Posts in: May 16th, 2015

The Military-Industrial Complex: Deceptively Simple

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”
— President Dwight D. Eisenhower, January 17, 1961

“How do we protect not just the freedom the Internet affords and the new opportunities to advance human welfare that technology enables, but also our country, our future, our children, our people?

“And the key, in my mind, is to ensure an alignment between a defense that leverages our strengths—like our robust and independent business and academic communities—and that reflects our nation’s values and longstanding traditions…and a defense that is effective in a changing world.

“How to align all that, and how we achieve that alignment isn’t new. We find the alignment in open partnership…by working together.”
— Secretary of “Defense” Ash Carter, April 23, 2015

In 1901, Frank Norris’s novel The Octopus: A Story of California used the image of the tentacled sea creature as a metaphor for Southern Pacific—itself a symbol of industry in general—is as simple as Norris’s political views: as soon as the railroad monopoly, then one of the most important industrial forces in the country, came to town, its tentacles stretched across every aspect of life. Nobody could escape its corrupt clutches.

Like many writers of his time—and, frankly, like many writers of today—he saw the systemic problems, he saw the complexities, but he failed to grasp a clear solution. Ragingly anti-Semitic (the villainous S. Behrman is a composite of real men who were all as Christian as the day is long, but because he’s the Southern Pacific’s sole financial wizard, why not make him Jewish?), imperialistic, and socialistic, Norris’s novels try their damnedest to portray the American experience with objectivity and complexity, but they’re skewed toward his personal politics and feelings. I don’t fault him for writing what he believes, even though I disagree with that. I do, however, fault him for missing the point:

“Private” corporations can’t buy their way into government-upheld monopolies without the consent of government officials.

Who takes the bribe that allows monopoly to flourish? The government official. Who employs police (and sometimes military) to protect the monopoly? The government official. Who arbitrates and rules on court cases between the monopoly and a private citizen? The government official. Who, ultimately, rejects any semblance of integrity, honesty, and objectivity in order to be “in the pocket” of the monopoly? The government official.

A monopoly cannot exist without a government willing to receive payment to protect its survival. Teddy Roosevelt’s trust-busting paid lip service to citizens’ concerns about industry gaining too much power over the people, but it did little to mitigate industry’s power over the government. The first two decades of the twentieth century taught politicians that they needed to do a better job of hiding their complicity in the increasing “corporatism” of the United States, without actually doing much to alter it. They had to make the monopolies less obvious, ironically by using tactics pioneered by the railroads: shady holding companies, which traced back to the same group of wealthy owners, held as subsidiaries numerous rail companies, building companies, supply companies, engineering companies. They feigned competition to present a veneer of non-monopolistic behavior. When one company fell out of favor—as Central Pacific did, rather quickly—the Southern Pacific made a grand show of “absorbing” it, even though they were technically already part of the same holding company owned by the same group of individuals, who got even richer through this demonstration of business savvy.

The Depression, rightly, created a huge amount of distrust between industry and individual. When workers relied on somebody else for their livelihood, put up with a bunch of bullshit just to eke out that living, and then had the rug pulled out from under them because a handful of rich people did a handful of rich things that tanked the American economy in an instant…of course they’re going to blame their employers, and industry, and even the wealthy to some degree. (I say “to some degree” because I’m fairly convinced, by the popular entertainment during the Depression and the enduring popularity of “old money” FDR, that there was less animosity toward the rich then than there was in the crash of 2008; I think, with no real research to back me up, this might be a result of having a much more rigidly defined class system at the time. Old Money, East Coast elites were fine; it was the damn nouveau riche who fucked it all up.)

When Milton Friedman—who worked with the FDR administration on New Deal policy—and Anna J. Schwartz researched their ambitious, almost century-spanning economic history of the United States (from 1867-1960), they discovered what really caused the Depression—exacerbating what would have merely been a bad but short-lived recession—was the Federal Reserve’s poor policy decisions. That was more than thirty years after Black Tuesday. In 2002, Ben Bernanke (who would chair the Fed from 2006 to 2014) said in no uncertain terms: “Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” Whoops.

