Saturday, November 17, 2012

The targeted killing of suspects by the United States is slowly and quietly becoming institutionalized as a permanent feature of the US counterterrorism strategy. Unless members of Congress begin to push back, such killings will continue – without any oversight, transparency or accountability. Victims of drone strikes – including US citizens – are secretly stripped of their right to due process and are arbitrarily deprived of their life, in violation of international human rights law.


November 17, 2012 by The Guardian

Obama Administration Must Account to Congress
for Targeted Assassinations

The White House will not even release the
legal advice about its drone kill policy.
The American people needs full oversight

by Dennis Kucinich


According to news reports, President Obama maintains a list of alleged militants to be assassinated. Some are US citizens. None will get to plead his case. The president tells us to trust that this is all perfectly legal and constitutional, even though Congress is not allowed to see any legal justification. The weapon of choice in these assassinations: remote-controlled planes called drones.The use of drones in Pakistan has inflamed anti-American sentiment in the region. (Photograph: Mk Chaudhry/EPA)

The targeted killing of suspects by the United States is slowly and quietly becoming institutionalized as a permanent feature of the US counterterrorism strategy. Unless members of Congress begin to push back, such killings will continue – without any oversight, transparency or accountability. Victims of drone strikes – including US citizens – are secretly stripped of their right to due process and are arbitrarily deprived of their life, in violation of international human rights law.

The attempted characterization of drones as a precise weapon is irrelevant and chilling because it values the alleged high-tech efficiency of the killing above the rule of law. Drones are a weapon that must be subject to the same constraints and laws as every other weapon employed by the US government. As the authors of a recent groundbreaking report by Stanford and New York Universities on drones in Pakistan powerfully stated:

"In the United States, the dominant narrative about the use of drones in Pakistan is of a surgically precise and effective tool that makes the US safer by enabling 'targeted killing' of terrorists, with minimal downsides of collateral impacts. This narrative is false."

Four years into the Obama administration's vast expansion of the program, members of Congress and the public are still being denied access to internal legal memos, which purportedly serve as the basis of the legal justification for such killings. More than a decade after 9/11, even people in support of the program recognize its risks. A former Central Intelligence Agency (CIA) analyst and adviser to the administration likened the policy to mowing the lawn:

"You've got to mow the lawn all the time. The minute you stop mowing, the grass is going to grow back."

In other words, the perceived short-term benefits may be obscuring significant long-term costs.

These strikes do not occur in a vacuum. They have very real consequences for our long-term national security. In Pakistan, they have fueled significant anti-American sentiment and serve as a powerful recruitment tool for terrorists. According to some estimates, our drone strikes have resulted in the death and injury of thousands of innocent civilians. Despite repeated claims that such drone strikes are vital to ensuring our safety, the number of "high-level" targets killed as a percentage of total casualties is extremely low – estimated at just 2%.

The world is now our battlefield. Our credibility as a voice for human rights has been undermined. A dangerous precedent has been set for all nations.

All US government officials, including the president, want to ensure the safety of the United States. At the same time, we have a responsibility to the American people to ensure that programs being conducted in our name are done with at least a minimum of transparency and accountability. We have a responsibility to re-evaluate these policies if there is any indication that they could be harmful to us in the long run.

Regardless of where one stands on the efficiency of the United States' use of drone strikes as a cornerstone of its counterterrorism strategy, we can all agree that Congress must fully exercise its oversight powers to ensure that the program is being conducted in accordance with the law. This means examining what civilian protection measures – if any – the CIA and the Joint Special Operations Command (JSOC) use when conducting drone strikes; requiring the administration to make available its legal justification for such strikes; and evaluating the strategic value of this program in comparison to other available counterterrorism tools.

We must reject the notion that Congress and the American people have to be kept in the dark when it comes to modern warfare. We must begin with a full and robust debate on the ramifications of these policies. We must insist upon full accountability and transparency.

© 2012 Guardian News and Media Limited

Dennis Kucinich is US Congressman from Ohio and a
former presidential candidate in the United States.



Top 100 Fastest-Growing Careers (U.S.)

