[The Pope made a lot of speeches last week, and most [if not all] of them were on the record. I spent a fair amount of time watching the news while he was here – CSPAN was very useful – but used transcripts to prepare this blog. [1] It seemed better to do that, rather than rely on whatever notes I had scribbled in real time, largely because my scribbles were mostly illegible, even to me, and were the product of a distracted mind. It’s not easy to concentrate at home, staring at the TV. Nobody really believed I was working, and everyone thought they had an absolute right to interrupt for any reason. Add pets, and the telephone, and you can see the problem. The cell phone, on the other hand, didn’t distract much, because it wasn’t on.

Generally Elemental Zoo Two doesn’t  cover the same ground as the mainstream media, largely because the mainstreamers (i) travel like a mob, and (ii) tend to beat a subject to a pulp once they’ve discovered it. That’s not as limiting as you might think, however, because media people mostly react to each other, rather than to events or speeches. If you don’t believe me, just watch the Sunday morning news shows, where you have reporters interviewing each other, and occasionally a politician or two. Throw the D.C. think tanks into the mix, and the result is a political dialog that covers the same ground, over and over, with no new ideas.

So I looked at the Pope’s speeches for subjects the establishment media really hadn’t discussed. There were lots of them, of course, but one really stood out; the Pope thinks the international weapons trade ought to be eliminated, or regulated, in the interest of world peace. He said:

Being at the service of dialogue and peace also means being truly determined to minimize and, in the long term, to end the many armed conflicts throughout our world. Here we have to ask ourselves: Why are deadly weapons being sold to those who plan to inflict untold suffering on individuals and society? Sadly, the answer, as we all know, is simply for money: money that is drenched in blood, often innocent blood. In the face of this shameful and culpable silence, it is our duty to confront the problem and to stop the arms trade.[2]

This is truly interesting idea and, I think, is fraught with peril for our defense contractors. Now, I know a bit about the defense industry but Fred is our resident expert on government, the preternatural and political shenanigans, so he ought to take the lead in discussing this. He’s agreed to do it, so long as I don’t edit his opinions. I’ve agreed to that in principle, with two exceptions: (i) no obscenities, this is a family blog, and (ii) I’ll question him when I feel the need.

So with that said, let’s discuss the Pope’s comment and its implications for the U.S. economy.]

Fine, let’s do that. Weapons exports are a big deal in the U.S. economy. The U.S. accounts or over 25% of world weapons deliveries[3], and our defense companies have opened factories or operations in most states. As an example – one of many possible – Lockheed Martin’s 2012 Annual Report[4] reported that the company’s major locations included:

  • Aeronautics – Palmdale, California; Marietta, Georgia; Greenville, South Carolina; and Fort Worth and San Antonio, Texas.
  •  Information Systems & Global Solutions – Goodyear, Arizona; Sunnyvale, California; Colorado Springs and Denver, Colorado; Gaithersburg and Rockville, Maryland and other locations within the Washington, D.C. metropolitan area; Valley Forge, Pennsylvania; and Houston, Texas.
  • Missiles and Fire Control – Camden, Arkansas; Orlando, Florida; Lexington, Kentucky; and Grand Prairie, Texas.
  • Mission Systems and Training – Orlando, Florida; Baltimore, Maryland; Moorestown/Mt. Laurel, New Jersey; Owego and Syracuse, New York; Akron, Ohio; and Manassas, Virginia.
  • Space Systems – Huntsville, Alabama; Sunnyvale, California; Denver, Colorado; Albuquerque, New Mexico; and Newtown, Pennsylvania.
  • Corporate activities – Lakeland, Florida and Bethesda, Maryland.[5]

This wide geographic spread is not atypical for large defense companies. To speculate a bit, you might say that, as a whole. the defense industry is a constituent of practically every Senator and Representative on the Hill. In the final analysis that’s probably why we saw only a modest “peace dividend” after the end of the Cold War.

[Just to clarify, the Cold War officially ended in 1991 [6] and the old Soviet Union collapsed not long thereafter. Back then, lots of folks thought that, lacking a significant enemy in the world, we could reduce the defense budget and use the “savings” from that to fund expanded domestic programs. I was one of those who thought that might be a bad idea. While our active duty forces might be reduced for a time, along with the need to equip them, sooner or later another crisis would erupt, and we would need to re-expand our military once again. At a minimum, I thought, it would be prudent to continue researching and developing new technology, even if we didn’t deploy new weapons.]

Yes, I know you thought that. I agreed with some of it, and apparently so did our Congress. Let’s look at what really happened to bottom line defense expenditures from 1991 to the present. Basically they hovered near $500 billion in 1990; declined somewhat in 1991 -1999 to about 400 billion annually; then rose to a peak of about $700 billion in 2010. [7] So I guess you might say that the “peace dividend in the 1990’s was modest, and it quickly disappeared after the World Trade Center went down.

These figures represent amounts expended each year. They don’t include other costs that are foreseeable, but not yet incurred, such as the future cost of (i) restocking and rebuilding the military in time of war; (ii) disability insurance and medical care for service members, (iii) veterans’ benefits, (iv) payments to injured veterans authorized by programs other than the VA, (v) interest on the money borrowed to finance military operations, and so forth.

Back in 2008 two academics estimated that the total cost to the U.S. economy of the Iraq/Afghanistan Wars would be on the order of three trillion dollars. [8] And that was just for that localized unpleasantness.[9] Who knows? The forecasted number might be much higher if we calculated it today, eight years later.  And no doubt it would be if we considered the foreseeable cost of all military operations since 2001, not just the ones in the Middle East.

