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The New Bad Guy on the Block Syndrome(32 posts)

The New Bad Guy on the Block Syndromejose_Tex_mex
Sep 23, 2002 1:20 PM
Does anyone think there's a correlation to the ever growing defense industry and the need for a bad guy on the block? Do you think the defense industries (in which many of our elite gov't officials are heavily invested) will ever want peace and harmony.

First it was the Soviet Union, then the war on drugs, and now terrorism. All the time defense stocks and companies growing without bound.

In another 20 years after we get tired of the war on terrorism what will be next. You think someday we could ever have a war on poverty or ignorance?
Quick Fact Check...TJeanloz
Sep 23, 2002 1:46 PM
Thumbing through the web confirms what I thought to be the case: the United States is spending less on defense than ever before. Over the next two years, the United States is projected to spend 3.2% of its GDP on defense; this is down from 5.6% in 1990, and substantially higher than the Western European average of 1.9%.

How does this stack up historically? At the height of WWII, defense spending was ~38% of GDP; through the '50s and '60s it ranged from 10%-15%; and the trailing average, not counting WWII is 6.8%. My point is that I would agree that a continuously increasing defense budget is bad, but thankfully, not the case in the United States. Defense companies will get on just fine, even in times of peace and harmony, because I doubt we'll ever be secure enough to put down our guns.
%'s vs $'sjose_Tex_mex
Sep 23, 2002 5:32 PM
I am not sure if we are talking the same language here. If I take as truth your figures is it not possible that real dollar values actually increased whereas %GDP decreased?

I wonder what 38% of our WWII GDP was compared to 1990's 5.6 even with real dollar corrections?

In the defense industry when they get money it's use it or loose it. I have never known anyone to loose it or give it back.

It was my understanding that even Clinton spent more on defense than George.
Absolutely,TJeanloz
Sep 24, 2002 6:16 AM
There is no question that our current $ expenditure on defense is larger than it was at the height of WWII; but that isn't an interesting statistic. A candy bar cost a penny at the height of WWII, but today, it isn't necessarily any more expensive at $0.65. Measuring as a percent of GDP gives a good estimator about what percentage of our economy (ie money) is going to defense. The actual dollar amount is pretty irrelevant.
oh myDougSloan
Sep 23, 2002 1:50 PM
The "war on drugs" was nothing compared to the Cold War, or even the Gulf War. The war on drugs is largely fought by local police, the courts, and our over crowded jails. I don't think it has much to do with the defense industry (except defense attorneys :-)

We have had a war on poverty and ignorance for a long, long time. If nothing else, FDR started the war on poverty, instituting massive entitlements and programs to employ people and assist the poor. The war on ignorance is largely fought in our public schools -- not that they are doing a great job -- but money isn't the issue.

In an idealistic world, there would be no criminals and no enemies, and therefore no need for national defense nor local police. Until that world exists, I'm frankly happy to see the govenment doing the one thing is surely is chartered to do -- defend and protect us. If spending and state of the art technology allows that to take place with minimal loss of our soldiers' lives, then I'm happy to pay for it.

I don't think anyone can make a plausible argument that this war on terrorism is made up. Those pictures of the planes slamming into buildings and killing thousands of people looked pretty darn real to me. But, you're right, instead of arming, maybe we can just send Jesse Jackson over there and persuade the terrorists to just be nice. Is that the solution?

Idealism is admirable, but it won't defend our borders. Any suggestions?

Doug
You're forgetting. . .czardonic
Sep 23, 2002 4:02 PM
expenditures related to the Border Patrol and Coast Guard.

Then there are military opertions in Central and South America. Those that weren't directly sponsored by the US Gov't were surely supplied by US defense contractors.
c'mon Doug... let me ask a few questionsjose_Tex_mex
Sep 23, 2002 5:58 PM
With all due respect...

The war on drugs was largely fought by local police? I am sure there are plenty of special forces in Colombia and Nicaragua who would chuckle at that. If your definition of the war on drugs is limited to the crack heads we see on COPS every Saturday night then I agree. However, that's a little constrained.

As for poverty - good point and well taken.

