Profits for the Economic Club: How US Military Spending Benefits the Few
In his January 2016 State of the Union Address, President Obama smugly declared that “We spend more on our military than the next eight nations combined,” which was a startling and repulsive boast. What is less surprising is the Pentagon’s decision to refocus military spending, thus boosting profits for military industry companies.
Then on February 2 Obama’s Defence Secretary Ashton Carter gave a speech on defense affairs at the Economic Club in Washington, which is proud of the fact that it provides “a forum for prominent business and government leaders who have influenced economic and public policy both here and abroad. Members represent over 600 businesses and organizations [in Washington, DC] that are at the forefront of the private sector economy.”
Having no sense of humor, Mr Carter would fail to see the wonderful irony in choosing that location to define his priorities in national military affairs, but its significance didn’t escape the financial market’s wheeler dealers, and values of defense industry corporations received a hike all round.
In his speech Carter said that “the Pentagon plans to spend about $2 billion over the next five years to buy more Raytheon Company Tomahawk missiles and upgrade their capabilities, bringing the inventory of the missiles to above 4,000.” At midday on February 2, Raytheon shares stood at 123.47. By 4 p.m. next day they had increased to 128.07.
After his comforting chat to the Club of “prominent leaders” of military-focused commercial enterprises, Reuters reported that Mr Carter “flew to the Naval Air Weapons Station China Lake in California to get updates on new high-end weapons being developed and tested there, including precision Long Range Anti-Ship Missiles built by Lockheed Martin Corp. He said the [defense] department would spend nearly $1 billion over the next five years to buy the new missiles.”
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