Throughout my relatively short life, I’ve become acutely aware of economic bubbles. In trying to understand why our benevolent government would allow such obvious, short-sighted cycles persist, I came to realize a very startling fact: the bubbles exist because the government wills it. The bubbles burst because they’re naturally short-lived, nobody in government is smart enough to look any further down the road than the next election; everybody in the financial industry—regardless of what they think about the bubble, if even they are smart enough to see it—wants to take advantage of easy, “cheap” money; and the clients served by financial institutions are looking for a scheme that’ll get them rich—and quick! A high school student with a C average can figure that out (I know, because I did).

Think of the Dust Bowl. Everyone remembers the benevolence of FDR, doing everything he possibly could to help the farmers ravaged by poor weather conditions. What few think about is that the “wheat boom” that created the Dust Bowl…was also created by that same benevolent government, which two decades earlier had artificially doubled the price of wheat to encourage speculators to buy land in the strip spanning Oklahoma, Kansas, Colorado, and Texas, where amber waves of grain seemed to grow as if by magic…until they didn’t.

That is the boom-and-bust cycle: government, without any semblance of forward thinking, takes an action; private industry (and the individual) capitalizes on it; a huge yet obvious problem bursts the bubble; and government is left to solve the problem, indirectly hurting more people and spending more money than if they had simply not tampered in the economy to begin with. The cycle repeats when, in their desperation to please the people (by which I mean “win reelection”), they create the next bubble through incentivizing: lower interest rates, tax cuts, “partnerships” with government institutions, massive bailouts—all to ensure the initial success of the next short-lived bubble.

But there is one government-created boom that has not yet busted, and not for a lack of trying: the military-industrial complex. The most insidious, pervasive octopus in the history of the country continues to grow in spite of itself, for one simple reason: unlike the more short-sighted economic bubbles, the U.S. will never run out of wars to make up and then go fight.

If the Fed is what got us into the Depression, it was the military-industrial complex that got us out. FDR’s New Deal policies loosened the economic jar, allowing government and private industry to collude and “partner” at an unprecedented scale. And yes, this collusion scaled back after World War II—but not at all to pre-war levels. Eisenhower, quoted many paragraphs ago, was one of only nine five-star generals in the history of this country. He spent his entire career in the military before being elected the country’s commander-in-chief. At the end of nearly fifty years of military service, he warned us of the greatest economic danger in the history of this country.

Nobody acted. People listened, yes. His farewell address became a famous statement on problems like government overreach, public-private circle-jerks, and the continued problem of the government putting all its eggs in the wrong economic basket. But just like trust-busting, the only noticeable effect the speech had was on increasing secrecy in the military and intelligence communities: what kind of money they got, and how it was spent. Over time, these secrets have become public information—but still, nothing is done to stem the tide. Nothing changes, other than marginal increases and decreases in the overall military budget.

The tangled tentacles of the military-industrial complex cover every aspect of industry and society. It’s the one unofficial monopoly the government is allowed to have, because it’s shockingly easy to shut down even the most passionate anti-military arguments: “You’d put your political ideology ahead of the safety of Americans?” “Defense” money can be funneled to all sectors of the economy; even the fucking entertainment business leases actual equipment from the actual military, engages actual soldiers and officers as actual consultants, and creates war movies to excite and glorify American military prowess.

There is not an aspect of the economy untouched by military-industrial complex dollars. As the rube-like economist William Lazonick accurately observes, private industry indirectly benefits from military research and innovation. It’s not a conspiracy theory to say that any job you can name, there’s a chance a part of it traces back to indirect military-industrial complex money. You don’t have to be working for Lockheed-Martin for it to impact you.

The iron bubble of the military-industrial complex can only be penetrated by the fantasy of world peace. If the economy’s flagging, a new threat and a new war will lead to an uptick of dollars pumped into the “private” economy to keep us afloat. Don’t be fooled again: the U.S. pulled out of the recession of 2008 by way of the military-industrial complex (we’re only this year returning to the level spent in 2007, before the collapse), not the cheery “shovel-ready” projects that put America back to work. It is an endless cash cow that keeps on giving: every bullet fired, grenade hurled, installation blowed up, plane crashed—all of it requires more spending, to replace what was destroyed and to find and build new means of destruction. All of it requires “private industry” to contract for government dollars, which is a strong incentive to make sure a strong “defense” is constantly necessary.