Career                                                                  %Growth thru 2016       Annual Job Openings (1,000's)
Personal and home care aides                                            51                           255
Nursing, psychiatric, and home health aides                        28                           554
Customer Services Reps                                                    25                           601
Registered Nurses                                                              23                           233
Computer Software Engineers                                            38                             92
Medical Assistants                                                             35                             93
Teachers - post-secondary                                                23                           237
Social and Human Service Assistants                                  34                            80
Child Care Workers                                                          18                           472
Counter and Rental Clerks                                                  23                          124

Bill and Account Collectors                                                23                           119
Computer Scientists and Database Administrators               30                             61
Counselors                                                                         21                           143
Computer Suystems Analysts                                              29                             63
Grounds Maintenance Workers                                           18                           351
Management Analysts                                                          22                           126
Receptionists and Information Clerks                                  17                           334
Pharmacy Technicians                                                          32                             55
Security Guards and gaming surveillance officers                  17                          224
Financial Analysts and Personal Financial Advisors              37                             46

Teachers-Self-Enrichment Education                                   23                             64
Computer Support Specialists and Systems Administrators  18                           134
Social Workers                                                                   22                             77
Fitness Workers                                                                  27                             51
Accountants and Auditors                                                    14                           134
Building Cleaning Workers                                                   14                           885
Food and Beverage Serving and Related Workers                13                         2,734
Human Resources, Training / Labor-Relations Mgr/Spc        16                             158
Securities Commodities and financial Service Sales Agts        25                              48
Retail Salespersons                                                               12                         1,367

Office Clerks, General                                                          13                            766
Hotel, Motel and Resort Desk Clerks                                    17                             76
Teachers-Preschool, KinderG, Elementary, Middle, 2ndary    12                           465
Bookkeeping, Accounting and Auditing Clerks                       12                           287
Dental Assts                                                                          29                             29
Tellers                                                                                   13                            146
Market and Survey Researchers                                            20                              50
Chefs, Cooks, and Food Prep workers                                 11                             883
Automotive Service Techs and Mechanics                             14                               97
Barbers, Cosmetologists + other appearance personnel          14                            100

Correctional officers                                                              16                              63
Animal care and service workers                                           19                              43
Public Relations Specialists                                                    18                              51
Veterinary Technologists and Technicians                              41                              15
Construction Laborers                                                          11                              257
Licensed practical and Licensed Vocational Nurses               14                                71
Athletes, coaches, umpires and related workers                     15                                60
Cost estimators                                                                     19                                38
Advertising Sales Agents                                                       20                                29
Medical Records and Health Information Technicians            18                                39

Gaming Services Occupations                                               23                                22
Paralegals and Legal Assistants                                             22                                23
Demonstrators, Product Promoters, and Models                   18                               33
Instructional Coordinators                                                     22                               21
Surveyors, Cartographers, Photogrammetrists,
    & Surveying and mapping technicians                                21                               25
Insurance Sales Agents                                                         13                               64
Property, Real Estate and Communita Assoc Mgrs                15                               50
Teacher Assistants                                                                10                              194
Construction Managers                                                         16                                44
Health Educators                                                                   26                               14

Carpenters                                                                            10                              223
Surgical Technologists                                                           24                                15
Recreation Workers                                                              13                                61
Painters and Paperhangers                                                     11                             103
Secretaries and Administrative Assistants                                 9                              574
Physical Therapists                                                                27                                12
Maintenance and repair workers - general                              10                              166
Financial Managers                                                                13                                58
Teachers - special ed                                                             15                                39
Medical and ealth Services Managers                                     16                               32

Advert, Mkting, Promos, Public Relations & Sales Mgrs         12                               65
Dental Hygienists                                                                    30                               10
Sales Reps - wholesale and manufacturing                                9                               200
Computer and INformation Systems Managers                       16                                31
Emergency Medical Technicians and Paramedics                     19                               20
Pharamacists                                                                           22                               16
Physical Therapist Assistants and Aides                                   29                               10
Trucker drivers and drivers/sales workers                                 8                              491
Engineers                                                                                11                               93
Roofers                                                                                   14                              39

