FacebookTwitterGoogle+RedditEmail

Profits for the Economic Club: How US Military Spending Benefits the Few

In his January 2016 State of the Union Address, President Obama smugly declared that “We spend more on our military than the next eight nations combined,” which was a startling and repulsive boast.  What is less surprising is the Pentagon’s decision to refocus military spending, thus boosting profits for military industry companies.

Then on February 2 Obama’s Defence Secretary Ashton Carter gave a speech on defense affairs at the Economic Club in Washington, which is proud of the fact that it provides “a forum for prominent business and government leaders who have influenced economic and public policy both here and abroad. Members represent over 600 businesses and organizations [in Washington, DC] that are at the forefront of the private sector economy.”

Having no sense of humor, Mr Carter would fail to see the wonderful irony in choosing that location to define his priorities in national military affairs,  but its significance didn’t escape the financial market’s wheeler dealers, and values of defense industry corporations received a hike all round.

In his speech Carter said that “the Pentagon plans to spend about $2 billion over the next five years to buy more Raytheon Company Tomahawk missiles and upgrade their capabilities, bringing the inventory of the missiles to above 4,000.”  At midday on February 2, Raytheon shares stood at 123.47.  By 4 p.m. next day they had increased to 128.07.

After his comforting chat to the Club of “prominent leaders” of military-focused commercial enterprises, Reuters reported that Mr Carter “flew to the Naval Air Weapons Station China Lake in California to get updates on new high-end weapons being developed and tested there, including precision Long Range Anti-Ship Missiles built by Lockheed Martin Corp. He said the [defense] department would spend nearly $1 billion over the next five years to buy the new missiles.”

The effect of the announcement on Lockheed’s shares was intriguing. At 10 a.m. on February 2, just before the Carter statement, they were at 208.87 — and by 2.30 p.m. on February 3 they had gone up to 213.53.   It’s interesting to reflect on who might have made a profit.

As Forbes relates, Mr Carter had been “a consultant to defense contractors and when he went back to the Pentagon in 2009, he had to get a special waiver because of his work for companies like Mitre Corp, and Global Technology Partners, a defense consulting firm. As The Washington Times points out, that background seems to conflict with the president’s pledge to block the revolving A History of the Pakistani Army by Brian Cloughleydoor between federal employees and special-interest groups.” Mr Carter was a Senior Partner in Global Technology, which “is a specialized group of investment professionals who have formed a strategic relationship with DLJ Merchant Banking Partners  to acquire and invest in technology, defense, aerospace and related businesses worldwide.”  What goes around, comes around.

According to the Stockholm International Peace Research Institute (SIPRI), in 2014 (the most recent year for full figures) the US was responsible for 34 per cent of the world’s military spending.  It spent three times as much as China and over seven times as much as Russia.  Certainly, a vast amount of US taxpayers’ money was squandered on the Pentagon’s futile war in Afghanistan, in which the US-NATO military alliance failed to defeat a few thousand raggy-baggy militants; but there is still an awful lot of cash available to buy hugely expensive new equipment of all sorts. As noted with lip-smacking satisfaction by Zacks Equity Research, “Pentagon 2017 Budget Plan Puts Defense Stocks in Focus.”

Given the Pentagon’s withdrawal of troops from Afghanistan (it having been calculated that each of the many thousands of armed forces personnel in that unfortunate country “cost an average of an eye-popping $2.1 million” a year), there should be massive reductions in military expenditure in 2016.  But the drop in Mr Carter’s spending estimate is extremely modest — although it might eventually show that the US will spend only as much as the next five or six countries instead of the next seven or eight.  Perhaps the next President will boast about that in her first State of the Union Speech.

Mr Carter told the Economic Club that “the Pentagon would seek a $582.7 billion budget next year and reshape spending priorities to reflect a new strategic environment marked by Russian assertiveness and the rise of Islamic State.”

“Russian assertiveness”? 

It is Mr Carter’s Pentagon that is indulging in confrontational military “assertiveness” all around the world, in every region and ocean, operating from hundreds of military bases that are thousands of miles away from the borders of the United States.

Mr Carter was reported as saying that “the Pentagon would ask for $3.4 billion to boost military training and exercises aimed at reassuring European countries concerned about Russia, which seized Ukraine’s Crimean peninsula in 2014 and has worried NATO allies with its strategic bomber flights.”

He ignores his own spokesman’s proud declaration that “We conduct B-52 [strategic nuclear bomber] flights in international air space [around China] all the time,” and that the US operation “Polar Growl” of B-52 jaunts is aimed explicitly against Russia in “demonstrating the credible and flexible ability of our strategic bomber force,” and “saw B-52s complete simultaneous,  round-trip sorties from Minot Air Force Base, North Dakota, and Barksdale Air Force Base, Louisiana, to the Arctic and North Sea regions.”

Then President Obama “said the request, a four-fold increase from last year’s $789 million, would enable the United States to strengthen the US military posture in Europe. NATO Secretary-General Jens Stoltenberg called the move a ‘clear sign’ of the US commitment to European security.”

America and its ardently anti-Russian NATO adherents cannot believe — refuse to believe — that Russia has no interest whatever in threatening “European security.”  The US-NATO attitude is ludicrous.  Russia wants to trade with Europe. It wants mutual prosperity.  Russia wants to flourish and thrive, economically and socially.  Its government knows that it can’t achieve this objective for its people if it doesn’t have full, open, mutually beneficial trade with surrounding countries and with all of Europe.

It would be madness for Russia to indulge in military confrontation with its Baltic neighbours, who are important trading partners.  Their economies are bound up with that of Russia, and it makes sense for them — and for Russia — to boost cordial relations.

