Defense Department, Inc.

Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.  This world in arms is not spending money alone.  It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.  This is not a way of life….  Under the clouds of war, it is humanity hanging on a cross of iron.

–Dwight Eisenhower, American Society of Newspaper Editors, 16 April 1953

President Obama called his $3.8-trillion budget a big step in restoring America’s economic health. Last year he promoted TARP, the Troubled Assets Relief Program to bail out the financial sector at a mere $700 billion. Anyone – even billionaire bankers — can make mistakes that wreak ruin on the rest of us!

Obama also declared as “untouchable” the Pentagon budget of $1.5 trillion (including hidden costs in other government branches), which dwarfs the rescue package for the financial oligarchs. Both payouts, however, used the same logic: Congress taking from the have-nots and giving it to the have-mores. Indeed, the economic, political and military potentates depend on the federal budget to transfer taxpayer resources to them.

This evolving military-industrial complex, a partnership of interlocking government and corporate networks, has used public wealth to enrich itself.  The manufacturing part of this complex rarely produces anything people live in, wear, or eat. Despite National Rifle Association claims, armaments do not meet civilian needs.  In fact, there exists a dramatic gulf between a healthy economy and a social order based on military spending.  During the very period (1998-2008) when the US economy’s share of global output dropped from 32 to 23%, the Defense budget doubled. (Loren Thompson, “QDR Can’t Solve Three Biggest Defense Challenges, Lexington Institute, January 28, 2010)

The Defense Department’s eschewal of economic reality finds its counterpart in its disinterest in accountability.  The dramatic admission of this statement of priorities came from Former Defense Secretary Donald Rumsfeld who admitted publicly that that DOD could not find $2.3 trillion.  The money is still missing.  (“The War on Waste: Defense Department Cannot Account for 25% of Funds – $2.3 Trillion, CBS Evening News, January 29, 2002)

Future Defense chiefs won’t face such embarrassment. On May 8, 2009 the GAO informed the House Subcommittee on Government Management that six executive agencies can prohibit audits and investigations by the Inspector General — Defense, Treasury, Federal Reserve Board, Department of Justice, Homeland Security and the Postal Service and the CIA’s infamous and classified “Black budgets.” Accountability has now taken remote second place to “national security.”

Security, however, must include employment, and military industries do create jobs. They also get tax breaks from states competing for their business. But even without tax breaks, many defense corporations choose the patriotic option of overseas tax havens.  A December 2008 GAO report, for example, disclosed that 83% of the largest publicly traded US corporations, doing business for the federal government, sought tax refuge via their foreign subsidiaries.

The bottom-line savvy CFO’s of these companies do not, however, skimp on super-salaried lobbyists. War profiteering, they know, fits hand-in-glove with secured profits from “defense” contracts! Such practices win bi-partisan support and keep well oiled Washington’s ubiquitous revolving doors.
So what’s new? US deficits approach $1.6 trillion per year, and Washington still looks to China and Japan to buy its paper albeit the US already owes them almost as much as this year’s deficit. The US government will pay $250 billion of annual debt interest.

Wars in Afghanistan and Iraq have already sucked up $1 trillion. “Experts” expect these “defensive engagements” to cost an additional $250 billion this year; Obama’s surge of 30,000 more troops in Afghanistan will raise the budget by $30+ billion, slightly more than Germany spends on its annual defense.

Is spending public money Washington’s real “defense”? Unemployment remains officially around 10%, the economy has yet to recover, but the Pentagon prospers. Its budget equals about half of total world military spending.  Ironically, with all its money, DOD still faces a serious manpower shortage. The empire dares not institute another unpopular draft – bad Vietnam War protest memories. Hence, it relies on the poor and on migrants seeking citizenship.

Military service offers poor youngsters possible upward mobility. But not enough of them feel desperate enough to serve. So, the Pentagon hires mercenaries – oops, contractors — who cost more initially but don’t get counted when wounded or dead, and don’t run up future veterans’ costs.  The Pentagon hopes to meet labor shortage challenges through robotics, drones and computers — machines with no ghosts.

The military also depends on “worst case scenario” dreamers, bad news Mandarins who fantasize threats to the empire. 19th century utopians imagined a peaceful industrialized and rational world. The new dystopians create future overseas foreign threats, and search for “foreign Moby Dicks.” (“Novel Politics: Questions for Carlos Fuentes,” Deborah Solomon, NY Times, April 30, 2006)

Their “studies” appear inside special Pentagon offices for analysis. A December 2007 report was called “A Nuclear-Armed Regional Opponent: Is Victory Possible?”; in July 2002, “After Next Nuclear Use.” Other studies have classified titles, but their authors come from (un)think tanks like the Washington-based Hudson Institute, or belong to government consulting firms like Booz Allen Hamilton, or Scitor Corporation and IHS International.

Former Office of Net Assessment director Andrew Marshall epitomizes this breed of horror scenario script writers. People who the late C. Wright Mills called “defense intellectuals” now postulate concurrent, and different, military strategies: nuclear battlefields, star wars, traditional warfare, irregular warfare, virtual warfare, counterinsurgency, foreign internal defense, unconventional warfare, full spectrum dominance, homeland security (somehow different from Defense), stability operation, post warfare security, smart power, soft power, hard power, militarized humanitarian assistance, complex security challenges and “nation building”.

Left critics misunderstood the new strategies when they screamed: “The Iraq War is about oil.” Or the Afghan conflict is about “natural gas pipelines.” As if decisions on going to war depended solely on a few large energy corporations profiting on the trillion plus spent on these wars.

A few right wingers – not liberals — like Pat Buchanan and Congressman Ron Paul dare challenge the empire. “Our situation is unsustainable. The steady expansion of global commitments, as relative national power declines, is a prescription for endless wars and eventual disaster,” wrote Buchanan. “It is my hope that the price in blood, treasure, and humiliation America will eventually be forced to pay for the hubris, arrogance, and folly of our reigning foreign policy elites is not, God forbid, war, defeat, and the diminution of this republic — the fate of every other great nation or empire that set out on this same course.”

After World War II US manufacturing stood as the foundation of economic power. Sixty five years later, manufacturing has become a US expatriate. Successive Administrations have paved the road for gonifs (bankers and investors) to usurp the economy. After manipulating other people’s money for their own profits led to financial collapse two Presidents and Congresses nevertheless bailed them out.

What should be done? Charlie Cray and Lee Drutman call for converting all defense-related companies into publicly-controlled, nonprofit status entities and forbid them to lobby or contribute to campaigns? (Corporations and the Public Purpose: Restoring the Balance, Seattle Journal for Social Justice, Winter 2005) Unlikely!

Obama, however, could propose a National Defense Medicare bill, lodged inside the Pentagon budget. Instead of the Pentagon fighting health care for the lion’s share of the total US budget it would assume health care as just one more task in the unending challenge of defending our besieged nation.

Saul Landau is an Institute for Policy Studies fellow. He is the author of A Bush and Botox World.

Nelson P. Valdes is Professor Emeritus, University of New Mexico.