Education Administrators                                                         12                              56
Real Estate Brokers and Sales Agents                                      11                              80
Science Technicians                                                                 12                              57
Artists and related workers                                                      16                              30
Physicians and Surgeons                                                          14                              38
Police and Detectives                                                               11                              63
Bus Drivers                                                                              10                              87
Loan Officers                                                                           11                              54
Pipe layers, plumbers, pipefitters, & steamfitters                       10                               78
Automotive body and related repairers                                     12                               41

Taxi drivers and chauffeurs                                                       13                               36
Environmental Scientists and hydrologists                                  25                                 8
Physician Assistants                                                                  27                                 7
Construction and Building Inspectors                                         18                              13
Food processing occupations                                                      8                             115
Medical Scientists                                                                     20                               11
Brokerage clerks                                                                      20                                11
Occupational therapists                                                             23                                 8
Lawyers                                                                                   11                                49
Sales Worker Supervisors                                                          4                               270

SOURCE:  100 Fastest-Growing Careers,  10th edition
by Michael Farr

Despite his campaign-trail populism, the president will continue the politics of accommodation to conservatives. Two of the three priorities he has set out for his next term are at the top of the GOP agenda: a “grand bargain” to cut government spending over the next 10 years and corporate tax reform that would cut rates—don’t hold your breath—and close loopholes.

November 16, 2012
by Economic Policy Institute
Election Over, Time For Progressive Dems
to Face the Truth

by Jeff Faux


Terrorized by the prospect of a complete takeover of the U.S. government by right-wing reactionaries—progressive Democrats swallowed their unhappiness with Barack Obama throughout the campaign. They gamely defended his policies on the economy, health care, budget priorities and other issues on which they felt betrayed in his first term.

We’ve now dodged the bullet of a Mitt Romney White House, so let’s get back to reality. Despite his campaign-trail populism, the president will continue the politics of accommodation to conservatives. Two of the three priorities he has set out for his next term are at the top of the GOP agenda: a “grand bargain” to cut government spending over the next 10 years and corporate tax reform that would cut rates—don’t hold your breath—and close loopholes. The third priority, rationalizing immigration law, is one of the few progressive ideas that also has the support of the Chamber of Commerce and the Business Roundtable.

Moreover, his next term’s policy advisers will be the same—or come from the same Washington/Wall Street executive personnel pool—as his last term’s advisers. Indeed, from the White House perspective, the election vindicated their first-term performance.

The core organizations of the Democratic base have vowed that after the election they will hold Obama’s “feet to the fire” with a Tea Party-style mobilization from the left—forcing votes on progressive proposals, organizing mass rallies and grooming their own candidates for the next congressional elections. They’ve sworn these oaths before, but after each election, they persuade themselves to give the leadership another chance. Soon the next election is upon them, and they line up for their marching orders.

If this time is to be different, progressive Democrats must start mobilizing their own agenda now. And the first step is to face the truth about the record of the president we have just re-elected. Here’s an initial reality check:

1. The economy still sucks

Three years into the recovery, we have an official unemployment rate of just under 8 percent and an underemployment rate of almost 15 percent. Incomes are declining and at least 12 million homeowners have mortgages that exceed the value of their houses. Consumers aren’t spending and therefore business is not investing. And we are still running a huge trade deficit with a sluggish global economy. This leaves government as the only possible source of substantial new spending to create jobs.

Yet there is no jobs program. President Obama says his top priority is a deal with House Republicans to reduce the deficit by $4 trillion over the next 10 years. His “liberal” position starts with a ratio of spending cuts to tax increases of 2.5-to-1. The only real dispute between the president and Republicans is whether the rich will have to give back the tax breaks George W. Bush gave them. So when the eventual deal is struck, the federal government will be taking more out of the economy over the next decade than it is putting in. This virtually guarantees that—even if we escape another recession or financial meltdown—we will not reach anywhere near full employment in the next four years.


2. The low-wage future

With no new substantial source of stimulus, our trajectory is toward a further erosion of living standards for the majority of Americans. Off-shoring and automation will continue to shed jobs with no offsetting increase in the demand for labor. Budget cuts—including cuts to Medicare and Medicaid—will widen the holes in the social safety net and further limit investments in education, infrastructure and technology upon which any chance at future prosperity depends. And the White House’s indifference to the dramatic erosion of organized labor (e.g., its reneging on promises to reduce the barriers to organizing) will continue to undercut the bargaining power of all workers—union and non-union alike.