I am surprised that you do not see the Irony in policy makers that are heavily invested and involved in the Defense Industry. You do not see this as a conflict of interest? We go to war and automatically Rumsfeld's stock jumps on the order of millions? How can this not cloud his judgement? That does not bother you?

If these policy makers continue to have a hand in the defense industry where is the incentive to scale back? It's almost a joke in certain circles that we needed Iraq to help deplete our cruise missile stock - not a bad deal at a million a shot. If there's no incentive to scale back then we will go forward. Where do we stop?

As for paying for it, [please pardon me for putting you on the spot]
1) Were you happy to pay for the Shah of Iran?
2) Were you happy to pay guns for hostages?
3) Were you happy to pay Hussein to beat down Iran?
4) Were you happy to pay for undoing Hussein?

Seems as if my investment went awry. What am I getting for my money? Hindsight is 20/20 but that's not to say our policy makers weren't blind. You really have to look past the next four years.

How about the former USSR? So we spent a lot of money to bankrupt them. Great plan. Now we are spending money to help ensure lot's of smaller provinces don't "lose" nukes. Kennedy did not want an arms race. Shoulda, coulda, woulda...

Finally, we hated the USSR and backed the Afghans - trained them, equipped them, and financed them. As thanks for their help in the war, the CIA relocates people like Sheik Rahman (the blind cleric in the Santa Claus hat) to Jersey City and sets him up with a mosque. What's our thanks, he tries to blow up the Towers. Where he finishes his Saudi neighbors pick up. Now we love the Ruskies and hate certain Afghanistanis. Is this the circle beginning again?
what's your point?DougSloan
Sep 23, 2002 6:54 PM
It's my understanding that all government officials must sell or place stocks in trust during their tenure, and can receive no profits from them. If that's not the case with Rumsfeld, I'd be surprised.

I can't say that I always agree with everything the government does, nor do I understand or have access to enough facts in most cases to make judgments about them. I doubt many of us do. Nonetheless, I really doubt they are wasting missles just so they can make more (unless they have expiration dates? :)

I'm totally lost about what your point is. War is bad? You don't trust the government? Anarchy is good? Give us some sort of thesis, rather than just a rant, to respond to.

Doug
what's your point?Pygme
Sep 23, 2002 7:10 PM
You are right Doug. High government officials stock/ business interests are placed into blind trusts. This reduces the chance that they will make policy decisions based upon their own financial interests.
With all due respect Doug...jose_Tex_mex
Sep 24, 2002 12:39 PM
... If I offended you somehow I apologize. I am unsure what I did to set off the "tone" of your last paragraph. I believe I have often thoughtfully responded to your postings with respect and in most cases agreed with you.

Indeed, I made sure I went out of my way to say "with all due respect," "pardon me," and note where I agreed with you. If I erred then I was wrong and apologize.

With that said, my "point" was to have a look at the link between the defense industry and "the bad guy on the block." If I left the topic somewhat open it was my intention to not constrain the responses and see what people had to say on the topic.

Additionally, I was trying to show that most people see the bad guy (Commies, Drugs, Terrorism) as being the reason for defense spending. I implied that, perhaps, defense spending might be the cause of (or at least partially responsible) for some of the bad guys.

In order to back this up I used examples such as our actions in Iran/Iraq, the former USSR, and the 80's involvement in Afghanistan. With these examples I attempted to display that maybe, just maybe, the defense industry was creating a sort of loop - akin to circular logic.

For example, if the terrorists were to go away tomorrow and there was peace and harmony what would happen to the defense industry? Would it just say - hey we are no longer needed and gracefully turn out its hundreds of thousands of workers and billions in stock? Or, might it look for somewhere else to apply its trade? If it were in a position to help itself, to what extent might it go?

As for your comment wrt stock I agree that individuals will probably not be on eTrade the day beore the War. But do you really believe that they do not have the foresight to put their eggs in to the right basket? Does freezing assets work just for as long as they are in office? How about contracts awarded for 10 years? Or inevitable spending that comes about because of a war?

We all know the second we invade Iraq the price of oil will go nuts until the strategic reserves are realeased. Give me the nanosecond time delay in which this occurs and I will make us both billionaires.

