Defense contractors: Russian bogeyman is great for our business

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On January 17, 1961, in his farewell address as the 34th President of the United States, former General and WWII Supreme Allied Commander in Europe Dwight D. Eisenhower sounded this warning:

“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 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 alone more than the net income of all United States corporations.
Now 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 Statehouse, 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 military-industrial 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.

The military–industrial complex is an informal alliance between a nation’s military and the arms industry which supplies it. Together, the complex operates as a vested interest that exerts a powerful influence on public policy.

The worst thing to happen to the military-industrial complex was the end of the Cold War when the Soviet Union imploded.
Have you wondered, as I have, why the Democrats insist on the Russian-Trump collusion story, why the FBI and Special Counsel Robert Mueller continue their witch-hunt, and why the Republicans can’t seem to put an end to the witch-hunt despite having a majority in both houses of Congress?
Here’s the answer.
Lee Fang writes for The Intercept on August 19, 2016:

The escalating anti-Russian rhetoric in the U.S. presidential campaign comes in the midst of a major push by military contractors to position Moscow as a potent enemy that must be countered with a drastic increase in military spending by NATO countries.
Weapon makers have told investors that they are relying on tensions with Russia to fuel new business in the wake of Russian’s annexation of Crimea and modest increases in its military budget.
In particular, the arms industry — both directly and through its arsenal of hired-gun, think-tank experts and lobbyists – is actively pressuring NATO member nations to hike defense spending in line with the NATO goal for member states to spend at least 2 percent of gross domestic product on defense.
Retired Army Gen. Richard Cody, a vice president at L-3 Communications, the seventh largest U.S. defense contractorexplained to shareholders in December that the industry was faced with a historic opportunity. Following the end of the Cold War, Cody said, peace had “pretty much broken out all over the world,” with Russia in decline and NATO nations celebrating. “The Wall came down,” he said, and “all defense budgets went south.”


Note: General Richard A. Cody, 67, was the 31st Vice Chief of the Staff of the U.S. Army (June 2004 to July 2008). He retired from the Army on in August 2008 and joined defense and aerospace contractor L3 Technologies as Senior Vice President of Washington Operations. Founded in 1997 and headquartered in Manhattan, L3 Technologies is one of the top ten U.S. government contractors.

Now, Cody argued, Russia “is resurgent” around the world, putting pressure on U.S. allies. “Nations that belong to NATO are supposed to spend 2 percent of their GDP on defense,” he said, according to a transcript of his remarks. “We know that uptick is coming and so we postured ourselves for it.
Speaking to investors at a conference hosted by Credit Suisse in June, Stuart Bradie, the chief executive of KBR, a military contractor, discussed “opportunities in Europe,” highlighting the increase in defense spending by NATO countries in response to “what’s happening with Russia and the Ukraine.”
The National Defense Industrial Association, a lobby group for the industry, has called on Congress to make it easier for U.S. contractors to sell arms abroad to allies in response to the threat from Russia. Recent articles in National Defense, NDIA’s magazine, discuss the need for NATO allies to boost maritime military spending, spending on Arctic systems, and missile defense, to counter Russia.
Many experts are unconvinced that Russia poses a direct military threat. The Soviet Union’s military once stood at over 4 million soldiers, but today Russia has less than 1 million. NATO’s combined military budget vastly outranks Russia’s — with the U.S. alone outspending Russia on its military by $609 billion to less than $85 billion.
And yet, the Aerospace Industries Association, a lobby group for Lockheed Martin, Textron, Raytheon, and other defense contractors, argued in February that the Pentagon is not spending enough to counter “Russian aggression on NATO’s doorstep.”
Think tanks with major funding from defense contractors, including the Lexington Institute and the Atlantic Council, have similarly demanded higher defense spending to counter Russia.

Note: Hadley is a member of the Council on Foreign Relations.

Stephen Hadley, the former National Security Advisor to President George W. Bush now serving on the board of Raytheon, a firm competing for major NATO military contracts, has argued forcefully for hiking defense budgets and providing lethal aid to Ukraine. Hadley said in a speech last summer that the U.S. must “raise the cost for what Russia is doing in Ukraine,” adding that “even President Putin is sensitive to body bags.”
The business press has noticed the development. The Washington Business Journal noted that “if anyone is benefiting from the unease between Russia and the rest of the world, it would have to be Bethesda-based Lockheed Martin Corp,” noting that the firm won a major contract from Poland, which is revamping its military in response to Russia. Roman Schweizer, an analyst for the defense industry with Guggenheim Securities, predicted last year that U.S. arms sales would continue to rise, particularly because “eastern NATO countries will increase procurements in the wake of continued Russian activity in Ukraine.”
At the Defence Security Exposition International, an arms dealer conference held in London last fall, contractors were quick to use Russia and rising defense budgets to hawk their products. “The tank threat is … much, much more closer to you today because Putin is doing something” in eastern Ukraine, a shoulder-fired-rocket touting representative from Saab told Defense One.
“Companies like Lockheed Martin and Boeing have pledged to increase the share of exports in their overall revenues, and they have been seeking major deals in East and Central Europe since the 1990s, when NATO expansion began,” said William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung noted that as some nations ramp up spending, U.S. firms will be “knocking at the door, looking to sell everything from fighter planes to missile defense systems.”
“Russian saber-rattling has additional benefits for weapons makers because it has become a standard part of the argument for higher Pentagon spending — even though the Pentagon already has more than enough money to address any actual threat to the United States,” he said.

The Bipartisan Budget Act of 2018, aka the much-touted GOP budget deal, has no funding to construct the US-Mexico wall, but increases defensediscretionary funding cap by $80 billion in FY2018 and $85 billion in FY 2019, as well as an additional $160 billion in uncapped funding for overseas military and State Department operations. In fact, the GOP budget deal increases military funding even more than than the already large sums that President Trump had requested in his 2018 budget proposal.
Altogether, the budget deal increases federal spending by more than $500 billion, further inflating, instead of reducing, America’s national debt — which now stands at $20.76 TRILLION.
So much for the Republican Party being a party of fiscal conservatism and smaller government.
~Eowyn

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