War as wealth-generator. More, please.

The five pillars of the U.S. military-industrial complex
By Rodrigue Tremblay
Online Journal Guest Writer

Sep 25, 2006, 00:56

"Over-grown military establishments are under any form of government inauspicious to liberty, and are to be regarded as particularly hostile to republican liberty." --George Washington (1732-1799), 1st US President

"[The] conjunction of an immense military establishment and a large arms industry is new in the American experience. . . . In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist." --Dwight D. Eisenhower (1890-1969), 34th US President, Farewell Address, Jan. 17, 1961

"It is part of the general pattern of misguided policy that our country is now geared to an arms economy which was bred in an artificially induced psychosis of war hysteria and nurtured upon an incessant propaganda of fear." --General Douglas MacArthur, Speech, May 15, 1951

In the 1920s, President Calvin Coolidge said, "the business of America is business." Nowadays, it can be said that the arms industry and permanent war have become a big part of American business, as the offshoot of a well-entrenched military-industrial complex. This is a development that previous American men of vision, men like President George Washington and President Dwight Eisenhower, have warned against as being intrinsically inimical to democracy and liberty. However, the current Bush-Cheney administration is not afraid of such a development; its principal members are part of it and are instead very busy promoting it.

Wars, especially modern electronic wars, are very murderous, but they are also synonymous with big cost-plus contracts, big profits and big employment for those who produce the required military gear. Wars are the paradise of profiteers.

Wars are also a way for mediocre politicians to monopolize both the news and the media in their partisan favor by whipping up patriotic fervor and by pushing for narrow-minded nationalism. Indeed, to inflame patriotism and nationalism is an old demagogic trick used to dominate a nation. When that happens, there is a clear danger that democracy and freedom will be eroded, and even disappear, if that development leads to an exacerbated concentration of power and political corruption.

The terrorist attacks of Sept. 11, 2001, were a bonanza for the American military-industrial complex. This was an event, a "New Pearl Harbor," that some had openly been hoping for. The reason? These attacks gave the perfect pretext to keep military expenses, which had been expected to fall after the demise of the old Soviet Empire, at a high level. Instead, they provided the rationale for dramatically increasing them, by substituting a "War on Terror" and a "War against Islamists" as a replacement for the "War against Communism," and the "Cold War against the Soviet Union". In this new perspective, the gates of military spending could be open and flowing again. The development of ever more sophisticated armaments could go forward and thousands of corporations and hundreds of political districts could continue to reap the benefits. The costs would be born by the taxpayers, by young men and women who die in combat and by remote populations who happen to lie under the rain of bombs about to fall upon them and their homes.

Indeed, in September 2000, when the Pentagon issued its famous strategy document entitled "Rebuilding America's Defenses," the belief was expressed that the kind of military transformation the planners were considering required "some catastrophic and catalyzing event -- like a new Pearl Harbor," to make it possible to sell the plan to the American public. They were either prescient or lucky, because one year later, they had the "New Pearl Harbor" they had been hoping for.

The military-industrial complex needs wars, many and successive wars, to prosper. Old military equipment has to be repaired and replaced each time there is a hot war. But to justify the enormous costs of developing ever more deadly weapons, there needs to be a constant climate of fear and vulnerability. For example, there are many reports, originating from medical and international observers, that the Israeli attacks against Lebanon and Gaza during the summer of 2006, allowed for the use of 'new American-made weapons.' Such weapons are reported to include depleted uranium (DU) bombs, 'direct energy' weapons and new chemical and biological weapons. These weapons not only make the act of homicide easier but they also contaminate the environment with radioactive DU particles for decades to come.

But, to build a compact strong enough to steer a democratic country on the path of a permanent war economy takes an alliance of interests between militarists, industrialists, politicians, sycophants and propagandists. These are the five pillars of the military-industrial complex, as can be found in the United States.

1. The U. S. military establishment

In 1991, at the end of the Cold War, the U.S. defense budget was $298.9 billion. In 2006, that budget had increased to $447.4 billion, and this does not included the $100 billion-plus spent in the Iraq and Afghanistan wars. It is estimated that American military expenditures represent, at a very minimum, close to half of total world military outlays (48 percent of the world total in 2005, according to official figures), while the U.S. accounts for less than 5 per cent of world population and about 25 per cent of world total output. As a percentage, the U.S. military expenses gobble up a minimum of 21 percent of the total American federal budget (2006=$2.5 trillion). Such a military budget is larger than the gross domestic product (GDP) of some countries, such as Belgium or Sweden. It is sort of a government within a government.