Respectfully Submitted
Oil prices,TJeanloz
Sep 24, 2002 12:48 PM
Not to rain on your parade, but you're too late to arbitrage an Iraqi invasion scenario. Oil prices have been run up almost 50% already this year (from ~$20/barrel, to $29/barrel for BCF) in anticipation of an attack on Iraq. The actual event probably will cause a drop in prices, as it did in 1990/1991, when we realized the war was much shorter and easier than it was projected to be.
I guess retirement gets pushed back...jose_Tex_mex
Sep 24, 2002 1:56 PM
I would actually like to see [for my own reference] the price of oil leading up to the war, the day of the war, the time we released the strategic reserves, and the end of the war.

Did you mean to say that "the actual event [of war] will cause a drop in prices, as it did in 1990/91"? If so I would have to disagree as it was my impression that the price of oil spiked at the event of war and remained high for the first five months. Once the war wrapped up quickly the prices did return to normal - sometime in the Spring of 1991.

Also, can we count on the Saudis? Last time Hussein was on the move and they felt threatened. This time they are dragging a$$, Saudi terrorists are attacking us, and we have ten years of pissing them off due to our base in the "Holy Land."
I was actually a bit surprised to see it,TJeanloz
Sep 25, 2002 4:19 AM
I can't cut and paste the pictures, because I'm not computer savvy enough to do it, but this should be the right link.

http://futures.tradingcharts.com/hist_BC19933.html

It depends when you count the war; oil prices gradually rose over the course of August 1990 to January 1991; but on "ultimatim day" prices actually gapped downwards by a huge amount (like $8/barrel). Prices were actually back to "normal" levels days after the war began. It's counter-intuitive, but the markets often price in worst-case scenarios; we're seeing this in the stock market right now, where companies are all being valued based on the fact that their numbers are complete fallacy, whether that's the case or not.
cool chart...jose_Tex_mex
Sep 25, 2002 7:52 AM
I am no commodities expert and have to admit my statement probably was not about the BCO. The data I found just mentioned crude oil. If there's a big I wouldn't be surprised.

Also, I believe the strategic reserves were released shortly after the declaration of war - I'll have to checck on that as well.
BCO...TJeanloz
Sep 25, 2002 9:00 AM
BCO or Brent Crude Oil is just the long way of saying oil. It's the formal name of the most often traded futures contract; so if you hear what the price of oil is per barrel, they're quoting the Brent Crude price for the most recent delivery- right now we're looking at November contracts.
I didn't have a clueDougSloan
Sep 24, 2002 1:32 PM
I didn't take any offense in the slightest -- you read more into it than I intended. I just had no idea what your real point was. I didn't know how to respond, that's all.

I think you are pointing out a link between defense spending and enrichment of the defense industry. Yup, I'd have to go along with you on that one. Now, is that a necessarily a bad thing? It employs lots of people, develops new technology, and helps to keep us safe. I'm not at all saying government spending is intrinsically good in any way, but if there is one thing the federal government should do, it's national defense.

Doug
What if they held a war and nobody came?moneyman
Sep 24, 2002 2:28 PM
HAH! Don't hink that will ever happen. Just take a quick look at a high school world history textbook, and you can see that war is a constant of human existence on earth. Because of the propensity for humans to attack and kill each other in large numbers, the "defense industry", if you can define it, will not need to propagate war. We will do just fine on our own, thank you.

Stock in a blind trust is that - blind to the owner. You let someone else manage it and you have no decision as to the holdings in the portfolio. Full discretionary authority to the manager.

$$
A few....cyclejim
Sep 23, 2002 10:04 PM
1. Stop providing military support to Israel, and when you tell them to do something back it up instead of letting them walk all over the US after everything we have done for them. Don't issue ultimatums and wait for them to not comply and then say, well okay, how about this one? No, okay how about this one???

2. As an average American, do not accept everything your goverment tells you. Don't be afraid to speak out (even in these times), get yourself informed and hold the government accountable for its actions. Frankly most Americans just blindly follow what the President & govt. says and refuse to believe we could ever possibly be wrong when it comes to foreign policy. Most Americans also have a very weak world view and know little (or give a damn) about anything that happens ourside our borders.

3. Invest a nice chunk of cash to study and advance alternative methods of energy production. Lower our dependance on foreign oil.

