Guest Post: Springtime For The Military-Industrial Complex

Submitted by John Aziz of Azizonomics

Springtime for the Military-Industrial Complex

The FT erroneously concludes that the boom-times are over for the military contractors:

The wars in Afghanistan and Iraq have been a boon to US contractors. The US has used so many of them in the conflicts that at times they outnumbered the military they supported. But the boom times are coming to an end and military service companies in particular are being squeezed.

Moody’s, the rating agency, expects revenue and margin pressure on defence service companies to become visible soon as the US Department of Defence, the world’s biggest military spender, negotiates tougher terms for contractors, reduces spending on them and brings its troops home from Afghanistan in time to meet the end 2014 deadline set by President Barack Obama.

In Iraq and Afghanistan the top contractor was Kellog, Brown & Root, the engineering and construction services company. It earned $40.8bn during the past decade, while Agility, the logistics company, and DynCorp, which specialises in security, earned $9bn and $7.4bn respectively, according to a US government report.

After a decade of unrivalled prosperity thanks to war and a booming global economy the defence service sector will have to work harder through innovation, as well as lean and well-focused management, to prosper.

In a word, nope. What cuts? The Obama budget aims to increase military expenditures far-above their already-puffed-up status quo:

Offering a military budget designed to head off charges that he’s weak on defense, President Obama unveiled a Pentagon spending plan that fails to cut any major procurement programs and calls for spending $36 billion more on the military in 2017 than it will spend this year.

Here’s what Obama intends to increase (and what Romney, of course, intends to increase more):

Yeah, America is spending more today drone-striking American citizens in Yemen, drone-surveilling Mexican drug lords and “turning our attention to the vast potential of the Asia-Pacific region“ than she was during the cold war when a hostile superpower had thousands of nukes pointing at her.

Military contractors have nothing to fear. Whether it is the Pacific buildup to contain Chinese ambition, or drone strikes in the horn of Africa or Pakistan, or the completely-failed drug war, or using the ghost of Kony to establish a toehold in Africa to compete with China for African minerals, or an attempted deposition of Bashar Assad or Egypt’s new Islamist regime, or bombing Iran’s uranium-enrichment facilities, or a conflict over mineral rights in the Arctic, or (as Paul Krugman desires — and what the heck, it’s 2012, why not?) an alien invasion, or a new global conflict arising out of a global economic reset, it’s springtime for the military contractors. It’s everyone else who should be worried.

Comments

[Justaman]

The chart says it all.  Print money to fund the machine.  The world has funded our military complex as borrowing exceeds tax receipts.  Balance sheet and income statement are two different things.  Asia all along has had the plan to control the machine.  Examine the TPP.  Will be a good tussle in the end when the sheeple realize Asia is their master and we try to regain the power that was lost decades ago. 

[blindman]

Eisenhower - Military/Industrial Complex - Part 1 of 2
http://www.youtube.com/watch?v=5pWAGgLSCSQ
.
Military-Industrial Complex Speech, Dwight D. Eisenhower, 1961
http://www.h-net.org/~hst306/documents/indust.html
.
..."A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present

and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientifictechnological elite. " ...

President Eisenhower - Farewell Warning

http://www.youtube.com/watch?v=A_II0H7X5O4&feature=related

[blindman]

19 June 2012
The Secret State and the Tyranny of the Faceless and the Lifeless

“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.

For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.”

Marcus Tullius Cicero "
http://jessescrossroadscafe.blogspot.com/2012/06/secret-state-golem-xiv....

[supersajin]

Alien Invasion!! Maybe some time in late December like the 21st at 11:11am  :)

[dolph9]

Americans, you fight so that:

1)  global banks can continue to rake in trillions of fiat money

2)  oil corporations can continue to produce from the remaining scraps in the Middle East

3)  Israel can be defended against 300 million pissed off Arabs

4)  the federal government can continue to go into unlimited amounts of debt to fund the welfare state

[nah]

our security is their security.... vote mormon

[JeffB]

I loved the YouTube clip someone put in the comments section of the Azinomics page you linked to of Peter Schiff taking apart Krugman for his stupidity. He did a great job.

[Monk]

Don't forget that significant portions of war costs are funded through foreign loans and passed on to sheeple.

[mirac]

There will be an an Alien Invasion.  Look around the net and see all the filmed phenomena.  They ain't here to study us...seriously!

[Clashfan]

I don't dream of a holiday

when hate and war come around.

Hate and war, the only thing

we are today:

http://www.youtube.com/watch?v=1IBMQqDt7p0

[Clashfan]

Got this from Max Keiser. Don't know exactly what I think of Assange or Correa, but it is certainly an interesting, fun interview, certainly relevant to the piece and thread: http://www.youtube.com/watch?v=ZvUwC5JTAJY&feature=player_embedded#!

[JeffB]

Yeah, I thought it was interesting as well.

Thanks for posting it.