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Special Report:
United States Profiting from War?

A special report prepared by IBON Foundation, an independent research think-tank, on the U.S. military-industrial complex (reposted from IBON Features)

By JENNIFER DEL ROSARIO-MALONZO
IBON Features

U.S. Military-Industrial Complex: Profiting from War (Part 1)

Bush's War on Terrorism Boosts Military-Industrial Complex (Part 2)

Top U.S. Defense Corporations (Sidebar)

On January 17, 1961, in a nationally-televised address delivered four days before John F. Kennedy’s inaugural as president, Dwight Eisenhower spoke about the perils of the unwarranted influence exerted by the “military-industrial complex.”

Four decades have passed and the military-industrial complex, a phrase coined by Eisenhower’s speechwriters Ralph Williams and Malcolm Moos to describe the link between the U.S. military establishment and the arms industry, has survived and gained dominance.

The U.S. war industry flourished during the Cold War, especially in the Reagan weapons-buying spree years. Although weapons procurement eventually did wind down, the U.S. military budget is still bigger than it was when Eisenhower warned about the military-industrial complex in 1961. The U.S. military budget amounts to more than $270 billion per year, which in constant dollars remains near the peacetime Cold War average during the period of intense U.S.-Soviet rivalry (1950 to 1989).

Running out of enemies

Without the rivalry from Russia, where is the threat that justifies spending hundreds of billion dollars every year on war and preparations for war? The Pentagon’s answer is simple: There is no longer one powerful adversary to contend with, but U.S. forces still need to be equipped to fight two major regional conflicts simultaneously against “rogue states” like Iraq and North Korea.

According to Michael Klare, author of Rogue States and Nuclear Outlaws, Colin Powell devised the two-war strategy once he realized that the United States was running out of enemies large enough to justify spending hundreds of billions on the Pentagon every year.

The United States currently spends 19 times more on its military forces than all of the Pentagon’s so-called rogue states Iran, Iraq, Sudan, Libya, Syria, Cuba, and North Korea combined. In fact, the United States and its key allies (NATO, Japan, and South Korea) now account for 62% of total global military spending, up from about 50% in the mid-1980s. In short, despite repeated calls for higher military spending to remedy the alleged readiness crisis facing U.S. forces, the United States and its allies currently account for a much higher share of global military spending than they did at the height of the Reagan military buildup in the mid-1980s.

The bombings of U.S. embassies in Kenya and Tanzania (August 1998), the missile tests by Iran (July 1998) and North Korea (August 1998), the NATO’s air war in Kosovo (launched on March 24, 1999), and the attacks on the World Trade Center and Pentagon (September 11, 2001) make U.S. military buildup appear reasonable, and defense corporations are only too happy to produce more lethal weapons.

Corporate war profiteers

A look at the huge corporations and their sphere of influence in the military establishment and Congress sheds light on how enormous is the power wielded by the arms industry.

At present, Lockheed Martin is considered as the top weapons manufacturer in the United States. Lockheed Martin was created by merging Lockheed with Martin Marietta, Loral Defense, the General Dynamics combat aircraft division, and scores of other military companies to create a $35-billion behemoth that received over $18 billion in Pentagon contracts.

Proof of its power, Lockheed Martin and its allies in the weapons industry have aggressively pushed for favorable treatment from the federal government in the form of special subsidies, lucrative contracts for well-funded weapons systems, and important changes in U.S. policies on arms sales and military technology transfers.

The military merger boom that resulted in an improved military-industrial complex began during the Clinton administration. Then Defense Secretary Les Aspin and Undersecretary of Defense William Perry decided to encourage mergers of defense firms. In a meeting that Lockheed Martin’s Norman Augustine refers to as the “last supper,” Perry bluntly told industry executives that the Pentagon would not be ordering enough ships, planes, and tanks to support the number of major military contractors that had been sustained by the Reagan military buildup.

Funding for weapons procurement, while still high by historical standards, was declining significantly from the humongous levels they had reached during the Reagan years. Hence, the Pentagon budget could no longer support the same number of major defense contractors in the way it did during the Reagan military boom.

Furthermore, the Pentagon was in the process of decelerating production for current-generation systems like the F-16 fighter and the M-1 tank to make room for next-generation systems like the F-22 and the Joint Strike Fighter. Cutting down the overhead by reducing the number of underutilized military factories was the official rationale behind the merger move.

Defense corporations and their allies in Congress fiercely resisted closing weapons production lines. Instead, they retrenched workers even as industry profits were hitting near-record levels and industry executives were earning generous bonuses and huge salaries.

Interlocking interests

The consolidation of the weapons industry has however given arms companies greater leverage over the Pentagon. The Department of Defense has so few options left when it comes to procuring a major weapons system. In 1998, when the Pentagon awarded a $1.6 billion contract for the so-called systems architecture for a National Missile Defense system, the competition pitted Boeing against a partnership called United Missile Defense, a team-up composed of Lockheed Martin, TRW and Raytheon. When Boeing won the contract, TRW and Raytheon immediately switched teams and became major subcontractors for Boeing on the project.

In the area of combat aircraft, Boeing is in partnership with Lockheed Martin on one major system (the Air Force’s F-22 stealth fighter plane) and in competition on another (the next-generation Joint Strike Fighter). These interlocking business relationships create an atmosphere wherein it often makes more sense for the defense mega-corporations to team up and wield their enormous political clout to increase the Pentagon budget.

