With the economy tanking, unemployment growing, businesses going under, and whole segments of the economy in crisis, automotive, banking, retail sales, etc., I am happy to report that one area is still prospering. Under Democrats or Republicans, in good times or bad, in peace time or war time, this area will never lack in profit making. It is of course the Military-Industrial Complex. The headline in the 1-30-09 Wall Street Journal says it all: “Military Contractors Expect to Avoid Defense-Spending Cuts”, by August Cole.
Cole writes, “Even as companies across the U.S. are laying off thousands of workers, defense (sic) companies expect to maintain much of the momentum they built up during the Bush administration’s sharp increase in weapons spending.” There is never a slack in demand for war and killing, no matter who runs the good old USA.
The warlords are gambling that Obama won’t cut any weapons programs (lets hope they are wrong) since “they are propping up” employment and manufacturing. Manufacturing plants that make useful items that people really need are closing, but plants making weapons are still doing well. The WSJ reports that RAYTHEON and L-3 COMMUNICATIONS HOLDINGS have no plans to lay off workers (73 and 64 thousand people respectively). LOCKHEED MARTIN had “the best year” ever in 2008.
But the good times may not last. The economic collapse will sooner or later begin to impinge on the defense budget. But this may only concern new programs. There are plenty of meaty programs in the pipeline to feed the beast for years to come. General Dynamics CEO Nicholas Chabraja says, “I can’t imagine, based on the rumblings I’ve heard or the situation in the economy, that they’re going to be looking to cut in-production programs.” BOEING alone has $73 billion dollars in back logged contracts to feast upon. LOCKHEED is looking forward to its share of the $300 billion coming down the line for the new F-35 fighter.
So it’s nice to know we have a prospering sector of the U.S. economy. Now if only the government would close it down and spend all that money on people friendly useful programs we could really be happy.