This is Neoliberalism, Part IV: The Military Industrial Complex and the Big Lie Exposed
The business of America is no longer business. It is war.
In 2018, US President Donald Trump announced the lifting of export restrictions on “lethal” military drones — to much consternation from the #Resistance media. The wailing and gnashing of Liberal teeth sought to portray the move as a flagrant expansion of an already out of control global arms market, while “competitors” like Israel worried that this new “Buy American” program would hurt their own drone sales.
The Trump administration is nearing completion of new Buy American rules to make it easier to sell U.S.-made military drones overseas and compete against fast-growing Chinese and Israeli rivals, senior U.S. officials said.
It’s What We’re Good At
The move made sense, if what you want is to create “good-paying” American jobs. The US is already the undisputed world leader in arms exports. Loosening the restrictions on drones is just a good way to boost American manufacturing and create “high tech” jobs that pay well.
Indeed, the Trump Administration’s move will help Defense Contractors such as Boeing, Northrop Grumman, General Atomics and Lockheed Martin, whose shares all rose on the news.
The Business of America …
In Part One of this series, I laid out the Ten Tenets of Neoliberalism, which declare that the Market is the Mother of All things. However, the arms manufacturing industry and its main customers in the defense, intelligence and security industries seem to be the one area of the US economy for which these laws do not apply.
Indeed, neoliberalism is defined not just by its slavish devotion to the dictates of the Market, but also by areas, sectors and industries that it singles out for exemption from those Market forces.
“The most indestructible weapons system known to man is one that is manufactured in all 50 States.”
The Defense industry is one that is virtually devoid of competition. Defense contractors charge whatever they can get away with, and their pricing and profits are rarely if ever questioned. Yes, we have heard about the famous $600 hammer and the $1000 toilet seat, but those are merely anecdotal punchlines to a cruel joke. The fact is that Defense contractors have little to no oversight, and despite the scathing and damning reports issued by the various Inspectors General for the armed services receive no attention and are rarely acted upon.
A US Army private who drives a truck makes a mere fraction of what a truck driver working for a Defense contractor makes. This article in the Washington Examiner describes the various ways in which Defense contractors make three times private sector wages:
… defense contractors earn three times as much as their private sector counterparts, according to a 2012 report by the nonprofit Project on Government Oversight.
Raytheon charges the government $90 per hour for “administrative support/clerical” work for individuals with a minimum of a high school diploma and two years of experience, and slightly more than $100 per hour for first-tier management consulting.
Rates for labor are offered as a price to the government, with no information available as to how much is used for overhead, profit or actually distributed to workers in the form of pay. Moreover, the government does not collect data on the number of contractors it hires.
Ukraine was a boon for the MIC
As you can see from the chart below, spending on federal contracts has increased 45 percent since 2014, and we are now spending over 60% more on Defense overall than we were in 2004–2005 -at the height of the Iran and Iraq Wars.
A big reason — if not the sole reason — for that increase is the proxy war that the US engineered in Ukraine.
Saying the quiet part out loud
There is a reason that all military assistance for Ukraine (and Israel) enjoys bi-partisan support in the US Congress. Well, actually, two reasons, according to US politicians.
First, the Military Industrial Complex (MIC) is the one industry that is truly American. The “defense industry” has not been outsourced, has not been restructured, has not been “slimmed down” or in any way diminished. It is stronger than ever, according to Forbes. This is because of the massive consumption of armaments and weapons systems in the “wars” going on in Ukraine and the Middle East.
As President Biden said in a speech in October 2023:
“We send Ukraine equipment sitting in our stockpiles. And when we use the money allocated by Congress, we use it to replenish our own stores, our own stockpiles, with new equipment. Equipment that defends America and is made in America. Patriot missiles for air defense batteries, made in Arizona. Artillery shells manufactured in 12 states across the country, in Pennsylvania, Ohio, Texas. And so much more.”
For US politicians, more missiles, bombs, tanks, etc. means more “good paying jobs” in America. It’s a win-win.
The only losers are the people being killed in those wars.
Obviously the defense contractors enjoy quasi monopolistic — or at least oligopolistic — control over the market and their own pricing. They can charge whatever they want, and their donations to politicians ensure that the money for “defense” or “support for our allies” will be approved regardless of the cost.
So where are those Market forces?
The short answer is that Market forces play no role under neoliberal regimes when it comes to military spending or spending on other areas that are of personal or class-based importance to the ruling oligarchy.
This is why, as I explained in Part Three of this series, military service has become the last resort for so many American youth. In the absence of access to affordable education or decent-paying jobs in the private sector, our young people are forced to risk their lives — and possibly take the lives of others — in order to get by. Uncle Sam is always hiring, and can always afford to hire.
