Saturday, July 18, 2015

Making A Killing - Profiting From War

The National Priorities Project, an organization that analyzes the US budget, projects that "in fiscal year 2015, military spending is projected to account for 54 percent ofall federal discretionary spending, a total of $598.5 billion."
That does not include funding for the National Intelligence Programs - including the Central Intelligence Agency - which will separately receive $45.6 billion dollars in congressional discretionary funding in 2015, according to the Federation of American Scientists.
In addition, no one can accurately track all the military and intelligence discretionary spending buried in other line item allocations. This is because many projects related to military spending are intentionally concealed in unlikely funding areas.

That money is disproportionately going into the bank accounts of private defense contractors. reported in 2013:
Take the case of the Defense Department (DOD), the largest federal bureaucracy, with 2.48 million federal employees and 700,000 contractor employees who generally work alongside civilian and uniformed employees. When [then] Defense Secretary Chuck Hagel testified before the Senate Armed Services Committee last week that Pentagon budget cuts would include contractors, Sen. Dick Durbin (D-Illinois) pressed him on the issue of contractor inefficiency.
Durbin pointed out that a recent DOD report “emphasized that the average contract employee costs two to three times as much as the average DOD civilian employee for performing similar work, [and that] contract employees comprised 22% of [DOD's] workforce but accounted for 50% of its cost,” figures confirmed on the spot by Defense Comptroller Robert Hale.

Even though the Iraq and Afghanistan wars are now less intensive, for-profit contractors are still making a killing. ThinkProgress noted in 2013: "Defense contractors have managed to not only stay afloat but also thrive in a climate of government closure and massive cuts [although, the 2016 fiscal year defense allocation indicates that the military budget is inching up again] to the Pentagon’s budget, continuing to rake in billions upon billions of dollars in profits."

The National Priorities Project recently listed the top ten defense contractors (again, this list does not include the intelligence agency private contractors, which may consume up to 70 percent of the intelligence budget). Coming in at number one for Defense Department contractors is Lockheed Martin:
That’s 7% of all federal contracts, and the equivalent of three percent of discretionary spending in 2014, to just one company.
That company saw over $5.5 billion in profit, and paid its CEO more than $34 million in 2014. And the $32 billion it received from the U.S. government made up more than seventy percent of its total sales.
And Lockheed’s signature product? The F-35 jet fighter, which despite being in development since 2001, and being billions of dollars over budget, is not yet combat ready. The F-35’s top initial selling point?
Lockheed Martin represents a for-profit industry that depends upon conflict to enrich shareholders and their corporate executives. The quintessential mainstream corporate media newspaper, USA Today, actually headlined an article in 2013, "10 companies profiting the most from war," with Lockheed leading the pack.

It is nothing new to argue that members of the corporate defense industry - famously labeled the military-industrial complex by President Eisenhower - are in essence merchants of war. Back in 1935, former United States Marine Corps Major General Smedley Butler - military hero of many conflicts, including World War I - penned a scornful book, "War is a Racket." He began the first chapter with a damning accusation:
War is a racket. It always has been.
It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.
A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the second chapter of his book, Butler lists the companies and industries that profit from the carnage of war. Nothing much has changed except since the '30s except for the names of the corporations and the increased cost of high-tech weaponry. People are still dying so others can make a profit.
War is still a racket.

from here

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