In 2006, the U.S. Department of Defense employed 2,143,000 people, while it estimates that private defense contractors employ 3,600,000 workers, for a grand total of 5,743,000 defense-related American jobs, or 3.8 percent of the total labor force. In addition, there are close to 25 million veterans in the United States. Therefore, it is safe to say that more than 30 million Americans receive checks which originate directly or indirectly from the U. S. military budget. Assuming conservatively only two voting-age people per household, this translates into a block of some 60 million American voters who have a financial stake in the American military establishment. Thus the clear danger of a militarized society perpetuating itself politically.

2. The private defense contractors

The five largest American Defense contractors are Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. They are being followed by Honeywell, Halliburton, BAE Systems and thousands of smaller defense companies and subcontractors. Some, like Lockheed Martin in Bethesda (Maryland) and Raytheon in Waltham (Massachusetts) draw close to 100 percent of their business from defense contracts. Some others, like Honeywell in Morristown (New Jersey), have important consumer goods divisions. All, however, stand to profit when expenditures on weapons procurements increase. In fact, U.S. defense contractors have been enjoying big Pentagon budgets since March 2003, i.e. since the onset of the Iraq war. As a result, they have posted sizable increases in total shareholder returns, ranging from 68 percent (Northrop Grumman) to 164 precent (General Dynamics), from March '03 to September '06.

It also has to be pointed out that private defense contractors play another social role: they are big employers of former generals and former admirals from the U.S. military establishment.

3. The political establishment

In the U.S., President George W. Bush, a former oilman, and Vice President Dick Cheney, as former chairman and CEO of the large oil service company Halliburton in Houston (Texas), epitomize the image of politicians devoted to the growth and development of the military-industrial complex. Their administration has expanded the military establishment and they have adopted a militarist foreign policy on a scale not seen since the end of the Cold War and even since the end of World War II. indeed, under the Bush-Cheney administration, the arms industry has become very profitable. Multibillion dollar contracts to sell planes and tanks to various countries in an increasingly lawless world are going full swing. Close to two-thirds of all arms exports in the world originate from North America.

Congress, for its part, is indebted to defense corporations that operate military plants in each congressman's district or senator's state, besides owing some gratitude to the lobbies that provide funds and media support in election times.

4. The "think tanks" establishment

The brain-trust and the sycophants behind the war-oriented economy form an interlocking network of Washington-based so-called 'think tanks' that are financed by the rich tax-exempt foundations which have billions of dollars of assets, such as, for example, the John M. Olin Foundation, the Scaife Foundation or the Coors Foundation, etc. Among the most influential and representative think tanks, whose mission is to orient American foreign policy, one finds the American Enterprise Institute (AEI), the Heritage Foundation, the Middle East Media Research Institute, the neoconservative Washington Institute for Near Eastern Policy, the Center for Security Policy, the Jewish Institute for National Security Affairs, the Project for the New American Century (PNAC) and the Hudson Institute. Such think tanks serve a double purpose: they provide government officials with policy papers on various topics, usually on the very conservative side; and, they serve as incubators for government departments, supplying them with already trained personnel and providing employment for public officials who are out of office.

The same revolving door that exists between the military establishment and defense contractors is also observed to exist between the Washington-based think tanks and U.S. government departments.

5. The "propaganda" establishment

The pro-war economy propagandists are to be found in the fundamentally right-wing American media industry. This is because the selling of war-oriented policies requires the expertise that only a well-oiled propaganda machine can provide. The most potent propaganda tool is television. And there, Rupert Murdoch's Fox News Network is unbeatable. There is no American media outlet more openly devoted to the neocon ideology and more committed to supporting new American wars than Fox News. CNN or MSNBC may sometimes try to emulate it, but their professionalism prevents them from even coming close to Fox News in being biased toward war and in unabashedly promoting U.S. global domination. Fox's propaganda efforts are closely coordinated with other Murdoch-owned print media, such as the Weekly Standard and the New York Post. The Washington Times, which is controlled by the Rev. Sun Myung Moon's Unification Church, the neoconservative New York Sun, and other neocon publications such as the National Review, The New Republic, The American Spectator, the Wall Street Journal, complete the main pro-war propaganda infrastructure.

