On the American Military-Industrial Complex

A democratic republic affords many avenues for organized private interests to influence public policy. The fact that such interests are organized is enough to outweigh the influenced of an organized constituency. Add in the money available to organized interests and the imbalance is exaggerated. The military industrial complex—the “informal” alliance between a military and private defense-contractors is a case in point in the United States.

At the end of his second term in 1961, President Eisenhower warned the American people of the abuses of power that can come from the military’s alliance with its defense-contractors. The influence of the alliance, in other words, could come to trump the influence of the electorate and what is in the best interests of the United States in the world. After World War II, a permanent armaments industry emerged; the president was concerned that its influence would grow too much. He said, “We must guard against the acquisition of unwarranted influence. . . . The potential for the disastrous rise of misplaced power exists and will persist.”[1] Once such power exists, it can protect itself even from threats from the electorate. Such protection can be explicit, as in efforts to keep the U.S. in a war, such as those in Afghanistan and Iraq, which were quite long ones.

Roughly sixty years after Eisenhower’s farewell speech, President Trump publicly claimed that the U.S. military seeks to do the bidding of the defense contractors.[2] Such an open admission was itself startling, for the president was telling the electorate that private companies effectively control defense policy. The interests of such companies are private, and thus partial, rather than being identical to the public good, which a republic’s government is supposed to enact and protect. Where a few strong interests, whether that of the financial sector or defense contractors, can control elected representatives, a democracy can actually be a mere gloss for the books. A republic is thus vulnerable.

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1. “President Eisenhower Warns of Military-Industrial Complex,” History.com, November 16, 2009.
2. Maeve Reston, “Trump Presses On after Rough Week with His Presidential Image in Shambles,” CNN.com, September 12, 2020.

Canada Takes On the United States: A Case of Two Empires?

Two centuries after the War of 1812, the Canadian government sought to commemorate the “fact” that Canada had thwarted the invasion of troops of the American republics to the south.  “Two hundred years ago, the United States invaded our territory,” a narrator says over dark images and ominous music in the government’s ad. “But we defended our land; we stood side by side and won the fight for Canada.” However, the New York Times points out that “because Canada did not become a nation until 1867, the War of 1812 was actually a battle between the young United States and Britain.” The fight was not for Canada because the British troops were fighting for the British empire rather than for colonies in what is now Canada.

                                         The British are coming! A British hero in "Upper Canada."         rpsc.org

The real question is why the young American empire sought to take on the British empire--an empire within taking on the seat of the larger empire (as if an empire, the United Colonies,being in an empire makes sense and is durable).

The other correction that comes with shifting the question to why a young empire would challenge an older and larger one involves the distinction between a colony, state or host kingdom on the one hand and an empire thereof on the other. In the case of the American colonies, a very large one (e.g., Virginia) as well as several of them in an informal group (e.g., New England) and even the United Colonies of North America as a whole were referred to as an empire. By the time of the American independence, the term empire was generally applied on both sides of the Atlantic to both the U.S. (and, hitherto, to The United Colonies) and the British empire. In contrast, the few colonies north of that American “empire within an empire” were not viewed as an empire, but, rather, as a colony (or a few?) of the British empire. 
In the context of the meaning of empire as the political unit just above that of many kingdom-level polities (including colonies as such polities) of sufficient scale, a few colonies must surely fall short. Even in the twenty-first century, the amount of usable land and the population of Canada (34 million in 2011—only a few million more than California’s population) is equivalent to one of the large states in the U.S. To be sure, the cultural differences between Quebec and Newfoundland, for instance, are of such magnitude to rival those from province to province in an empire, but the scale and number of Canadian provinces wherein the respective cultures are markedly unique are not sufficient for Canada itself to be considered to be on the empire-level alongside the U.S., E.U., China, India, and Russia (at least not until global warming renders much of Northern Canada habitable such that the population and number of states in Canada increase dramatically).

