War Profiteers + Obama Administration = ???


The verdict will be slow in coming. There are several things to be optimistic, shall we say, “hopeful,” about when it comes to confronting the corruption, fraud, waste, and deceit of war profiteers – and, not surprisingly, there are many reasons to doubt that we’ll see any real change after all. I am genuinely torn as to what to expect. If Obama follows through on his positive programs, life will be much more difficult for military contractors. On the other hand, however, if he succumbs to the various pressures working against him, it may mean more of the same old frustrations.

While much has been made of Obama’s choice of National Security Advisor, Marine General James L Jones (Ret.), and his connections to Chevron and Boeing as well as other controversial, “centrist” appointments, like retaining Defense Secretary Gates, I wanted to provide a handful of examples that to illustrate Obama’s potential Dr. Jekyll and/or Mr. Hyde. Here they are:


Google the following: Obama, Defense Contractors. There are many posts posing the question, “What does an Obama administration mean for my investments in defense contractors?” You’ll also find headlines saying “Military Contractors May Thrive Under Obama” and other analyses such as the forbes.com article commenting, “U.S. defense contractors thrive as well during Democratic administrations, if not better, than in Republican ones, and the… election of Barack Obama as president offers no hint of being an exception.” While news from the fall of 2008 forward should tell us to be wary of financial advisors, I’m not particularly comfortable with the fact that investment advisors are not uncomfortable about buying into military contractors.


The economic crisis. The tentacles of the military industrial complex reach into every corner of the US. Millions of Americans have jobs related to military contracting and it is not a small portion of that number that have connections to organized labor. Obama’s ties to labor may stifle any ambition he has to cut military spending. The International Association of Machinists and Aerospace Workers (IAM), for instance, is deeply engrained into the Military Industrial Congressional Complex (MICC) and has even called for a strengthening of our defense-manufacturing infrastructure. Don’t be surprised to see bigwigs from the likes of Boeing and General Dynamics going to these unions and having them put in calls to the President’s office on the company’s behalf.
This is a blessing and curse. Finally, we have a president (and labor secretary) who will actively listen to labor demands, but demands from labor organizations like IAM may inadvertently handcuff the nation to the tentacles of the MICC. Mega military contractors have no problem ruthlessly using their employees, especially union members, as gambling chips to convince their representatives in the Capitol that more contracts should be given, whether needed/requested or not.
Boeing, for example, has already played this card in reference to the KC-X tanker and C-17 cargo plane. We can also read the recent newsdaily.com report telling us that “[The Aerospace Industries Association] -- whose members include Lockheed Martin Corp, Boeing, Northrop Grumman, General Dynamics and Raytheon Co -- has begun playing up the number of jobs it creates in a bid to protect lucrative arms programs under Obama.”
This, to me, is nothing more than political blackmail – and every military contractor is willing to shamelessly wield this trump card at the drop of a hat. It is not ok to create more instruments of war simply because we need the jobs. If it’s jobs that we want, let’s invest in capital enhancing projects that will continue to stimulate our economy whether we are engaged in war or not.
The economic crisis also pushes prospects for moving away from military contractors back because the infrastructure needed to convert facilities from sword-making to ploughshare-producing does not currently exist. While in a recession, the government must spend money or risk exacerbating the problem. Obama will find it difficult to cut money and jobs from the defense sector without having explicit and immediate alternatives to invest and send the laborers to work in.


Obama has been rather wishy-washy about military contractors’ rolls in the engagements in Iraq and Afghanistan. Throughout his campaign, Obama was careful to limit his commentary on the Iraq War. His stance ultimately leaves a “residual force” in Iraq and redirects many of the troops from Iraq to Afghanistan. He has said little about maintaining mercenary forces like Blackwater or support personnel like KBR and Halliburton, although he has stated that he “will establish the legal status of contractor personnel, making possible prosecution of any abuses committed by private military contractors,” which is one step in the right direction.
Refocusing on Afghanistan means a continued and steady supply of more ammunition and even more intense wear and tear on supplies, as the terrain has proven to be as formidable a foe as the Taliban. Alliant Techsystems, the major ammunition manufacturer for US forces and Boeing, who produces JDAM, or “Smart bomb,” kits are surely licking their chops at the prospect of seven more years in Afghanistan.


Northrop Grumman (N-G) must have read my article directed to Boeing about how going green can lead to economic sustainability. N-G recently urged President-elect Obama to open up opportunities for military contractors to use their “ocean of data for practical uses,” particularly in the direction of combating climate change. That is to say that they want support in finding ways to use their long touted “spillover technology.” Now don’t expect N-G to pull out of the upcoming KC-X tanker contract rematch with Boeing, but as employees and investors see that they can be a successful and viable company outside of military contracts, they will be more prepared and inclined to shift away from military contracting completely.
That Tom Daschle, Obama’s pick for Health and Human Services secretary, as well as transition team member John Podesta held positions with the Center for American Progress (CAP) bodes well in conjunction with Northrop Grumman’s announcement. Last fall, the CAP commissioned a study by the Political Economy Research Institute at the University of Massachusetts, Amherst that ultimately demonstrated that a robust investment in a Green Economy could create jobs, cut dependence on oil, combat climate change, and be an effective economic stimulant. Let’s get Tom and John on the phone with some N-G board members and see what kind of magic can happen!

Positive Possibilities

Obama’s skepticism about missile defense, nuclear weapons, weapons in space, and future combat systems. These programs combined represent some $37.7 Billion in annual military expenditures [National Priorities Project, Economists for Peace and Security, and ArmsControlCenter.org], with huge chunks going to the biggest players in the military contracting game including Raytheon, Boeing, and Lockheed Martin, among others. To dramatically cut these programs would be to go nose to nose with the system. Obama’s success or failures in confronting these programs will become a litmus test for cutting out other wildly wasteful military programs.


Contracting Reform. In efforts to make contracting more transparent, Obama has said he “will require the Pentagon and State Department to develop a strategy for determining when contracting makes sense, rather than continually handing off governmental jobs to well-connected companies.”
He has also pledged to take on corruption and cost overruns including creating programs aimed at eliminating no-bid contracting. His administration also intends to “end the abuse of supplemental budgets by creating a system of oversight for war funds as stringent as in the regular budget.”
It also appears as though he is prepared to clean house within the contract officer corps and empower the “Justice Department to prioritize prosecutions that will punish and deter fraud, waste and abuse.” These goals are ambitiously on the right track. We should monitor his progress on following through and remind him that these priorities cannot be let go to the wayside – especially if he wants to take economic sustainability seriously.

Considering these and other pros and cons, it’s clear that Obama will not be the little orphan Annie who softens the heart of every Daddy Warbucks in America. Yet he’s certainly no Halliburton hugging Dick Cheney either. My hope and optimism lies in the fact that, with Obama, again, hopefully, he has shown a willingness to stand up to war profiteering. As activists, we can, and must, use his own words to pull him towards policies that deflate the war profiteering bubble once and for all. I don’t get the impression that he will be empowering these companies to become even more evil than they already are, but war profiteering must be aggressively taken on – and it’s not yet clear if Obama will be the actor to do that.
As the incoming president seemingly nestles into a comfortable, centrist position on many policies, the future becomes foggy - and occasionally discouraging. But every time I want to be furious with him, he pulls me back toward hope – ultimately leaving me frustratingly confused.

One thing is clear, however: our work is not done. There will be no change – nothing to believe in – unless we make it happen.

Andy Heaslet is the Coordinator of the St Louis based Peace Economy Project. http://www.PeaceEconomyProject.org

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