In conclusion, it is the conjunction of these five pro-war machines, i.e., the bloated military establishment, the large American arms industry, the Neocon pro-war administration with Congress being strongly under the influence of militarist lobbies, the pro-war think tanks network and the pro-war media propagandists that constitutes the framework of the military-industrial complex, of which President Dwight Eisenhower wisely feared the corrosive influence on American society, 45 years ago, in 1961.

Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@ yahoo.com. He is the author of the book 'The New American Empire'. Visit his blog site at www.thenewamericanempire.com/blog.

Frida Berrigan, How the Pentagon Stole the Future

Just this week, the Bush administration is considering making a little futuristic news. The President might soon approve "a major step forward in the building of the country's first new nuclear warhead in nearly two decades," the Reliable Replacement Warhead. If only names were reality...

Critics are already claiming that the new "hybrid" design of the weapon, now planned to come on-line in 2012, will raise safety and other questions (and may someday lead to the resumption of underground nuclear testing). In other words, peering into our nuclear future, it's possible to imagine that -- to the tune of an estimated $100 billion -- the crucial word is likely to be "proliferation."

In fact, the future, as the military sees it, is simply filled to the brim with multibillion dollar American weapons systems of a sort that were once relegated to sci-fi novels for spacey boys. Now, they are the property of spacey generals, strategists, military planners, and corporate CEOs. Just a week ago, the Bush administration presented a supplemental military budget of nearly $100 billion to Congress to cover our ongoing disastrous wars in Iraq and Afghanistan as well as to replace equipment lost or worn out in both. But evidently Air Force officials, in a "feeding frenzy," just couldn't resist slipping in a futuristic ringer -- the funding, according to Jonathan Karp of the Wall Street Journal, for two of Lockheed Martin's F-35 Joint Strike Fighters, a high-tech plane still in development.

By the way, as Richard Cummings points out in a stunning recent piece on Lockheed in Playboy, Dick Cheney's son-in-law, Philip J. Perry, is a registered Lockheed lobbyist and his wife Lynne was on Lockheed's board until he became Vice President. On settling into Washington, George Bush appointed Lockheed's President and CEO Robert J. Stevens to his Commission on the Future of the United States Aerospace Industry. "Albert Smith, Lockheed's executive vice president for integrated systems and solutions, was appointed to the Defense Science Board. Bush had appointed former Lockheed chief operating officer Peter B. Teets as undersecretary of the Air Force and director of the National Reconnaissance Office," and that was just the beginning as the military-industrial revolving door spun wildly and the corporation made money hand over fist.

In November of 2002, Stephen J. Hadley, deputy national security advisor, asked Bruce Jackson to meet with him in the White House. They met in Hadley's office on the ground floor of the West Wing, not far from the offices of Vice President Dick Cheney and then-National Security Advisor Condoleezza Rice. Hadley had an exterior office with windows, an overt indicator of his importance within the West Wing hierarchy.
This was months before Secretary of State Colin Powell would go to the United Nations to make the administration's case for the invasion of Iraq, touting the subsequently discredited evidence of weapons of mass destruction. But according to Jackson, Hadley told him that "they were going to war and were struggling with a rationale" to justify it. Jackson, recalling the meeting, reports that Hadley said they were "still working out" a cause, too, but asked that he, Jackson, "set up something like the Committee on NATO" to come up with a rationale.

Jackson had launched the U.S. Committee on NATO, a nongovernmental pressure group, in 1996 with Hadley on board. The objective of the committee, originally called the U.S. Committee to Expand NATO, was to push for membership in the NATO military alliance for former Soviet bloc countries including Poland, Hungary and the Czech Republic.

What Bruce Jackson came up with for Hadley this time, in 2002, was the Committee for the Liberation of Iraq. The mission statement of the committee says it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations." The pressure group began pushing for regime change -- that is, military action to remove Hussein -- in the usual Washington ways, lobbying members of congress, working the media and throwing money around. The committee's pitch, or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East.