Accordingly, the U.S.'s Articles of Confederation allowed for Canada to enter the Union as a state. To be sure, the ten Canadian provinces (and three territories) could join the U.S. as a few medium-sized member-states rather than altogether as one big like  California. Either way, it would not be a case of two empires uniting. No European would say that Turkey joining the E.U. would be a merger of two empires. “That would be like Mexico becoming a state in the U.S.,” a European official once put the matter to me. That is to say, the “United States of” Mexico would translate into one big state (or a few smaller ones) rather than as another United States of America. 

There is thus a category mistake in the following statement by James Moore, who as minister of Canadian heritage was in charge of the advertising (or propaganda) campaign on the War of 1812. “Canada was invaded, the invasion was repelled and we endured, but we endured in partnership with the United States,” he said. The British Empire was invaded, and the accession of Canada would not be a matter of partnership. To take a few maple leaves and consider them to be commensurate to a branch is to make a category mistake that cannot but lead to erroneous conclusions.

Source:

Ian Austen, “Canada Puts Spotlight on War of 1812, With U.S. as Villain,” The New York Times, October 8, 2012.

See also, British Colonies Forge an American Empire, by Skip Worden. 

On Democratic Accountability in a Republic: The Pentagon Papers

The publication of portions of the Pentagon Papers despite President Nixon’s threats of treason highlighted the fact that four presidents successively lied to the American People on build-up of U.S. involvement in Indochina (most notably, Vietnam) and the Nixon administration lied on the prospects for victory in the Vietnam War—a war that had not even been declared by Congress. Clearly, democratic accountable extends to foreign policy at least in broad outline, such as in whether or not to continue an active engagement militarily in another region of the world. Even in U.S. presidents being able to get away with effectively declaring war even as one of their roles is that of commander-in-chief—a huge conflict of interest!—democratic accountability by the popular sovereign, the People—is important, even vital should the legislative and judicial branches fail as checks in the separation-of-powers feature of the U.S. Constitution.

The first article in the New York Times reported that the Truman, Eisenhower, Kennedy, and Johnson administrations “built up the American political, military and psychological stakes in Indochina, often more deeply than they realized at the time, with large‐scale military equipment to the French in 1950; with acts of sabotage and terror warfare against North Vietnam beginning in 1954; with moves that encouraged and abetted the overthrow of President Ngo Dinh Diem of South Vietnam in 1963; with plans, pledges and threats of further action that sprang to life in the Tonkin Gulf clashes in August, 1964; with the careful preparation of public opinion for the years of open warfare that were to follow; and with the calculation in 1965, as the planes and troops were openly committed to sustained combat, that neither accommodation inside South Vietnam nor early negotiations with North Vietnam would achieve the desired result.”[1]

Meanwhile, the American electorate was being kept in the dark—lied to—in spite of the fact that the People in a republic are tasked with holding the elected representatives and their respective appointees accountable.

“The Pentagon study also ranges beyond such historical judgments. It suggests that the predominant American interest was at first containment of Communism and later the defense of the power, influence and prestige of the United States, in both stages irrespective of conditions in Vietnam.”[2] The U.S. Government’s defense of the escalation, however, was limited to the containment of Communism such that it would not take over the world as Marx had foretold and thus threaten even the U.S. itself. During the Johnson and Nixon administrations, American troops were being killed and taken prisoner increasingly for the prestige of the United States and irrespective of the intractable conditions on the ground in Vietnam. Crucially, these administrations kept the American people in the dark on these points, such that no electoral correction could be effected. Ironically, the administrations were claiming to protect democracy even as they were undermining it by using power to subvert democratic accountability by the popular sovereign (i.e., the electorate).

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1. Neil Sheehan, “Vietnam Archive: Pentagon Study Traces 3 Decades of Growing U.S. Involvement,” The New York Times, June 13, 1971.