Russia certainly wanted Crimea to return to Russia — just as almost all Crimean citizens wanted to do.  It is sensible for the territory to remain part of Russia (as it had been for over 150 years) because the vast majority of the inhabitants of Crimea are Russian-speaking,  Russian-cultured and  Russian-educated, and voted (in the opening words of America’s Declaration of Independence) to “dissolve the political bands which have connected them with another” in order to rejoin Russia.  It would be strange if they did not desire accession to a country that not only welcomes their kinship, empathy and loyalty but is economically benevolent concerning their future, unlike Ukraine’s terminally corrupt regime.

In June 2014 President Obama declared that “we will not accept Russia’s occupation of Crimea” but has not said what he intends to do to reverse the popular accession of the Crimean people to Russia.  Does he for one moment imagine that his much-publicized goal of “a Europe that is whole and free and at peace” would be attainable if Crimea were to be wrenched from Russia and handed to Ukraine?  Does he seriously think that if Ukraine took over Crimea there would be any possibility that its inhabitants could, in the words of his own nation’s Declaration of Independence,  enjoy “Life, Liberty and the pursuit of Happiness”? Has Obama thought about what would happen if two million Crimean people, who have made it clear that they do not want to be ruled by Ukraine, were suddenly ordered to accept domination by Ukraine’s corrupt oligarchs?  And who could give such an order?

But Mr Obama’s posturing hardly matters.  Crimea is only an expedient for the war drums to be pounded and for the forces of US-NATO to be given even higher priority in their belligerently confrontational stance against Russia.  Not least,  it is welcome news for the big spenders on military equipment in Washington where members of the Economic Club will be rejoicing in their wealth and ever-increasing profits.  But they and the other warmongers had better be careful : what goes around, comes around.

More articles by:

Brian Cloughley writes about foreign policy and military affairs. He lives in Voutenay sur Cure, France.

November 19, 2018
David Rosen
Amazon Deal: New York Taxpayers Fund World Biggest Sex-Toy Retailer
Sheldon Richman
Art of the Smear: the Israel Lobby Busted
Chad Hanson
Why Trump is Wrong About the California Wildfires
Dean Baker
Will Progressives Ever Think About How We Structure Markets, Instead of Accepting them as Given?
Robert Fisk
We Remember the Great War, While Palestinians Live It
Dave Lindorff
Pelosi’s Deceptive Plan: Blocking any Tax Rise Could Rule Out Medicare-for-All and Bolstering Social Security
Rick Baum
What Can We Expect From the Democrat “Alternative” Given Their Record in California?
Thomas Scott Tucker
Trump, World War I and the Lessons of Poetry
John W. Whitehead
Red Flag Gun Laws
Newton Finn
On Earth, as in Heaven: the Utopianism of Edward Bellamy
Robert Fantina
Shithole Countries: Made in the USA
René Voss
Have Your Say about Ranching in Our Point Reyes National Seashore
Weekend Edition
November 16, 2018
Friday - Sunday
Jonah Raskin
A California Jew in a Time of Anti-Semitism
Andrew Levine
Whither the Melting Pot?
Joshua Frank
Climate Change and Wildfires: The New Western Travesty
Nick Pemberton
The Revolution’s Here, Please Excuse Me While I Laugh
T.J. Coles
Israel Cannot Use Violent Self-Defense While Occupying Gaza
Rob Urie
Nuclear Weapons are a Nightmare Made in America
Paul Street
Barack von Obamenburg, Herr Donald, and Big Capitalist Hypocrisy: On How Fascism Happens
Jeffrey St. Clair
Roaming Charges: Fire is Sweeping Our Very Streets Today
Aidan O'Brien
Ireland’s New President, Other European Fools and the Abyss 
Pete Dolack
“Winners” in Amazon Sweepstakes Sure to be the Losers
Richard Eskow
Amazon, Go Home! Billions for Working People, But Not One Cent For Tribute
Ramzy Baroud
In Breach of Human Rights, Netanyahu Supports the Death Penalty against Palestinians
Brian Terrell
Ending the War in Yemen- Congressional Resolution is Not Enough!
John Laforge
Woolsey Fire Burns Toxic Santa Susana Reactor Site
Ralph Nader
The War Over Words: Republicans Easily Defeat the Democrats
M. G. Piety
Reading Plato in the Time of the Oligarchs
Rafael Correa
Ecuador’s Soft Coup and Political Persecution
Brian Cloughley
Aid Projects Can Work, But Not “Head-Smacking Stupid Ones”
David Swanson
A Tale of Two Marines
Robert Fantina
Democrats and the Mid-Term Elections
Joseph Flatley
The Fascist Creep: How Conspiracy Theories and an Unhinged President Created an Anti-Semitic Terrorist
Joseph Natoli
Twitter: Fast Track to the Id
William Hawes
Baselines for Activism: Brecht’s Stance, the New Science, and Planting Seeds
Bob Wing
Toward Racial Justice and a Third Reconstruction
Ron Jacobs
Hunter S. Thompson: Chronicling the Republic’s Fall
Oscar Gonzalez
Stan Lee and a Barrio Kid
Jack Rasmus
Election 2018 and the Unraveling of America
Sam Pizzigati
The Democrats Won Big, But Will They Go Bold?
Yves Engler
Canada and Saudi Arabia: Friends or Enemies?
Cesar Chelala
Can El Paso be a Model for Healing?
Mike Ferner
The Tragically Misnamed Paris Peace Conference
Barry Lando
Trump’s Enablers: Appalling Parallels
Ariel Dorfman
The Boy Who Taught Me About War and Peace
FacebookTwitterGoogle+RedditEmail