The Big Secret of Neoliberalism: Deficits don’t matter
“Reagan proved that deficits don’t matter,” Vice President Dick Cheney said when the Bush administration sought a second round of tax cuts in 2003. Yes, the great neoliberal icon, Ronald Reagan, who claimed we could simply not afford social programs, who claimed the government was too big and spent too much, didn’t mind going into the red when it came to stoking up the arms race or handing big tax cuts to his wealthy donors and friends. And many of them were in the “arms industry”.
In the 2023 Federal Budget, defense and military spending was increased to a record $886 Billion, almost a $110 billion increase over the previous year. No debate. No discussion. No filibustering. Democrats joined with Republicans to approve this massive increase in military spending, which, quantitatively speaking, was much more than the cost of providing tuition-free college to every American student.
Likewise, the 100’s of Billions of dollars in “emergency” aide packages to Ukraine, Israel, Taiwan and others eventually sailed through Congress almost unanimously.
There were some ideological quibbles about the legitimacy of “big government spending” from the Republican side of the aisle, notably from people like Senator Rand Paul and Rep. Thomas Massie (both of Kentucky), but what little GOP opposition there was came more from a political angle.
Specifically, the Ukraine aid divided the Pro-Trump and Never Trump camps, as the support for Ukraine became regarded by some Trump supporters as a partisan issue due to the Democrats having impeached Trump over Ukraine aid.
But no one really made the argument that is so often used to shoot down domestic spending efforts, namely: “how are you going to pay for that?”
And of course sending massive amounts of money and arms to Israel never even came into question.
Trade Agreements = Arms Agreements
In 2015, many on the Left wondered why Obama and the Democrats were so fervently pushing the trade agreement called TPP, or Trans-Pacific Partnership.
While some realised that Obama’s “pivot to Asia” was not just on defense, but also on trade, fewer still realised that defense and trade were now one and the same interest.
The TPP ushered in a new era of massive arms sales to Pacific countries. In 2016, in preparation for what they believed would be a passing of the TPP, the Obama Administration lifted a long-standing ban on arms sales to Communist Vietnam. Why? Because we do not want them to be buying their drones from China.
Conversely, deals like AUKUS, which are sold as defense cooperation agreements, are in actuality massive trade deals.
The enormous arms deals that we have signed with Saudi Arabia and Israel are also not just for strategic purposes. Our support for the Saudi war in Yemen was not ideologically based — it was economically based.
The US is one of the sole producers of such weapons as cluster munitions, white phosphorous and depleted uranium tipped shells — all of which are either banned or have been condemned by the international community. It is getting harder and harder to find buyers for these goods. The Saudis and Israelis are happy to provide a market for them.
In 2016, CNN’s Wolf Blitzer spilled the beans about what our relationship with these countries means. In a contentious interview with Senator Rand Paul, Blitzer challenged the Senator’s opposition to the US aiding Saudi Arabia in its war in Yemen, claiming that stopping the Saudi support for the Yemeni genocide would result in lost jobs here at home:
“So for you this is a moral issue,” he told Paul during the Kentucky Republican’s appearance on CNN. “Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s going to be a significant loss of jobs, of revenue here in the United States. That’s secondary from your standpoint?”
See the video here:
The Death Economy
The above clip from CNN really says everything that needs to be said about the imperial manifestation of US neoliberal economic policies.
We cannot stop making war because our economy runs on death.
The tentacles of the Military Industrial Complex are sunk deep into every Congressional District, and the manufacture and sale of weapons has now become the dominant US industry in terms of providing “good manufacturing jobs.” Most other such jobs have been outsourced and off-shored under a succession of neoliberal trade agreements.
When Neoliberals become Neoconservatives
Neoliberalism and Neoconservatism are two sides of the same coin: one reinforces the other. Whereas Neoliberals believe that The Market is the Mother of All Things, Neocons believe that the United States is and must remain the world’s one and only Superpower and global Hegemon.
Neolibs are all, deep down, also Neocons. Just as “reform” (i.e. deregulation) bills for such well-heeled industries as banking and telecommunications are passed in the US Congress with “bi-partisan support” so do all arms deals and trade pacts sail through. Moreover, when it comes to going to war or sponsoring proxy wars, US politicians are quick to join together to cheerlead the new military adventure.
Thus, the US Military Industrial Complex has been given immunity from the neoliberal “Market forces” arguments that have ravaged all other sectors of the American manufacturing base. This was done on a bipartisan basis over decades. And now we must accept the fact that the US economy literally runs on spreading death and misery around the world.
#End.
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