The president’s Council of Economic Advisers will not admit it, but their default strategy for growth is to let American wages drop far enough to undercut foreign competition. That is the only possible policy rationale for Obama’s enthusiasm for the Trans Pacific Partnership, a further deregulation of trade that will strip away the last protections for American workers against a brutal global marketplace of dog-eat-dog.

3. Obamacare: Health care dead-end

The Patient Protection and Affordable Care Act was a victory for corporate America. In exchange for giving up their rules against covering pre-existing conditions and agreeing to raise the age limit in which children could be covered under their parents’ policy, the health insurance corporations got the federal government to require every citizen to buy their product and commit to subsidizing those that can’t afford the price. The pharmaceutical industry received even stronger government protection of their price-gouging monopolies. The Congressional Budget Office estimates that there will still be 30 million uninsured Americans by the end of the decade. Tens of millions more will be under-insured as the companies are free to raise their premiums and deductibles.

Although it abandoned the public option, the White House whispers to Democrats that Obamacare will pave the way for single-payer. Fat chance. The bill was inspired by the right-wing Heritage Foundation and largely drafted by a former insurance company executive precisely to stop single-payer from ever happening. Meanwhile, the corporate dominated health care system will continue to be a huge drag on our global competitiveness and long-term fiscal health.

4. The Dodd-Frank fig leaf

The Wall Street Reform Act required more transparency in the securities markets and marginally expanded the regulatory bureaucracy. But it did little to prevent a future return to the reckless speculation that exploded the economy four years ago. The largest companies now have a bigger share of the financial markets than they had in 2008 and their “too-big-to-fail safety net” is even more explicit.

Perhaps most important, nothing has been done to lengthen the horizons of U.S. investors from short-term, get-rich-quick financial speculation to the long-term investment in producing things and high-value services in America.

5. Big Money and the Democrats

The last four years have proven conclusively that corporations—especially from Wall Street—now dominate the most important economic policy decisions of the Democratic Party. With the Supreme Court decision on Citizens United, the transformation from democracy to plutocracy is virtually complete. The corruption of our governing class goes beyond just campaign contributions. It can include the hint of a future job or lobbyist contract when you leave office, a hedge fund internship for your daughter, a stock market tip. But all this depends on your remaining in power, so nothing matches the importance of raising enough money to get yourself reelected.

Democratic leaders’ primary response to Citizens United has been a tepid proposal to require more transparency in campaign contributions. Even that, of course, could not succeed against Republican, and some Democratic, opposition. But even areas where the president could act alone—as with an executive order requiring government contractors to disclose political contributions or even filling vacant seats on the Federal Election Commission—Obama took a pass. In response to an interviewer’s question in August, he said that “in the longer term” we may need a constitutional amendment to undo Citizens United. He is right. But the “longer term” certainly means sometime after he leaves office.



According to the White House, discontent on the left with these and other issues (e.g., climate change, civil liberties, military spending) represents little more than the carping of left-wing purists who don’t understand the need for compromise. But in fact, it reflects the harsh reality that the president’s intentions do not nearly reach to the level of the country’s serious problems. So the stakes for the nation are enormous. Without a radical shift away from the policies of the last four years, living standards of most people in the United States will continue to drop, with potentially ugly social and political consequences.



The stakes for Democrats are also high. Obama’s victory has reinforced the widespread notion among pundits that the projected future increase in the non-white voting population and the party’s advantage with women already makes it the favorite for 2016 and beyond. But it is precisely these constituencies that economic stagnation has hit the hardest. Whatever the demographic changes, if the Democratic Party produces another four years like the last four, it can kiss goodbye to the next election and probably several after that.



© 2012 Economic Policy Institute

Jeff Faux was the founding president of and now a current distinguished fellow at the Economic Policy Institute



Friday, November 16, 2012

Most contemporary economists still think of military spending in Keynesian terms as being a general economic stimulus and job creator. But Military Keynesianism, if it ever worked, is certainly not working in the 21st Century.

