Economic Exploitation and Empire

By David Swanson
This combines remarks made on two panels on May 23, 2008, in Radford, Va., at the Building a New World Conference: http://www.wpaconference.org

Key to enforcement of US economic exploitation of people outside the US is the use and threat of military force. The dominance of the military in US public life and the US economy is also key to the economic exploitation of Americans. Our largest export is weapons, and our largest and longest public investment is in killing. With corporations no longer paying significant taxes, and progressivity stripped out of the tax code, the use of half of every tax dollar for death and destruction is a direct drain on working people. So is major borrowing of money for imperial adventures.

In Washington D.C. it is virtually forbidden to acknowledge that the military costs money. A couple of weeks ago, the rightwing blue dog Democrats blocked a procedural vote to bring three measures up for a vote because one of them included funding for veterans’ care without providing new revenue to pay for it. Once the leadership had fixed that reckless error by creating new taxes, the blue dogs were happy to proceed and to vote for both that measure and another to spend over 10 times as much money on occupying Iraq. Nobody even requested so much as a hint at where that money will come from, because war money isn’t money. We can spend any amount creating new injured veterans as long as we don’t put any care for veterans on our Chinese credit card. This is also why the biggest spenders in US government are able to consistently accuse their less war-mad rivals of spending too much. War spending doesn’t count as spending.

Investing in war could not stimulate the economy in the way that other public spending could, even if war spending were honest and efficient. Weapons makers do not have to produce anything that is of any use to a community. They just have to reach into our pockets (or our grandchildren’s pockets) and take our money. And, of course, war spending never is honest or efficient. Much of it goes no further than the already stuffed pockets of a pack of cold-blooded cronies. It’s not reinvested in an economy.

The Institute for Policy Studies and United for a Fair Economy found that in 2005, weapons CEOs made 108 percent more on average than in 2001; CEO pay at other large U.S. companies increased by only 6 percent. In 2006, the CEO of Boeing was paid $13.8 million, Northrop Grumman’s $18.6 million, General Dynamics’ $15.7 million, Raytheon’s $11.9 million, Halliburton’s $16.5 million, and the CEO of Lockheed Martin was paid $24.4 million. That’s your money.

One of the best sources of information on the reckless waste of money on war-profiteering cronies and disaster capitalists is Congressman Henry Waxman’s Committee on Oversight and Government Reform. Of course, Waxman won’t cut off the funding or impeach the people at the top, so the profiteers treat him as a joke. They ignore subpoenas to appear, or they appear and decline to answer questions. But if you can ignore the fact that Waxman is supposed to be a Congressman and just view him as a researcher, he’s superb. He held yet another hearing yesterday on this topic.

We know by now that the Cheney-Bush gang has recklessly wasted huge amounts of public funds on contracts awarded to close associates, including companies guilty of defrauding the government in the past (not to mention companies guilty of slaughtering civilians), contracts awarded without competitive bidding, “cost-plus” contracts designed to encourage cost overruns, and contracts not requiring satisfactory completion of the work.

These sorts of failures (or successes, depending on your point of view) have been the rule, not the exception, in the awarding of contracts for work in Iraq over the past six years. Repeated exposure of fraud and waste has not been met by the president with any correction of systemic problems, but rather with retribution against whistleblowers.

Halliburton has charged us – you and me – for driving empty trucks across Iraq, and recorded on a form that it was hauling “sailboat fuel.” And risking people’s lives to do so. That level of arrogance seems to arise in wars under the shelter of war music and waving flags.

I want to quote for you a brief section of a report from Waxman’s website:

“From the beginning, the Administration adopted a flawed contracting approach in Iraq. Instead of maximizing competition, the Administration opted to award no-bid, cost-plus contracts to politically connected contractors. Halliburton’s secret $7 billion contract to restore Iraq’s oil infrastructure is the prime example. Under this no-bid, cost-plus contract, Halliburton was reimbursed for its costs and then received an additional fee, which was a percentage of its costs. This created an incentive for Halliburton to run up its costs in order to increase its potential profit.