This country has done a great job of guaranteeing that, starting with the Soviet Union. The Red Menace seemed to be a real threat, especially after battling the Nazis—who took a similar statist ideology to its grotesque logical extension, giving us an idea of exactly what we might have been up against if the Soviets had taken over Europe as Hitler had planned to—so it seemed reasonable to fear that if we fell behind scientifically and militarily (as the whole of Europe had), we wouldn’t be able to fight them overseas or at home. Eventually, all the money spent just stopped making sense, but the spending itself didn’t stop.

Luckily, the Soviets’ last gasp at relevance also created a hotbed for our next major threat: terr’ists. Lawrence Wright’s book The Looming Tower presents a harrowing portrait of the ways in which the USSR and the USA secretly (and not-so-secretly) tampered in the affairs of countries like Afghanistan and Saudi Arabia led to September 11th and the current freak show in the Middle East.

Now, I’m not accusing 9/11 of being America’s fault, or an attack we deserved, which as far as I’m concerned would be tantamount to suggesting that 12-year-old Yemeni girls deserve to be kidnapped and married off as ISIS sex slaves: the fact that religious nutjobs make non-religious excuses for their religiously motivated behavior doesn’t mean anyone deserves their vile attacks. A 100% fair, 50/50 oil deal transformed Saudi Arabia from a poor backwater into a rich country filled with modern luxuries; the fact that they have internal squabbles about conspiracies of western imperialism, and the result is that some have used the wealth that would not have been possible without us, against us—that isn’t an indictment of capitalism, the American way, or American hypocrisy. It just makes some Saudis—probably a lot, given the influence of Wahhabism—fucking assholes, and the only thing worse than an asshole with a lot of money to literally burn is an asshole with nothing. As Bob Dylan so cheerfully put it, “When you’ve got nothing, you’ve got nothing to lose.”

Rather, what I’m saying is that our tampering in others’ affairs creates a climate that allows them to feel justified in blaming us for their problems. It emboldens them to take action against those they blame, which gives us justification to spend money fighting back. No, I’m not saying 9/11 was an inside job, either; I’m saying the entire global infrastructure of American military and intelligence operations—which was borne of a desire to protect “our” interests abroad—has had a “positive” side effect: pissing some people off enough to lash out against us. Once the assholes in the Middle East cool it, surely some other angry ethnic group will come after us, and the cycle will repeat. The U.S. constantly sticks its nose where it doesn’t belong, is not wanted, and is ultimately resented for the perception (often truthful, sometimes paranoia) that we’re out to take over their countries and steal from them.

I think that, beginning in the 1950s, American interference abroad had shifted from the open racism (a need to spread democracy and Christianity to backward savages—by force, if necessary) of the first half of the twentieth century to a genuine but wholly misguided desire to prevent the spread of communism and endorse the spread of democracy and capitalism. The results have repeatedly blown up in our faces. I don’t think it was a consciously engineered effect. I’m sure this has been noticed by the powers that be and used as a means to remain in perpetual conflict—if we can’t manage perpetual all-out warfare—in order to justify spending more and more on military might.

The question is, how do we stop this?

If the military-industrial octopus controls so much of the American economy, the simple act of scaling back our military would have a devastating effect—and we wouldn’t have a military-industrial complex to prop us back up! At this point, I have to imagine every new President—maybe even every new Congressperson and Senator—has a secret meeting upon inauguration where they’re told, “The most we can scale back the military budget is 15%; otherwise, the whole house of cards is going to collapse.” So when it comes time to consider doing the right thing, which is separating the conjoined monsters so they can roam about Valkenvania in peace, a politician will do the bare minimum to appease his or her base—and luckily, one of the two parties loves raising military spending!

Part of what makes the military-industrial complex seem so…well, complicated, is the fact that there’s so much at stake. To change would mean mass unemployment, large companies going under very quickly, and the uncomfortable malaise that comes from having to carve out a new economic path.

In a rare switch from what I’d say under ordinary circumstances (for the military-industrial complex is far from ordinary), here is what I would suggest:

Drastically reduce the money spent annually on Research & Development & Testing & Evaluation & Procurement & Construction. Put it into a fund for unemployment insurance. This massive pool of money will pay 90% of the salary and benefits to any directly affected unemployed worker from a former “defense” contractor that has issued mass layoffs/firings of the proletariat, for a period of three years. If they can’t find a new job in three years, they’re on their own.