Weekend Edition November 16-18, 2012


Will Military-Industrial-Congressional Complex
Heave the Middle Class Off the Fiscal Cliff?

America’s Defense Dependency

by FRANKLIN C. SPINNEY


The essay — America the Third World Nation in Just 4 Easy Steps, (Truthout, 10 Nov 2012) — describes how our political addiction to the free-trade ideology of neoliberal economics has helped to de-industrialize America and thereby impoverish much of the American middle class. My 24 Sept essay in Counterpunch describing decline of manufacturing employment gives you a sense of the mind-boggling magnitude of what has happened. While “4 Easy Steps” makes passing references to the increasing dependence of the manufacturing sector on military spending, as well as the financialization of economy (but not the latter’s siamese-twin ‘managerialism’), the authors did not develop these points. Without implying any criticism of their excellent essay, my aim today is to tweak your interest in these omissions, particularly America’s defense dependency.

The late Professor Seymour Melman (Columbia Univ.) wrote a prescient book, Profits Without Production (Knopf, 1983) that explained how the militarization and managerialization of our economy were becoming the central causes of the decline in America’s manufacturing competitiveness. This decline started in the 1970s, but Melman showed how it grew out of seeds planted by the permanent military mobilization of a huge defense industry in the 1950s.

The permanent war economy was born on 30 September 1950. On that day, President Truman officially signed NSC-68, a document that became the blueprint for the containment strategy for waging the Cold War. Central to this strategy was the establishment of a large, permanently mobilized defense manufacturing sector. The authors of NSC-68 justified the permanent mobilization, in part, with an economic rationalization reflecting their contention that the WWII production miracle proved the multiplier effects of Military Keynesianism. They suggested these benefits were likely to repeat themselves. In their words: “the economic effects of the [NSC-68] program might be to increase the gross national product by more than the amount being absorbed for additional military and foreign assistance purposes.”

The post WWII economic boom in the US (note: our competitive performance was aided in part by the lingering effects of the WWII damage to the US’s other major industrial competitors) hid the adverse economic effects of the economic diversion attending to the permanent war economy unleashed by NSC-68. Nevertheless, by early 1961, the accumulating economic and political damage caused by the diversion concerned some insiders: President Eisenhower famously warned the nation about the rise of misplaced power posed by the rise of a large permanent standing arms industry, which he said pointedly was new in our national experience.

The accumulating damage wrought by the permanent war economy started to accelerate in the 1970s, and by 1980, the cancer metastasized: militarization and managerialization began to openly thrive and grow at the expense of the traditional high-wage manufacturing sector, in effect, siphoning off money flows via a combination of government handouts and favorable tax treatment that in effect rewarded both the looting of the tax base and the draining of competitiveness and ingenuity from the civilian manufacturing sector (via the increased defense subsidy, leveraged buyouts, offshoring of jobs, emphasizing short-term focus to pump stock prices, etc.) The combined results of the growing defense dependency, managerialization, and financialization was a decreasing international competitiveness in the manufacturing sector. At the same time, our global competitors were increasing their competitiveness. The net effect can be seen in the US merchandize trade deficit; it went into free fall after 1980.

Those who believe that subsidized defense technologies spill over into the commercial sector to improve international competitiveness might want to consider the obvious fact that the huge increases in the defense spending between 1977 and 1987 and 1998 and 2012 clearly did nothing to ameliorate the free fall.

In America, this political-economic evolution has created a weird political situation where a peculiar political darwinism (taking the form of a corporatist alliance of big business and the federal government) co-exists with the neo-liberal ideology of social darwinism. The former stresses mutual dependency and government subsidies for survival while the latter stresses individuality and survival of the fittest in a Hobbesian Universe. Yet the contradiction between the two modes of belief does not impede the ideologues from promoting both simultaneously, and in so doing, continue the looting and draining operations.

That cognitive dissonance is now poised to grow much worse in the next few months, if as is likely, the threat of a budget sequester induces the government to impose neoliberal austerity economics on the middle class, while government becomes more imbedded with and protects the banksters, the defense contractors, and its other corporatist allies. That is because the only way to practice America’s peculiar mix of social and political darwinism at the same time is to fling what is left of the middle class off the fiscal cliff by defunding social security, medicare, infrastructure modernization, education, etc.

