War and the MICC: Is It Really Profitable?
Last week I sat through a rather interminable lunch meeting at my place of employment, during which our group’s senior executive manager bemoaned the fact that our group’s utilization rate was at its lowest point in recent memory. By “utilization rate” he meant the percentage of our group currently doing billable work for paying clients. Apparently for the last few months nearly all of our Department of Defense clients have suffered drastic short-term budget cuts, leading to reduction in billable work for corporate welfare queens like my employer, which in turn leads to those low utilization rates I just mentioned.
While our executive manager did not elaborate on the cause of this reduced billability among his staff, the fact that all of his clients are taking funding cuts across the board at a time when “defense” and “homeland security” have been such hallowed concepts that one would think funding of them constitutes a sacred cow indicates that all is not well in the hallowed halls of the five-sided asylum on the Potomac. The rumor mill has begun to circulate stories of what amounts to a “war tax” being imposed on all of the various defense projects in the form of budget cuts. In other words, Bush Jong Il and his ruling elite, having bollixed everything else in this disaster of a war, couldn’t get the budget estimates right either. Surprise.
We have all heard the stories of the troops on the front lines in Iraq and Afghanistan being unable to procure sufficient armor for their vehicles. We also hear that chronic shortages of everything from food to bullets are now the norm. Since there is absolutely no way that Neoconservative America, responsible for extending George the Younger and Company’s lease on the White House for another four years, will put its collective money where its collective mouth is by anteing up additional money for our men and women in harm’s way through tax increases over the next few years, the decision has been made to “realign priorities.” What this means is that what little existing money for non-discretionary defense spending hasn’t been wasted on nugatory weaponry and boondoggle consulting programs will finally be allocated to procurement of low-tech consumables such as bullets, food, gas masks, medical supplies, and armor plating for vehicles; in other words, all the stuff that’s necessary to effectively fight a fourth-generation conflict. Better late than never, I suppose.
While this might be a good thing if you are a company that manufactures bullets, gas masks, medical supplies, or armor plating for military vehicles and who enjoys a slot on the national corporate welfare rolls, this reallocation of priorities is a very bad thing to suffer over the long term if you are in the business of manufacturing “high tech” equipment or providing “consulting” services to the DoD. For it is in precisely these areas that the biggest budget cuts must be made in order to provide the troops on the ground with what they need most. Northrup Grumman and General Dynamics, for example, stand to lose lots of money on cancelled development contracts for new fighter aircraft or nuclear attack submarines which, while no longer useful as weapons in 4GW, have made these companies very rich in the past. Other companies such as Computer Sciences Corporation, IBM, and Price Waterhouse Coopers, while perhaps more diversified in their business portfolios than the one’s I’ve just named, still depend heavily on revenues from their defense “consulting” contracts, most of which are of dubious relevance to ensuring the fighting effectiveness of the troops on the ground.
It’s rather amusing when you think of it. These companies, long dependent on the largesse of the state for their obscene profits reaped at the expense of the beleaguered American taxpayer, are being put in the position of having to come out against “supporting the troops” when it hurts their bottom line. Most of the Military-Industrial-Corporate Complex (“the MICC” as I call it) has long been accustomed to the idea that the economy not only can support guns and butter indefinitely, but can do so by manufacturing any and all kinds of gun, no matter what the cost or whether or not there is a real market for them. The idea that certain brands of gun are both superfluous and unaffordable is both incomprehensible and terrifying. If the welfare-warfare establishment of which they are so deeply a part and which promised nearly unlimited funding for the indefinite future has suddenly become vulnerable to the vagaries of the real economic world, the result will be deep trouble. These firms may not only have to become truly “lean and mean” like their private-sector counterparts, but may actually have to start producing quality work products on time and within a reasonable budget. I suspect, based on direct personal observations within several of these corporate monoliths, that few of them are equipped to operate this way and that market forces would reduce their number with brutal efficiency.This is, of course, exactly what such firms are afraid of and will stop at nothing to prevent it from happening. I predict that if current trends in defense budgetary prioritization continue, the “Food Stamp Fifty” (as I refer to the fifty largest corporate welfare queens currently subsisting on and indirectly controlling the purse strings of the federal government) will pull out all stops in Congress and apply every type of pressure possible to reverse this trend, even if it means denying the combat troops in the Middle East essential material support. Sorry, but expensive pork is simply too vital to the economic well-being of too many key “red” states to let unprofitable activities like a low-tech war stand in the way.
In closing I will admit that, cynical as this sounds, it gives me no end of pleasure to witness the MICC falling prey to the Achilles heal of the very system it has been cheerleading and benefiting from since the end of World War II.