Globalization of the military-industrial complex

Part of the appeal of massive defense budgets has been that they were widely believed to be useful in creating jobs. For American workers.

Even that notion has been grossly oversold. But outsourcing is adding a qualitatively new dimension to it. Bruce Stokes writes in "Aerospace Jobs Landing in Asia" National Journal 2/10/2007:

Pursuit of lower labor costs in low-wage countries and nonunion factories certainly accounts for some of this move toward systems integration. But the allure of cheaper capital - provided by foreign subcontractors or their governments - may be an even more important driver of outsourcing. That foreign capital reduces the self-financing needed to launch an airplane such as the Airbus A350, which will cost more than $15 billion to develop. Such daunting price tags have led Boeing and Airbus to unload some of their expenses by requiring hardware and airframe suppliers to contribute to development costs, to finance preproduction and test hardware, and, in some cases, to become full risk-sharing partners. Airbus, for example, hopes to get foreign partners to absorb $2.5 billion of the A350's development costs.

"Systems integration ... means shifting the financial risks to suppliers, especially those who, like the Japanese and the Italians, are subsidized by their governments," writes John Newhouse in his new book, Boeing Versus Airbus.

"This is all bad news for the traditional North American and European supplier," Pritchard and MacPherson write. Though it may make sense from a financial standpoint, the duo says, this outsourcing leads to a lot of technology transfer, the delivery of proprietary information to foreign contractors, and "home-country job losses among skilled workers with expertise in design, engineering, and R&D."

Job loss grabs the most attention. Boeing, which employed more than 90,000 workers at the beginning of the decade, now has half that number. Employees are particularly upset about the outsourcing of more than 1,300 technical jobs to Boeing's Moscow Design Center. This is skilled work that free-trade theorists once argued would stay in the United States even as assembly-line labor migrated overseas. "They do work that could be done by folks at Boeing," said Bill Dugovich, spokesman for the Society of Professional Engineering Employees in Aerospace.

The outsourcing of such jobs could result in the loss of what aircraft industry analysts call "tribal knowledge," the accumulated human expertise gained only by getting one's hands dirty in designing and building aircraft. In the long run, outsourcing critics contend, the erosion of tribal knowledge could undermine Boeing's much-vaunted core competence as a systems integrator. "Can you run the systems integration process after you've outsourced the store?" Newhouse quoted one experienced Boeing engineer asking rhetorically. "It's easier to integrate if you have a clear knowledge and feel for the pieces." (my emphasis)

This article is interesting to me on a couple of levels. One is that comment I've bolded that outsourcing is not just a matter of cheap labor. Capital costs are also a factor, costs which are driven higher by huge US national debts run up during the Cheney-Bush administration primarily to provide huge tax subsidies to the wealthiest individuals.

The other is the perspective it adds on military spending. Whereas it's long been true that other types of government spending can generate significantly more jobs than defense spending, what we're seeing now is that an increasing portion of the jobs created by American defense spending is providing more jobs for people other than Americans. Even for the Russians!

Tags: Tags: military budget, military industrial complex

Short, concise and to the point

William Arkin writes in Our Money Problem and Walter Reed Early Warning blog 03/08/07:

The total defense budget for fiscal 2008 then - regular budgets plus emergency supplemental requests plus bridge funds - will be about $620 billion, close to Vietnam War levels of spending.

Antiwar opponents decry the billion dollars a day we seem to be throwing away over there.

Others argue that defense spending as a proportion of the GNP or in relationship to our healthy economy is far below Cold War levels and is scandalously low.

But the far more interesting question is, why aren't we getting improved security and successful military operations for our money?

Testifying before Congress last month, Dr. Gordon Adams, a Fellow at the Woodrow Wilson International Center for Scholars and the Clinton era national security spending czar at OMB precisely asked this, saying "if we cannot provide military security for the United States at this level of spending there is something seriously wrong with planning and implementation in the Department of Defense."

Yep. Well said.

Tags: military budget

The military budget

It's long past time that Congress start taking a real, skeptical look at the military budget. Bob Dreyfuss in DOD bloat at his blog gives a very succinct explanation of why the current level of military spending is absurd:

In 1999, the budget for the Defense Department was $276 billion. For 2008, the Pentagon request will be a staggering $623 billion, including $142 billion for the wars in Iraq and Afghanistan. (That means defense spending is two and a quarter times higher than it was a decade ago, for those who don't have a calculator handy.)

One of the risks in the current situation is that Democrats who want to see the Army get relatively more resources will push for Army increases which will gain Republican support. But they will be timid about pursuing military cuts on projects Republicans favor, no matter what boondoggles they may be, for fear of that bogeyman of being termed "soft on defense".

As Andrew Bacevich pointed out a couple of years ago, if the US were to sett our military spending to equal the level of the next 10-largest national military budgets, we would still be making substantial cuts.

Robert Scheer recently wrote in Bush Budget Delivers the Bacon Truthdig.org 02/06/07:

President Bush’s outrageous military budget has nothing do with fighting terrorism but everything to do with pumping up the profits of the administration’s generous political donors in the defense industry. ...

Ever since some lunatics, mostly citizens of our longtime ally Saudi Arabia, used $3 knives to hijack four planes on the same morning, President Bush has exploited our nation’s trauma as an opportunity to throw trillions of dollars at the military-industrial complex to build weaponry for a Cold War that no longer exists.