Much has been written on the economic distortions created by the financialization of the economy, but aside from Melman’s pioneering work, little has been written on economic distortions created by the increasing dependency of the manufacturing sector on military spending — which is really a huge government subsidy – and the rise of managerialism, financialization’s deadly siamese twin. Both sets of distortions exist side by side with, but in sharp contrast to, the ideological neoliberal fantasies of a free market.

The attached graphic provides a hint — but only a hint — of how the hidden distortions that have been insensibly creeping into the economy: the graphic illustrates how rates of growth in the industrial shipments of military durable goods increased at a much faster rate than shipments of nonmilitary durable goods since 2000.

This difference in growth rates reflects the accumulating effects of the huge increases in the defense budget that began in 1998. These differences have worked to increase the disproportionate large share of the de-industrializing manufacturing economy that has been soaked up by the defense industry over time. For example, defense spending (base budget + war costs) in 2011-12 amounted to about 4.4% of the GDP. About one-quarter of this spending was applied to the salaries of military and civil servants. That implies the other three-quarters or about 3.3 percent of GDP was spent on defense goods and services in the private sector. Yet this 3.3 percent of GDP spent on defense goods and services soaked up 11 to 12 percent of America’s total capital goods shipments over the last two years.

There are other indicators of the economic distortion caused by the defense dependency: For example, fifty-five percent of the federal R&D budget is now allocated to defense-related activities. In the early to mid 1990s, nationwide employment of scientists and engineers in the defense sector soaked up about 30 percent of the total scientific and engineering talent (public and private sectors). Given the rapid growth in the defense budget and the decline in the manufacturing share of GDP since then, the ratio is likely to be even higher today. Unfortunately, there is little current academic research aimed at understanding the size and meaning of these hugely important preemptions of resources, production capabilities, and human skills.

Indeed, most contemporary economists, like the authors of NSC-68, still think of military spending in Keynesian terms as being a general economic stimulus and job creator. But Military Keynesianism, if it ever worked, is certainly not working in the 21st Century.

To wit: the largest sustained increases in the defense budget since the end of WWII began in 1998, but this spending binge was accompanied by (1) a sluggish recovery from the March-November 2001 recession to the onset of the Great Recession that began in late 2008 and its even more sluggish recovery; (2) an acceleration in the rate of decline of employment in the manufacturing sector after 1998 (see Figure 2 here); and (3) the unprecedented plummeting of the merchandise trade balance (discussed earlier). There is also academic research suggesting defense spending is one of the least effective way to create jobs via the ‘Keynesian multipliers’ flowing out of government expenditures (see this Univ. Mass study, for example).

Nevertheless, lest you think the NSC-68′s faith in Military Keynesianism is forgotten ancient history, President Bush was still spouting its soothing nostrums as recently as February 2008, when he told NBC’s Ann Curry, “I think actually, the spending on the war might help with jobs. … because we’re buying equipment, and people are working. I think this economy is down because we built too many houses.”

Defense companies now make up a very substantial part of America’s much diminished industrial base — and these giant defense companies are hooked on the narcotic of defense spending.

That is to say, defense manufacturers cannot survive without the defense subsidy. Since the end of the Viet Nam War, many have tried to convert some of their efforts to competitive production of non-defense goods, and most have failed. One of the most spectacular flops being Grumman’s attempted diversification into hi-tech flexible buses for New York City’s Metropolitan Transportation Authority. The buses had to be withdrawn from service after only three years, because they broke down repeatedly. As Melman explained in the early 1980s, defense companies simply do not have the marketing, managing, engineering, and manufacturing skills to compete successfully in global commercial markets; and when their business practices spill over into the private sector, they often hurt competitiveness and productivity.*

By 1990, even the industrial leaders in the Military-Industrial-Congressional Complex (MICC) fully understood Melman’s point. No less an authority than William Anders, CEO of General Dynamics publicly admitted to the truth of Melman’s argument in 1991, when he explained the reasons for the high failure rate in excursions into competitive commercial markets. Anders said (pg. 13),

“This isn’t surprising. Defense industry management teams generally have little commercial experience and market savvy. Most have been ‘cost plus’ and ‘mil spec’ trained. In short, most don’t bring a competitive advantage to non-defense businesses. Frankly, sword makers don’t make good and affordable plowshares.”