2. Ibid.

Exaggeration on the U.S. Economy “Going Over the Cliff” after the Financial Crisis of 2008

As the U.S. Government faced down its own deadline in 2012 before the Bush tax cuts would expire and across-the-board budget cuts would commence, the Federal Reserve, which had been struggling to prop up the economy by buying bonds and keeping interest rates low, would, according to the Chairman, Ben Bernanke, be largely powerless to do more in the face of a recessionary policy on taxes and spending. "We cannot offset the full impact of the fiscal cliff," he said of the Fed. "It's just too big." That he had written a doctoral dissertation on the Great Depression and had specialized on it as a professor at Princeton lends a lot of weight to his judgment on the matter. However, he had also managed to be re-appointed to the Fed and thus knew how to play the game. In the case of the automatic budget cuts, major power-brokers, specifically in the military industrial complex, had a lot riding on Congress and the White House making a deal that would obviate the cuts in defense spending. The chairman of the Fed could have been carrying their water.

Ben Bernanke, Chairman of the Federal Reserve, in front of the lights.   Reuters

In September 2012, Bernanke had announced an open-ended mortgage-backed-security purchasing program that would put $40 billion a month into the economy. At the time, he said, “If we do not see substantial improvement in the outlook for the labor market, we will continue the MBS purchase program, undertake additional asset purchases, and employ our policy tools as appropriate until we do. We will be looking for the sort of broad-based growth in jobs and economic activity that generally signal sustained improvement in labor market conditions and declining unemployment.” Presumably the Fed would continue the mortgage-bond purchases were the automatic budget cuts and end of the Bush tax breaks to forestall a “broad-based growth in jobs and economic activity.”

In terms of economic impact, a stimulus of $40 billion a month, or $480 billion annually, would just about match the anticipated $500 billion hit from the “cliff.” How is it then, that the latter is “just too big”? Were the $480 billion insufficient, the Fed would be free to increase its purchases.  Time magazine describes the stimulus mechanism as follows: “Open-ended purchases of mortgages will have the effect of lowering interest rates, helping more people qualify for mortgages or refinance. But more importantly it will — in theory — have the effect of creating an expectation of generally higher asset prices in the future, which will motivate people to get off their duffs and spend money now. If companies and individuals are indeed convinced that prices will rise in the future, that would encourage them to spend, hire, and jump-start the economy out of its chronic underperformance.” Whereas monetary policy was contracted in response to the Great Depression, the scholar of that mistake could presumably do the opposite should we—in his words, “go over the cliff.” His $480 billion mountain of money could turn his $500 billion cliff into a mere bump.

To be sure, purchasing mortgage-bonds can only do so much. As David Dayen of Firedoglake argues, there’s only so much the lifting of asset prices can do without appropriate fiscal policy to accompany it: “(Y)ou have to question the role of monetary actions by themselves to generate an economic boost, especially at this time. Lower mortgage rates may or may not prove helpful . . . without fiscal stimulus and a reversal of the current trajectory of deficit reduction, we will never get to the desired trend for growth.” However, the Fed could presumably buy up more than mortgage-bonds, freeing banks up to lend more in the process.

Most telling is Bernanke’s claim that the Fed could not increase its stimulus enough to counter the anticipated $500 billion hit from sequestration and the end of the Bush tax breaks—and yet the Fed was already on record that it would spend $480 billion in 2013 unless the economy improved in the meantime. His inflexibility seems arbitrary, or dogmatic, in other words, given what the Fed can do, and this leads me to the alternative explanation that the chairman was actually doing someone else’s bidding rather than proffering a judgment steeped in decades of study. The real task would be one of locating the real power-brokers whose financial interests were so threatened.

Whereas the expiration of the Bush tax cuts and cutting entitlement programs had been perennially on the block for years, the sacred-cow of defense spending was all of a sudden susceptible as well. Hence, I believe, all the dire doomsday warnings coming out of Washington to the contrary, the pressure on a political deal was oriented to protecting the status quo of the military-industrial complex rather than obviating certain economic collapse. That is, even more fundamental than the interest of politicians and the media to over-dramatize “going over the cliff” in order to gain attention, the subterranean financial interest of the American military-industrial complex may have been pulling many strings—many puppets—to veer the debate toward a deal. Even as the major players on stage were posturing, a two-step could have been going on behind the scenes—dancing around the sacred cows. Perhaps the real news behind the Bernanke’s warning is that even the “non-politicized” central bank was “doing the dance.”