"I didn't see the point about WMDs or an Al Queda connection," Jackson says. In his mind the human rights issue was sufficient to justify a war.

Jackson had long been a proponent of unseating Hussein, and the committee dovetailed with his quite real sense of mission. In addition to his role in the Committee for the Liberation of Iraq and the U.S. Committee on NATO, he had also been president of the Project for Transitional Democracies, organized to "accelerate democratic reform" in Eastern Europe.


Still, there is another way to view Jackson's activities. As The New York Times put it in a 1997 article, "at night Bruce Jackson is president of the U.S. Committee to Expand NATO, giving intimate dinners for senators and foreign officials. By day, he is director of strategic planning for Lockheed Martin Corporation, the world's biggest weapons maker."

BAE's secret $12m payout in African deal


Middleman reveals covert cash for 'unnecessary' Tanzanian radar sale

David Leigh in Dar es Salaam and Rob Evans
Monday January 15, 2007
The Guardian

The UK's biggest arms supplier secretly paid a $12m commission into a Swiss account in a deal which led to Tanzania, one of the world's poorest countries, buying a controversial military radar system.
A Tanzanian middleman, who has a long-standing relationship with military and government figures, has admitted that the sum was covertly moved to a Swiss account by BAE Systems, which is under investigation by the Serious Fraud Office.

The back-door payment represented 30% of the contract value. The east African state had to borrow to finance the deal, which critics said was unnecessary and overpriced.

Tony Blair supported the 2002 sale but former cabinet minister Clare Short says she and the chancellor, Gordon Brown, opposed it.

Quote:

Evidence of the industry's good fortune is reflected in the stocks of major contractors over the last year. At the end of 2005, the Lockheed Martin Corporation, the largest contractor, was trading around $62 a share. Now Lockheed is around $92 a share. Over the last year, Boeing, which holds the No. 2 position, saw its shares rise from about $66 a share to around almost $89 a share. Meanwhile, Raytheon stock has risen from around $39 a share to more than $53 a share in the last year and General Dynamics has gone from the high $50s a share to almost $74 a share over the same period.

A large part of the reason I haven't commented earlier is that the "evidence" here is based on stock value without any proof that the stock's value has changed because of Defense spending.

Lockheed's total revenue from government contracts didn't increase all that much over the period and the raw numbers ignore that Lockheed spent almost $3 billion buying back shares of their own stock. Likewise it ignores that Raytheon divested itself of it's least profitable divisions and that Boeing's stock value increase is due almost entirely to increased sales of civilian aircraft while Airbus has been struggling with engineering problems.

So what exactly does the "evidence" tell us?

So what exactly does the "evidence" tell us?

Is it an important question, in itself? The billions that are being spent out of your treasury are going to those corporations and the many others who market (through sophisticated and pervasive lobbying to government and the Pentagon) their war-related products. Why not ask, if your premises are valid, what those stocks might look like if the war in Iraq had not been initiated?

blatham :
imo one of the best examples of the profitability of war is to be found in the german THYSSENKRUPP corporation (formerly known as : KRUPP and probably germany's largest weapons manufacturer during WW I and II) .

even though much of the infrastructure was destroyed during the war , and other parts were taken away as reparations , krupp - now under the name thyssenkrupp - is again one of germany's largest corporations .

they have now become quite famous for building some of the world's largest and most luxurious "mega-yacht's" . quite an irony imo .
hbg

want to place an order for one of these babies ?
(anonymity guaranteed , i understand)

fishin wrote:

So what exactly does the "evidence" tell us?

The evidence tells us that Blatham spends way too much time at Salon.com... and gives it too much credence... much the same way as the Rush listeners do his screeds.

Blatham; yes, selling war goods during a war is profitable. Water is wet, the sun is hot... and you really must read some less bias sources. :wink:

Is it your contention that Eisenhower and MacArthur had this wrong? Do you honestly consider that there is no problem involved in this matter?

blatham wrote:

Is it your contention that Eisenhower and MacArthur had this wrong? Do you honestly consider that there is no problem involved in this matter?

I don't see how you could have possibly come up with this from anything I've posted in this thread. My one and only contention thusfar has been that the author of the original piece used "evidence" to back their claim that is in no way conclusive nor instructive.