That, in a nutshell, is why Grumman could not make reliable and affordable buses. That is why the private sector made the internet affordable, reliable, and easy to use, not the DoD which invented it. For interested reader, the essay Why Boeing is Imploding provides a stunning example of how the defense-related engineering and production practices (in this case, political engineering or the practice spreading subcontracts around to build political support for a program) have spilled over to infect Boeing’s civilian production practices.

One thing Anders did not mention is that the defense industry is very skilled in lobbying the federal government to increase the public subsidy for making its increasingly unaffordable weapons. Nor did he mention that you buy what you subsidize. In a ‘cost-plus,’ ‘mil-spec’ed,’ single-buyer economy, you subsidize cost growth, so you ‘buy’ costs — the cost overruns in the hugely expensive F-35 Joint Strike Fighter being an outstanding current example (here is just one example in the F-35’s ever growing shop of horrors).

Anders made his amazing admission in the 1991 keynote address to the twelfth annual conference sponsored by Defense Week, then a very influential newsletter in the MICC. His intent was to explain why, at the end of the Cold War, General Dynamics had chosen not to diversify its business into the non-defense sector — i.e., why GD was not interested in converting swords into plowshares. Instead, Anders proposed to undertake a takeover strategy to increase its market share in a (temporarily, as it turned out) shrinking defense market.

Anders was not alone in thinking along these lines. In fact, his speech was a precursor to the industry-wide, government-subsidized “Pac-Man” consolidation strategy. This strategy was promoted by President Bill Clinton’s then deputy secretary of defense, William Perry, at a 1993 meeting with the defense titans, a meeting dubbed the “Last Supper.” Perry’s strategy led to a rash of industry-wide mergers beginning in the mid-1990s.

Significantly, when the defense budget began to grow rapidly after 1998, there has been no undoing of the consolidations, even though rising defense budgets eventually grew to levels exceeding the highest budgets of the Cold War, even after removing the effects of inflation.

Today, the defense industry is dominated by three giant all-purpose weapons manufacturers—two of which now have their headquarters in the Washington, DC, area, and the third (Boeing) with a major government relations office in the DC area as well—to more closely supervise their most important corporate activity: the lobbying efforts that influence the money flow out of the Pentagon, Congress, and the White House.

Together with the banksters, these immensely powerful companies, their smaller brethren, and the huge supporting cast of gucci-shoed K Street lobbyists, pro-defense think tanks, and the defense trade press are poised to pounce on President Obama and Congress to protect their fiscal honey pot, while the rest of country is heaved over the fiscal cliff.

If you want to learn more about the important but little examined subject of the economic distortions caused by the defense dependency, and by extension, learn more about why America is becoming a third world nation, the best introduction is still Melman’s** elegantly argued eleven-page prologue to Profits Without Production, aptly titled ”How the Yankees Lost Their Know-how.”

If that essay does not peak your interest in this hugely important subject, nothing will. Unfortunately, you will have to go a used bookseller to find it.


Franklin “Chuck” Spinney is a former military analyst for the Pentagon and a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He be reached at chuck_spinney@mac.com

* At this point, I should note that Melman believed it was possible to convert defense manufacturers to civilian production on a large scale, but such a massive conversion program would require large scale government sponsored industrial planning. This kind of planning is a highly toxic subject to believers in free-market capitalism. So, it should not be surprising that military conversion — i.e. turning swords into plowshares — is not only an exceedingly complex but also a highly controversial subject. The possibility or impossibility of conversion is not at issue in this essay. My focus is on the short term response of any grand bargain to dodge the effects of the looming budget sequester: namely how in the next few months the defense dependency may induce the politicians, who have been captured by it, to fling the middle class off the fiscal cliff (i.e., by cutting back expenditures for Social Security, Medicare, Medicade, infrastructure modernization, education, etc.)

** Caveat emptor: Melman was my friend and I made some minuscule contributions to the research in this book.