4. Pull out of Saudi and Kuwait.



Defend our borders? Well, we already have taken care of that- we have anti-aircraft batteries posted in D.C. We have combat air patrols at the ready. In the meantime 75% of weapons are still able to be smuggled thru airport security and onto planes, but hopefully the F-16s will be able to shoot the civilian airliners out of the sky before they get flown into more buildings/nuclear power plants, etc. Then we need to outlaw cropdusting, harden all water treatment plants nationwide, and come up with an invisible shield that covers the entire US. Anything that touches it will be vaporized. If the world community balks, screw them.

Alternatively we can go ahead and take out Saddam, (probably only lose less than 1000 American boys- an acceptable number), continue marching into Iran to take out the 2nd part of the Axis of evil, and then threaten to invade North Korea unless they give up their WMDs. (The Chinese won't mind)

All the while the Islamic terrorists of Indonesia and in other parts of the world will start to see that we mean business and will stop hating us out of fear that they will be next if they don't shape up.
It doesn't get any more corrupt than this:Jomo Kenyatta
Sep 24, 2002 7:09 AM
I just read an article about how a former member of the joint chiefs of staff who was the key player in pushing legislation requiring all military personnel to receive the controversial anthrax vaccination was also the controlling shareholder in the sole company who provided the vaccine! If that's not corruption, I'm not sure what is... (Especially now that the public has found out just how unnecessary the vaccine really is).
It doesn't get any more corrupt than this:Jon Billheimer
Sep 24, 2002 10:04 AM
Unfortunately this kind of thing has been going on for decades. In the sixties this relationship of government with industry, particularly defence industries, was termed by protestors the military-industrial complex. It is alive and well still today. Even more unfortunately, and dangerous for the future of any democratic society, is the truth of Norman Mailer's comments that all real accountability by government to an informed electorate has been lost through the manipulation of the media by government and politicians, including outright lying and lawbreaking.

In Canada we live under virtual one-party rule for much the same reasons, the only difference is that our little banana republic is benign in its effects on world peace, poverty, etc. The dangerous thing about the breakdown of governmental accountability in the U.S. is that the consequences for the rest of the world are always far reaching and often lethal. This is why the U.N. becomes increasingly important as some sort of check on the unbridled abuse of American power.

I personally find Bush and Rumsfeld's demagoguery deeply alarming. That combined with corporate and political corruption, such as that cited above, Enron, etc. illustrates once again how power corrupts and absolute power corrupts absolutely...in my opinion, Doug Sloan, et al!
Some protestor...TJeanloz
Sep 24, 2002 10:39 AM
The term "military-industrial complex" was actually coined by Eisenhower (or his speachwriter), in his 1961 farewell address.

I am not so concerned about the above "corruption", presuming that his affiliations are well known. If Congress knows that it is in his best interest to give certain testimony, they can take it with a grain of salt. But what is the solution here? If you're the world's foremost expert on Anthrax (which I'm not saying this guy was), and you happen to own a company that makes the antidote, aren't you still the foremost expert on Anthrax, and shouldn't Congress at least hear what you have to say, so they can draw their own conclusions?
Yes, butJomo Kenyatta
Sep 24, 2002 12:00 PM
The fact that he had recently become a shareholder was not discovered by Congress (or anyone else for that matter)until after the fact. Also, he was not technically a member of the joint chiefs of staff. He had recently retired, but had considerable influence on his long-time buddies who made the decision (who may or may not have known of his affiliation with the company). Had the facts been known to Congress, I think there would have been considerable public outcry, and they would indeed have taken his lobbying with a grain of salt. The problem with corruption is that it is NOT generally known. Also, holding a medical patent does not make someone the world's foremost expert...
Military - Industrial complexmoneyman
Sep 24, 2002 12:50 PM
The term was coined by that radical anti-war zealot Dwight D. Eisenhower, Supreme Allied Commander/WWII and US President from 1953-1961. The speech can be found here.

http://coursesa.matrix.msu.edu/~hst306/documents/indust.html

Very interesting stuff.

"The dangerous thing about the breakdown of governmental accountability in the U.S."? What are you referring to?

And governments lying to their citizens? When did that start?

Norman Mailer is not a very objective source.