Carolyn Said writes today in the San Francisco Chronicle about a business group pushing for a more realistic military budget: If CEOs ran defense. I'm not sure the headline makes much sense. Rummy had been a CEO, and we know how he ran defense!

[Ben] Cohen is president of a group called Business Leaders for Sensible Priorities, which he founded in 1998. The bipartisan organization now numbers about 700 members, including Ted Turner and Paul Newman, plus an advisory roster of retired top military officials. About 80 Bay Area businesspeople are in the group, including the new chairman, San Francisco investor Warren Langley, the former president of the Pacific Exchange stock and options market.

Of course, in the unstated rules of the group we call our "press corps", scrutinizing defense budget has to be cast as the province of hippie peaceniks. So the article begins:

What qualifies folksy businessman Ben Cohen, the man who gave the world Wavy Gravy ice cream, to critique the $2.9 trillion federal budget unveiled on Monday?

And not just to repeat liberal platitudes about less money for defense and more for social welfare, but to cite chapter and verse on F/A-22 Raptor fighter jets and DD(X) destroyers that should be axed, slashing $60 billion from basic military spending?

Yes, asking practical questions about the military budget in 2007 must surely have something to do with Wavy Gravy and John Lennon. And to qualify as a "platitude", doesn't something have to be said fairly commonly? I can't remember the last time at all I heard anybody talk about "less money for defense and more for social welfare".

But below the fold, we get more specifics about this hippie project:

[Langley said:] "We won the Cold War. The world changed. But we're still spending ourselves into oblivion" on obsolete weapons.

Lawrence Korb, assistant secretary of defense under President Ronald Reagan, wrote a report that Business Leaders for Sensible Priorities distributes, pinpointing how to save $60 billion at the Pentagon by reducing the country's nuclear arsenal, cutting its National Missile Defense [Star Wars] program, scaling back obsolete weapons, eliminating some forces and reducing earmarks in the budget. The group would like to see the money saved allocated to education, health care, alternative energy and other social programs. Its proposal does not address war spending in Iraq and Afghanistan, but the so-called base military budget. (my emphasis)

Dang hippie Reaganites!

Here in the real world, the Star Wars program may well be the biggest boondoggle project in the entire history of humanity. Although a decade or so of the kind of corruption we've seen in Iraq "reconstruction" and Katrina recovery might surpass it, I haven't really done any calculations myself.

The single biggest set of things the US could do to make ourselves more secure and the world a safer place is to drastically reduce the 10,100 nuclear weapons we currently hold and work with Russia to do the same with their 16,000, to secure old nuclear weapons in Russia and take our and their nuclear missles off hair-trigger alert status. The latter being easily the most critical.

Bruce Blair writes in Primed and ready Bulletin of the Atomic Scientists Jan/Feb 2007:

[In case of a possible nuclear launch from the other side] Then the U.S. or Russian president would have to decide whether to retaliate, and since the command systems on both sides have long been geared for launch-on-warning, the presidents would have little spare time if they desired to get retaliatory nuclear missiles off the ground before they — and possibly the presidents themselves — were vaporized. On the U.S. side, the time allowed to decide would range between zero and 12 minutes, depending on the scenario. Russia operates under even tighter deadlines because of the short flight time of U.S. Trident submarine missiles on forward patrol in the North Atlantic.

It is surprising to many people that so much firepower, representing such an apocalyptic threat, remains cocked on a hair trigger. Such rapid implementation of war plans would amount to going to war by checklist, enacting a prepared script of launch-on-warning that leaves no room for real deliberation, rational thought, or national leadership. Even in today’s post-Cold War political environment with relatively good relations between Russia and the United States, there is inherent risk of human or technical error that results in a mistaken or unauthorized launch. (my emphasis)

Blair also makes an important point that I don't recall seeing highlighted before. We've heard some - not nearly enough - about the joint US-Russian effort to secure the so-called "loose nukes" in Russia's storepiles of old nuclear weapons. This is particularly important to minimize the risk of terrorist groups getting possession of a usable nuke. This is part of what in the US is known as the "Nunn-Lugar" process, after the name of the US legislation addressing it.

But it's actually the hair-trigger alert status of Russia's nukes that present the greater danger of terrorists seizing a nuclear weapon:

What is less well understood is that this nuclear dynamic absolutely precludes "locking down" Russia’s nuclear arsenal in the way envisioned by the Nunn-Lugar program. Russia’s warfighting nuclear posture keeps many hundreds of weapons in transit or temporary storage at any time. Far-flung mobile combat forces are in constant motion, and nuclear bombs are being constantly shuttled back and forth between their combat field locations and bomb remanufacturing facilities thousands of miles away. By truck, train, helicopter, and van the Russian bombs are constantly moving across 10 time zones.

And transportation is the phase in a nuclear bomb’s life cycle in which it is most susceptible to capture or theft. That is the Achilles’ heel of Russian nuclear security. Nunn-Lugar focuses on stationary weapons, in storage, and does not alleviate this risk at all. (my emphasis)

One basic dilemma of groups pushing for more sensible defense spending and priorities is that even the most boondoggle weapons systems have well-financed lobbyists pushing for them, while there is no comparable lobbying group or political pressure at present pushing to restrict them.

But there really are cases, most dramatically with nuclear weapons at the current moment, where "less is more" in terms of national security.

Tags: military budget, nonproliferation