Sources:

John Cushman, “To Bernanke, ‘Cliff’ Says It All” The New York Times, December 12, 2012.

Christopher Matthews, “Ben Bernanke’s Heavy Artillery: Will Open-Ended Bond Buying Drive Down Unemployment?” Time, September 14, 2012.

Honeywell’s David Cote: Carrying the Water in Washington

In the midst of the talks in Washington in 2012 to avoid the so-called fiscal “cliff” with a bipartisan deal, the Wall Street Journal reported that David Cote, the CEO of Honeywell, a $48 billion “industrial giant,” was at the time “the business executive most in the middle of the fiscal-cliff debate.” The Senate Finance Committee Chairman Max Baucus (D., Mont.) said, "People on both sides of the aisle are sending messages through Dave. He's become an active participant.” For a sitting CEO to have ensconced himself so deeply among the power-players in Washington did not come controversy-free. Even though his company had a vested interest that a deal be reached, the matter of his involvement raises larger implications, positive as well as negative.

David Cote, CEO of Honeywell. Civic duty or getting "his people" back in line in Washington?       Bloomberg News

 "I'm being accused of all kinds of nefarious motives just because I'm a CEO," Cote claimed. He also conceded his cause diverts a lot of time from his job but says he tries to make it up from his personal time. In any case, "the best for my shareholders is a robust economy," he explained, "which can't happen if the country is gridlocked over debt." True enough—a rising tide benefits all boats. However, as the Wall Street Journal points out, “Cote's efforts could benefit his business. Absent a cliff deal, deep cuts in federal spending on defense and many other programs will kick in. Success in averting them could help Honeywell, an aerospace and defense contractor that draws 10% of its $38 billion in annual sales from the government.” This point could not have been lost on the CEO. Honeywell’s stockholders were not volunteering their CEO in a sort of civic duty or good “corporate citizenship.”

Moreover, that the CEO of a major defense contractor was spending so much of his time as a go-between in Washington so a deal that would obviate automatic cuts including defense spending might have a better chance of being reached by Republican and Democratic leaders points to the depth of interest by the military-industrial complex in the task. I would not be surprised to learn that various government officials, including the Federal Reserve chairman, Ben Bernanke, were not themselves “carrying the water” for the government-dependent sector in stirring up doomsday predictions lest a deal not be reached in time to avoid “falling off the cliff.” Besides influencing the debate itself through ads and other, less transparent means, the sector with the most to lose was “bucking up” to keep the defense contracts coming. From this standpoint, it is surprising that Washington’s political elite had not fallen into line and come up with a deal by November.

“We’re not confident that our guys can govern anymore,” Cote observed as he was carrying messages between Republican Congressional leaders and the White House. While this observation could be oriented to the lack of responsiveness to the “sway” of the military-industrial complex in the halls of power, he said his role as political-deal-facilitator has been a "revelation” on how dysfunctional Washington had become simply in terms of being able to get along. "I meet people on both sides I like and find reasonable,” he said, “but they aren't working together." This is particularly significant, given the interest of the complex that a deal be reached. Might it be that ideological differences on government (or even immaturity) can actually bristle at, or even resist the power of money in Washington?

For instance, has ideology in the Republican Party on the role of government in the economy gone against the interests of Wall Street or corporate America, or is the ideology effectively a reflection of the whatever that base determines is its rightful interest? I suspect that there was no way that Republican leaders were going to let a deal slip by, even given the appearances to the contrary in the meantime as the leaders sought to get better terms by waiting until the last possible moment to seal a deal. However, were such a resolution “in the cards” given the underlying “marching orders,” why would Honeywell’s CEO have been spending so much time “carrying the water” in Washington?