And at the risk of starting a border war, Canada is free because the US is strong. "The longest undefended border in the world" is not undefended. That US Navy Pilot in the Persian Gulf is protecting that border.

$$
Military - Industrial complexJon Billheimer
Sep 24, 2002 3:26 PM
You're right. Canada is free because the US is strong.

There is no real accountability of government to the people unless the people are told and understand the truth and the whole truth. Modern governments both control and manufacture information as it pleases them so as to mobilize public support for their policies.

As for the American government lying to its people, the first one I remember as a young child--which really upset me by the way--was Dwight Eisenhower lying publicly about the U2 spyplane over the Soviet Union. I haven't made a catalogue of government lies since, but the list is long. Watergate? Reagan deceiving and contravening congress over Iran-Contra and then covering up by saying he couldn't remember? And on and on and on. I do believe that our governments tell us some of the truth some of the time, but I do not believe that our governments tell us all the truth at any time. And unless we know the truth we can't make informed judgements at election time.

Sorry, but I have a profound distrust of government. Although our governments in North America are among the best in the world, given the sorry state of our world I'm not sure how much that's saying. We live in a highly Orwellian society in which the ultimate triumph of Big Brother has been to seduce us into loving Him. The founding fathers of America would have been appalled.
Distrust of government is healthy.Matno
Sep 24, 2002 6:56 PM
In fact, it's the very foundation of our Constitution (which I happen to think was inspired by more than just smart men). However, I do think that there are times when it is in the country's best interests to keep certain secrets related to military. Not necessarily forever, but there are people who demand to know things that ought to still be top secret military intelligence info. It's a small point, but does apply on occasion...

PS
Canada is no longer "free" in my opinion. Peaceful perhaps, but they no longer have private ownership of firearms (a fundamental check on governmental power), and they are severely crippled by a national health care system (which is now considered by a majority of their population to be "a disaster." That same population thought it was a great idea when it was first implemented. Funny how some things never change, and socialism never works--for very long).
Jefferson had a profound distrust of governmentmoneyman
Sep 25, 2002 5:50 AM
"Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. "

That's a pretty good precedent.

My intention of my tongue-in-cheek astonishment regarding politicians lying to the people goes back a bit farther than Ike. More like the beginning of humanity. And it wasn't always the despots who did that, either. Lincoln, for example, did quite a bit of fabricating during the US Civil War. He took control of the Constitution and did with it what he pleased. His secretary of War, Stanton, had quite a few critics of Lincoln thrown in jail just because of their criticism. He even had a Congressman from Ohio banished to the Confederacy. The Confederacy, by the way, saw Lincoln as a despot.

Don't forget a more modern example in one William Jefferson Clinton. Talk about a forked tongue. And I sincerely doubt that Chretien is completely honest, either.

Governments don't lie - the people in government lie. The reasons are many and, in the eyes of those who lie, completely justified. As citizens, we have to digest the information we receive and make decisions as to what we do believe and what we do not.

What was it Churchill said? Democracy is the worst form of government - except for all the rest. Personally, I'd say we have it pretty good as citizens of two long-standing, strong, democratic nations.

$$
Jefferson had a profound distrust of governmentJon Billheimer
Sep 25, 2002 8:01 AM
I totally agree with your thoughts. It wasn't my suggestion that Canada, or any other democracy, is superior to the U.S. in this respect. Which is why I included my comments about Canada. Chretien and the Liberal Party of Canada are well-known dissimulators and have done everything in their power to eviscerate the House of Commons and guarantee their hold on power through blatant patronage, bribery, and conflicts of interest. My point about the U.S. is that when it lies and manipulates to garner support for a policy, the effects are more far reaching and potentially devastating for the world than when our Prime Minister engages in perjury and petty larceny.

I guess what really incenses me is that the right wing in American politics always try to co-opt the moral high ground for themselves, invoking love of country, moral rectitude, and the support of the religious right. In my view the Bush and Reagan administrations are and were no more moral than any other administration. I see Bush as a master manipulator whose almost sole focus is on getting his own way at any cost. On top of that my perception of him is that he has no respect for America's friends and partners nor does he respect contracts and treaties. It seems that he envisions one rule for himself and his administration and another for everyone else.