Over the ten years following this three-year grace period, shrink the military budget dramatically. I would even go so far as to recommend a Constitutional amendment, to prevent this from ever happening again, that would limit the total annual “defense” budget to a maximum of 1% of GDP in peacetime, with a ceiling of 5% of GDP if and only if we are in an official, Congressionally authorized war—and even then, only allowed in the form of bonds payable. Yes, we need to go back to the age of war bond rallies, because a full-scale war is unacceptable without the American people willing to pay for it—fully and directly.

To give you a frame of reference, the projected GDP for 2015 is around $18 trillion. One percent would give us an annual “defense” budget of $180 billion; five percent would give us a “defense” budget of $900 billion. The current “defense” budget is allegedly $630 billion. I’m not exactly being stingy by allowing a range 1% to 5%. The U.S. notoriously, up until last year, has consistently spent more by itself than the next nine countries combined (now, we only spend more than the next eight countries combined); we also notoriously have 4% of the world population while spending 40% of what the world does on “defense.” Even at 1% of GDP, we would still spend more than China, who has long been a distant second.

Unemployment insurance for layoffs will help, but they won’t solve the entire economic problem. Companies will go out of business. Investors will be hurt. Non-“defense”-contractor companies who abandoned R&D to rely on military innovations getting passed along to the private sector will have to find a new one, spend more money, and it’ll hurt them, too (but their laid-off workers won’t benefit from the special unemployment fund; they’ll be subject to the standard unemployment insurance for their state). Maybe I should worry more about this aspect, but I don’t. The funny thing about the profit motive is, it’s a real incentive to get people to figure out how to make money again. Private R&D will come back.

At this point, you’re saying, “Wait! You’re saying give the proletariat rabble unemployment, and let all the corporations go out of business? What kind of crazy commie talk is this? What would Ayn Rand think?”

This is not commie talk. Free markets are free. The military-industrial complex is not; it’s the sneakiest form of socialism this country has ever seen, with our government fraudulently using the auspices of “private partnerships” to control the means of production for the “public good.” So fuck any and all “defense” contractors, and any and all non-“defense” companies drafting in the wake of the complex, that cannot survive without suckling the teat of the octopus. (Do octopi have teats?) After I’m done with them, they’ll have the same choice any American company should: adapt or die. If they die, good fucking riddance; if they figure out how to adapt, bully for them. I don’t care about them one way or the other.

But I care about the workers, in this case, because while I generally believe we’re all on our own, and that’s the way it should be, and I’m fairly unsympathetic to workers in a free society demanding higher pay instead of looking for another job or claiming we’re all under the thumb of Big Business and the solution to the problem is Big Government, this is a special circumstance: it’s Big Government that fucked these workers, not their former employers. So, in the infinite benevolence I keep hearing about, it must be the government’s responsibility to keep these (former) workers out of poverty, for a time, because that’s the right thing to do. (The fact that their regular paycheck from Uncle Sam will keep them from losing their homes and further eroding the economy doesn’t hurt, either.)

That’s what I would consider doing. We face a problem that seems complicated, but it’s really quite simple. So is the solution. What holds us back are politicians who, if pressed, would deny that this is a problem at all.

“Defense” Secretary Ash Carter is one of them. In his very, very, very long speech at Stanford a few weeks ago, he claimed to speak on behalf of the President when he spoke repeatedly of all the great, wonderful benefits of a partnership between the military-industrial money spigot and Silicon Valley. As you may know, Silicon Valley already benefits a fair amount from “defense”—those advanced weapons and drones weren’t created by wizards—but he’s talking more and more and more and more, and he’s pitching it as a great thing.

That’s a sign of things to come. What is required to eliminate the military-industrial complex from our country once and for all is a President with both the integrity and the far-sighted vision to do the right thing for the country, even if it’s the “wrong thing” for a short-lived presidency. Eisenhower, in warning us, came closest to doing the right thing—and at a time when it would have been a teensy bit easier to cram the genie back into the bottle.

But he didn’t do the right thing. No President has. No member of Congress or Supreme Court Justice has. With comments like Carter’s, I have a sinking feeling nobody ever will.

I suppose I’ll just keep on not voting, thanks.

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