Political connections are also helpful in ensuring business and creating new markets. Take, for instance, Bechtel’s close relationship with the Central Intelligence Agency (CIA). This connection helped influence overthrows of several foreign governments perceived as unfriendly to American business. It also allowed the company to be at the right place at the right time to take advantage of new business opportunities with puppet regimes.

During the 1950s, the ties between Alan Dulles, the CIA deputy director, and John Simpson, Steve Bechtel’s financial advisor, facilitated the relationship between Bechtel and the CIA. Steve Bechtel served as the CIA’s liaison with the Business Council and a number of organizations directly linked with the CIA. The ties between Bechtel and the CIA led to collaborations in intelligence gathering that helped overthrow Iran’s Mossadeq in 1953 and Indonesia’s Sukarno and replace them with the Reza Shah Pahlavi and Suharto respectively, both pro-U.S., pro-business allies.

Bush’s vision: boosting the military-industrial complex

Long before the so-called anti-terrorism efforts, George W. Bush already planned to boost the position of the U.S. military-industrial complex. On September 23, 1999, Bush delivered his comprehensive defense policy wherein he set three ambitious goals: 1) to renew the bond of trust between the American president and the American military ; 2) to defend the American people against missiles and terror ; and 3) to begin creating the military of the next century.

Bush proposed to invigorate trust by increasing military pay and benefits and by clarifying the mission of U.S. forces to deter and win wars, not to undertake vague, aimless, and endless deployments. The latter phrase supposedly shows the new administration’s reluctance to send U.S. forces on open-ended peacekeeping missions like the deployments in Bosnia and Kosovo. Bush gave few specifics on his second promise but indicated that as president he would make substantial new investments in anti-terrorism efforts and deploy anti-ballistic missile defenses, both theater and national, at the earliest possible date.

He also promised an immediate, comprehensive review of the U.S. military designed to challenge the status quo and to envision a new architecture of American defense for decades to come. Bush urged the replacement of existing programs with new technologies and strategies aimed at creating forces that would be agile, lethal, readily deployable and require a minimum of logistical support.

Defense companies are naturally resisting the idea of abandoning current programs and the military-industrial complex would not allow such thing to happen. While at first creating a ripple of misgiving among defense contractors, Bush’s vision of high-tech defense systems in fact gives the military industry so much to look forward to. Since existing giant corporations, like Lockheed Martin or Raytheon, are the ones that have the technological capacity to pursue such vision, they will be the main beneficiaries of these future programs.

Post 9-11

Although Bush and his top advisers keep on harping that their global campaign against terrorism will be a new kind of war, the largest beneficiaries of the new weapons spending sparked by the September 11 attacks are the big defense contractors like Boeing, Raytheon, Lockheed Martin and Northrop Grumman.

Bulk of the new funding will be channeled to longstanding pet projects of the military-industrial complex and not to finance anti-terrorism equipment or techniques. According to analysts, renewed Pentagon spending will only benefit existing systems, many of which were designed during the Cold War and have little or nothing to do with the fight against terrorism.

The weapons industry’s main agenda of recent years - a massive, across-the-board increase in military spending - has taken a giant leap forward after September 11. Within days of the attacks, Congress signed off on a $40-billion package for reconstruction and anti-terrorism efforts. Secretary of Defense Donald Rumsfeld compared the war on terrorism with the Cold War, and a $400-billion military budget is in the offing. Increased military activities are also expected to invigorate the U.S. economy since more weapons projects mean more orders for the manufacturing sector.

U.S. as ‘Globocop’

Beyond corporate and institutional pressure for perennially high military spending, there is also a strategic rationale the idea that the United States should retain the capability to serve as some kind of Globocop. The United States has taken upon itself the task of maintaining order and stability, especially in the perpetuation of free markets.

The United States is already providing military assistance and special operations advisors to the Philippines in the war against the Abu Sayyaf group, which Washington says has links with Osama bin Laden. In Yemen where Bin Laden allegedly ordered the attack on the USS Cole that left 17 American sailors killed in 2000, Yemeni Special Forces, U.S.-trained and armed with tanks, helicopters and artillery, attacked a local Al Qaeda organization. Other potential targets include Somalia, which is accused of hosting terrorists, and Iraq, which is accused of developing weapons of mass destruction.

Global force projection remains the focus of Pentagon’s strategy and budget. In places where there are critical resources or potential U.S. investments at risk, such as the Persian Gulf and the oil-and-gas-rich Central Asia, the Pentagon is preoccupied with providing weapons and training, arranging access to bases, and prepositioning troops and equipment in preparation for a possible military intervention at any time.

Meanwhile, war and war preparation mean more profits for U.S. defense contractors. These companies expand, hire more workers, embark on more projects, and help prop up the U.S. economy. But as the U.S. military-industrial complex grows, so does the danger of unprecedented annihilation of innocent people. (Reposted from IBON Features) Bulatlat.com

U.S. Military-Industrial Complex: Profiting from War (Part 1)

Bush's War on Terrorism Boosts Military-Industrial Complex (Part 2)

Top U.S. Defense Corporations (Sidebar)

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