There is great wisdom in Americans' preoccupation with being faithful to the principles and processes laid down in the constitution, because the means DO corrupt the ends. Quite outside the bailiwick of the constitution, however, the integrity and vitality of a democracy rest on a free and informed public. By controlling and manipulating information governments have long ago found a way to subvert manipulate the democratic process. This administration appears to be carrying this tried and true tactic to new heights.

At the end of the day is attacking Iraq the right thing to do? I really don't know, and I doubt if I will ever be privy to enough information to make an informed judgement. And that is the problem. I am reasonably certain, however, that it is important that the U.S. not embark on these military adventures unilaterally. At that point the idea of a world order functioning, at least loosely, under the rule of law becomes a complete sham, if it isn't already.
Jefferson had a profound distrust of governmentMatno
Sep 25, 2002 5:24 PM
"The Bush and Reagan administrations are and were no more moral than any other administration."

I can think of one recent administration that was significantly less moral, no matter what kind of morality you're talking about! :-)

I'm not sticking up for Bush, by the way. I think he's nearly as corrupted as any other president we've had with ties to the CFR (which is to say most of them). As a conservative, I don't feel like he's even remotely fighting for what I think is right. He occasionally takes steps in the right direction, then runs the other way when nobody seems to be looking...

Also, I think it was you who mentioned that "our little banana republic [Canada] is benign in its effects on world peace, poverty, etc." I would have to differ on that. I've been to a lot of United Nations meetings over the last 5 years, and while Canada may not make a lot of noise, it has a huge influence and is often assigned to important arbitration panels. Unfortunately, it is right up there with the Scandinavian countries as one of the most liberal influences in the international arena.
I agree with you on this oneczardonic
Sep 24, 2002 3:26 PM
Though I don't think that it boils down (completely) to cynical interest in defense sector investment.

Witness the way that the Bush administration has played the 9/11 attacks to its advantage. An administration that would surely have been plagued by questions of legitimacy and partisan resistance has enjoyed near impunity and unprecedented support with regard to a slew of questionable policies and glaring conflicts of interest.

Surely, there are many issues on which the opinion of many Americans deviates from the right-wing ideology that the President subscribes to. Why else would Gore have gotten (at least) half the votes? However, out-flanked by nationalistic fervor, those who might question the continuing missmanagement of the economy, the unnerving conviviality among administration top dogs and corrupt corporate fat cats, wrong-headed environmental policy etc. have been left no quarter.

Much as in Orwell's Oceania, the U.S goverment has learned that people are easier to manipulate when distracted by a common enemy. And as in 1984, our allies today will inevitably become our enemies tommorow (remeber when Iraq and Afghanistan were our friends?). Thus, we will celebrate one victory after another, yet never quite diminish the threat level, which must take precedence over such picayune issues as civil rights or economic prosperity. If it weren't the war on terrorism, it would be the deterence of "rogue states" (or are we back on that already?).
Well-said, Czardonic (nm)Jon Billheimer
Sep 24, 2002 3:31 PM
I agree with most of it,TJeanloz
Sep 25, 2002 1:21 PM
But I don't think you can blame Bush for mismanaging the economy. I'd like to blame Clinton, but I don't think he's culpable either. What makes the economy so bad right now is that we're finding out that it was never that good. The fundamental reasons that things are lousy have mostly to do with events that took place well before Bush took office. I can't think of a single policy Bush enacted that hurt the economy, and I also can't think of anything he could have done to help the economy. The only thing he's done is the tax cut, and it's unlikely that it's even really had an impact yet, and even more unlikely that the impact was negative.

But, as it stands, the person in office when the sh!t hits the fan is the one who comes out dirty...
True, it is not all Bush's fault. . .czardonic
Sep 25, 2002 2:31 PM
but in addition to your very valid argument about the overheated nature of our formerly "good" economy, consumer confidence (irrational though it may be) has a lot to do with our current state. I think that many of the people that Bush has put in charge of managing the economy have been far from confidence-inspiring.

Also, there is the damage that corporate fraud has done to the confidence of investors in Wall Street. The Bush administration's close ties to many of the worst offending corporations, along with his very unconvicing pledges to clean up the mess, have not helped.

As such, to the degree that any president can manage an economy, I think that Bush has failed miserably.