the
Times
observed: “The fact is that Citigroup threatens no one.” Americans have “nothing to fear from huge banks,” the paper reiterated a week later, “as long as there are other huge banks lurking in the same neighborhood,” but how many big banks could be expected to fit in the same neighborhood?
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