[So what’s your point?]

Simply that war in the Middle East, as practiced by us, is nasty, brutish, but definitely not short. We’ve been in Iraq and Afghanistan since 2001 and still can’t seem to get all the way out. And it’s expensive. And more to the point, we’ve built up a vast array of defense contractors who support out various military adventures. So what are they going to do if the U.S. decides to turn off the money spigot?

[You tell me.]

Well, they will have only three options. Theoretically they can (i) apply pressure on the Hill to increase, not decrease the defense budget, (ii) look for new markets overseas to sell their goods and services, or (iii) do both. I think the defense industry as a whole will go with the last option. Those with existing programs will scramble on the Hill to protect them, and the rest will look abroad for new markets.

[You’re speaking as though this isn’t already happening.]

Actually I don’t mean to give the impression that I know anything specific about any company. I’m just following my train of thought to its logical conclusion.

[OK, let’s get back to the Pope’s recommendation. He would like to stop the arms trade “to those who plan to inflict untold suffering on individuals and society.” He said it to the U.S.  Congress, so I’m assuming he thinks they are somehow involved. What are the chances the U.S., or at least the Congress might take some action?]

I don’t know. The defense industry is politically important in this country, largely because it creates or maintains lots of jobs. Also defense contractors tend to be everywhere, so most can produce one or more Senators or Representatives to go to bat for them.

[In his speech at the United Nations, the Pope seemed to be especially concerned about today’s conflicts in “Ukraine, Syria, Iraq, Libya, [and in] South Sudan and the Great Lakes region.”[10] Do we control exports to those areas?]

In the old days, I recall, foreign military sales often were processed through the Pentagon. DOD acted as contracting agent for our allies. DOD wrote and administered contracts with domestic vendors for weapons, technical support, etc. The allies paid for and received the goods and services.  Apparently that still happens today.[11]

There also was in place an export control regime for regulating direct sales by domestic vendors to foreign countries. Once again, something like that exists today.[12]

If you want to know specifics, about what sales are permitted and what aren’t, or who can buy, Larry’s the one to find out about that. Could you ask him to look into it?

[Alright, I see your point. It’s better to do one’s homework before giving an opinion. As Ben Franklin said, “Fools need advice most, but wise men only are the better for it.”[13] So I’ll call Larry, and we’ll better ourselves with his advice. In the meantime, the Pope will have to wait for an answer. See you next time!]

Actually I don’t think he cares what we say.

[1] A note on transcripts. You can find transcripts of the Pope’s various addresses in lots of places. Some of these web sites allow you to see a transcript, but make it difficult to download. Others want to charge you for it. That’s modern capitalism at work. Take something that’s free, and sell it to others. You should avoid these problematic sources, and instead go to the Vatican for your [free] copies of any of the Pope’s addresses in the U.S. Transcripts [and translations] are available from Vatican Radio, at http://www.news.va/en/source/vatican-radio .  That’s where we got ours.

[2] See Vatican Radio, Pope Francis makes historic address to U.S. Congress (September 24, 2015) at p. 8, 9. Please note that our version of this document is not paginated, so the page numbers we reference are our estimates. See note 1 for the web address of this material.

[3] Actually the current estimate is 29%. See  the SIPRI Arms Database, available at http://www.sipri.org/googlemaps/2014_of_at_top_20_exp_map.html

[4] The 2012 Annual Report is available at http://www.lockheedmartin.com/content/dam/lockheed/data/corporate/documents/2012-Annual-report.pdf

[5] Id. at p. 17, Item 2, Properties.

[6] For those of you who don’t remember the Cold War – and who would want to? – take a look at the Wikipedia entry on the subject, at https://en.wikipedia.org/wiki/Cold_War .

[7] See Council on Foreign Relations, Trends in U.S. Military Spending, available at http://www.cfr.org/defense-budget/trends-us-military-spending/p28855

[8] See generally Stiglitz & Bilmes, The Three Trillion Dollar War (Norton, 2008) at Chapter 1, Is it Really Three Trillion?, p. 1 – 31.

[9] Id. at Chapter 1, The Framework, p. 24 – 31: “Total relevant appropriations/ expenditures to date for military operations. This is the simplest step, adding up all of the various amounts that have been appropriated for the war. We have counted all war related appropriations from fiscal year 2001 through December 25, 2007… This includes funds in both supplemental and regular appropriations acts for DOD, State Department, USAID, and Medical costs for the Department of Veterans Affairs. These funds cover military operations, base security, reconstruction, foreign aid, embassy costs and veterans’ health care … for operations in and around Iraq and Afghanistan.” Id. at p. 25.

[10] See Vatican Radio, Pope Francis addresses the U.N. General Assembly (September 25, 2015) at p. 9. This is the official translation; the Pope spoke in Spanish. Once again our version of this document is not paginated, so the page numbers we reference are estimates. See note 1 for the web address where this material may be found.

[11] The  program is being run today by the Defense Security Cooperation Agency.  You can find its website at http://dsca.mil/programs/foreign-military-sales-fms

[12] Today the program seems to be managed by the Department of State. For general information on the system, go to A Resource on Strategic Trade Management and Export Controls, at http://www.state.gov/strategictrade/

[13] See Oxford Dictionary of Quotations (6th Edition, 2004) (hereafter ODQ at __) at p. 332, Benjamin Franklin, n. 16.

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