The Rule of Private Military and Security Interests
U.S. Military Spending Continues to Soar
U.S. President Barack Obama said in his final State of the Union address on January 12 that the U.S. spends “more on our military than the next eight nations combined.” In a February 12 commentary entitled, “Military Spending and Profit” for the Strategic Culture Foundation, Brian Cloughley calls it “a startling and yet repulsive boast.” Cloughley says, “What is less surprising is the U.S. decision to refocus military spending, thus boosting shares in military industry companies.”
The Stockholm International Peace Research Institute (SIPRI) calculates that in 2014 (the most recent year for full figures), the U.S. spent three times as much as China and more than seven times as much as Russia. It also says that U.S. military spending was higher than the next seven countries combined, rather than eight, “but the message is still there,” Cloughley points out. According to SIPRI, in 2014 the U.S. was responsible for 34 per cent of the world’s military spending.
Following the President’s address, on February 2, his Defense Secretary Ashton Carter gave a speech on defence affairs at the Economic Club in Washington, DC. The Economic Club says that “For over 25 years [it] has provided 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.”
Carter told the Economic Club that “the Pentagon would seek a $582.7 billion budget next year and reshape spending priorities to reflect a new strategic environment marked by Russian assertiveness and the rise of Islamic State.”
“It is Mr. Carter’s own country that is indulging in confrontational military ‘assertiveness’ all around the world, in every region and ocean, using hundreds of military bases that are thousands of miles away from its own borders,” Cloughley writes.
He says Carter was reported as saying that “the Pentagon would ask for $3.4 billion to boost military training and exercises aimed at reassuring European countries concerned about Russia, which seized Ukraine’s Crimean peninsula in 2014 and has worried NATO allies with its strategic bomber flights,” and adds:
“He ignores his own spokesman’s declaration that ‘We conduct B-52 [strategic nuclear bomber] flights in international air space [around China] all the time,’ and that the US operation Polar Growl of B-52 jaunts is aimed specifically against Russia in ‘demonstrating the credible and flexible ability of our strategic bomber force.'”
Polar Growl “saw B-52s complete simultaneous, round-trip sorties from Minot Air Force Base, North Dakota, and Barksdale Air Force Base, Louisiana, to the Arctic and North Sea regions,” Cloughley says.
“Obama said the request, a four-fold increase from last year’s $789 million, would enable the United States to strengthen the US military posture in Europe. NATO Secretary General Jens Stoltenberg called the move a ‘clear sign’ of the US commitment to European security,” Cloughley reports.
Defense Secretary Carter was reported to have said in his February 2 speech 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 US inventory of the missiles to above 4,000.”
At midday on February 2, Raytheon shares were valued at $123.47 each. By 4 pm the next day they had increased to $128.07.
This is an example of the politicization of private interests. It is no coincidence that the U.S. Defense Secretary was previously a “a consultant to defence contractors and when he went back to the Pentagon in 2009, he had to get a special waiver because of his work for companies like Mitre Corp, and Global Technology Partners, a defence consulting firm,” Cloughley points out. Carter was also a Senior Partner in Global Technology, “a specialized group of investment professionals who have formed a strategic relationship with DLJ Merchant Banking Partners to acquire and invest in technology, defence, aerospace and related businesses worldwide.”
Reuters reported that following his speech to the Economic Club, Carter then “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.”
This announcement had an effect on Lockheed shares as well, Cloughley writes. “At 10 am on February 2, just before the Carter statement, they were at $208.87 — and by 2:30 pm on February 3 they had shot up to $213.53. It’s interesting to reflect on who might have made a profit.”
In conclusion, Cloughley argues that “Russia wants to trade with Europe. It wants mutual prosperity. Russia wants to flourish and thrive, economically and socially. Its government knows that it can’t achieve this objective for its people if it doesn’t have full, open, mutually beneficial trade with surrounding countries and with all of Europe. […]
“US-NATO warnings about threats to ‘European security’ are a bogus justification for the war drums to be pounded and for the armed forces of US-NATO to be given even higher priority in their confrontational stance against Russia. And this is welcome news for the big spenders on military equipment in Washington, where members of the Economic Club will be rejoicing in their wealth and ever-increasing profits. But they and the other warmongers had better be careful: what goes around, comes around.”
The full article by Cloughley can be found here.
(Graphics: Strategic Culture, SIPRI)