That there might have actually even been a chance that the military-industrial complex could be subject to budget cuts is amazing, considering the power of money in the United States. Put another way, why would a man whose total direct compensation in 2011 was $25 million and whose retirement package assets were at $78 million feel the need to carry anyone’s water—especially given that his “Fix the Debt” non-profit had raised $43 by mid-December 2012 and could unleash television ads against “dysfunctional” elected officials who had not “gotten the message.” Something is really up when a real insider feels compelled to get so explicitly and personally involved—even given Honeywell’s financial interest that a deal be reached.

In short, there are wider implications for David Cote’s involvement amid the political class in Washington. His own, his company’s, and his sector’s financial interests notwithstanding, that a person of his stature would roll up his sleeves and get to work in “dysfunctional” Washington suggests that he is exactly the sort of person to who the American Founders would have called on to serve his country out of a sense of civic duty. Even as Obama was being urged to put Cote in his cabinet as Treasury or Commerce secretary, the CEO was saying, "I can't wait to get out of here and back to my day job." This sentiment, rather than a desire to run for office, should be “just the ticket” needed for admission to a fixed term of “duty” in Washington—then freedom. This is what citizenship means—realistically in the context of even vested interests. Even as Cote doubtless had his in mind, he was also going beyond the pale as a CEO actively working to craft a deal in at the highest level of the U.S. Government.

To be sure, David Cote could have been a rare snapshot of the military-industrial complex getting  "its people" back into line in a Washington "unhinged" from its real principals. However, it could also be that the man deserves a lot of credit for stepping up to the plate in a ballpark not typically frequented by CEOs not only to protect his company, but also to tackle the systemic imbalance evinced in a public federal debt of over $16 trillion at the time. If so, the President would have been well advised to use him well—rather than too much—out of respect for the man’s public service. A restoration of the civic duty of citizenship can indeed be distinguished from the threat of plutocracy to a republic.

Source:

Monica Langley, “Honeywell CEO in the Middleof Fiscal Cliff Standoff,” The Wall Street Journal, December 13, 2012.

Military Sacred Cows: A Matter of Contrived Camulflage

"The most significant threat to our national security is our debt."

Micheal Mullen, Jount Chiefs of Staff Chairman, August, 2010.

The defense budget in 2010--$664 billion (not counting the Iraq and Afghanistan wars)--equalled that of the rest of the world combined.  One dollar of every five spent by the U.S. Government was for defense. The amount spent represents 80% growth since 2000. Why?  One reason: the big weapon systems oriented to fighting other empires (e.g., Russia and China). For example, $600 million for the littoral combat ship and $13 billion for amphibious landing vehicles (whose purpose has even been questioned by Sec. of Defense William Gates).  It would seem that the military contractors--the military industrial complex, moreover--are firmly entrenched and in control. That is to say, the defense spending is indicative of the influence of big business over government in the United States.  That this influence goes unhampered may tell us something about the leanings of our societal norms.

The House Republicans' "Pledge to America" formulated in 2010 promises to exempt the military from any cost-cutting that might be entailed in reducing deficit spending. Even so, Sen. Tom Coburn wrote, "Taking defense spending off the table is indefensible. We need to protect our nation, not the Pentagon's sacred cows."  This statement is significant because it gets at the problem of the debt and the influence of big business in government.  That is to say, it kills two birds with one stone.  Indeed, these two birds may well be the achilles heel of the United States as a viable entity or going concern.  The fatal flaw may well be within, rather than from an external threat.  This is the meaning of Micheal Mullen's statement above. To be sure, Republicans believe that defense is government's core function. Along with regulating interstate commerce, this is particularly true of the federal government.  It is less true, I would argue, of the state governments.  So the plank can be viewed as primarily federalist rather than in terms of limited government itself.  The probably-unfixable $14 tillion US Government debt and the consolidation of public governance in the U.S. into the federal government at the expense of federalism (and the checks therein) are related; both are indications of a basic inbalance that is unsustainable. In the face of this state of affairs, it is telling that the question in late 2010 was who should continue to get a tax.

Source: Michael Crowley, "The Sacred Cows," Time, December 13, 2010, pp. 55-58.