“Even after the Administration claimed it was awarding Iraq contracts competitively in early 2004, real price competition was missing. Iraq was divided geographically and by economic sector into a handful of fiefdoms. Individual contractors were then awarded monopoly contracts for all of the work within given fiefdoms. Because these monopoly contracts were awarded before specific projects were identified, there was no actual price competition for more than 2,000 projects.

“In the absence of price competition, rigorous government oversight becomes essential for accountability. Yet the Administration turned much of the contract oversight work over to private companies with blatant conflicts of interest. Oversight contractors oversaw their business partners and, in some cases, were placed in a position to assist their own construction work under separate monopoly construction contracts….

“Under Halliburton’s two largest Iraq contracts, Pentagon auditors found $1 billion in ‘questioned’ costs and over $400 million in ‘unsupported’ costs. Former Halliburton employees testified that the company charged $45 for cases of soda, billed $100 to clean 15- pound bags of laundry, and insisted on housing its staff at the five-star Kempinski hotel in Kuwait. Halliburton truck drivers testified that the company ‘torched’ brand new $85,000 trucks rather than perform relatively minor repairs and regular maintenance. Halliburton procurement officials described the company’s informal motto in Iraq as ‘Don’t worry about price. It’s cost-plus.’ A Halliburton manager was indicted for ‘major fraud against the United States’ for allegedly billing more than $5.5 billion for work that should have cost only $685,000 in exchange for a $1 million kickback from a Kuwaiti subcontractor….

“The Air Force found that another U.S. government contractor, Custer Battles, set up shell subcontractors to inflate prices. Those overcharges were passed along to the U.S government under the company’s cost-plus contract to provide security for Baghdad International Airport. In one case, the company allegedly took Iraqi-owned forklifts, re-painted them, and leased them to the U.S. government.”

Waste can occur in the public or private sector, whether war is involved or not. But war seems to increase the level of arrogance and daring. And we now have permanent all-encompassing war, a war against a state of mind called “the global war on terror,” and we’re militarizing the so-called homeland. The Department of Homeland Security has seen levels of waste to match those in Iraq.

We’ve also seen the military industrial technological entertainment academic media corporate complex reach its tentacles into nearly every area of our economy, leading to people feeling they are dependent on supporting projects that are ultimately destructive. The military may provide jobs, but only if the weapons are used up and more are needed. And we know what happens when it comes time to use up some of the weapons.

A recent book by Nick Turse points out that it is nearly impossible to purchase or use a product of any sort in the United States that is not produced by a Pentagon contractor. In fact, I typed this on an Apple computer, and Apple is a major Pentagon contractor. But then, so is IBM. And so are most of the parent companies of most of the junk food and trinket stores in the airport where I was sitting, not to mention the coffee stands. Starbucks is a major military supplier, with a store even in Guantanamo. Starbucks defends its presence on Torture Island by claiming that to NOT be there would constitute taking a political position, whereas being there is simply standard American behavior. Indeed. Not only are traditional weapons manufacturers’ offices now found alongside car dealers and burger joints in almost every American suburban strip mall, but the car dealers and burger joints are owned by companies driven by Pentagon spending, just as are the media outlets that don’t tell you about this.

Turse reviews the growth of the traditional military-industrial complex, and Eisenhower never could have imagined it. But, then Turse starts adding: the military-telecom complex, the nascent and unconstitutional homeland militarization complex, the military golfing complex. I am guessing you have no idea how many golf courses the US military (excuse me, YOUR tax dollars) maintain around the world. In fact, much of Turse’s book is a tale of luxurious excesses by military brass and CIA spies, living very high on the hog. How many of these types do you imagine you are paying to put up in $1,000-a-night luxury hotels around the world on any given night? If you don’t want to know, don’t read this book, which is called “The Complex.”

You spare no expense, let me tell you. Wait until you read about the exploding frisbees, cyborg wasps, and Captain America no-meals and no-sleep soldiers being developed by the same people who brought you mechanical killer elephants and telepathic warfare: the Defense Advanced Research Projects Agency. Each year, the EPA spends 622 million of your tax dollars trying to figure out how we can power things without oil, while the military spends $73.7 BILLION trying to figure out insane ways to kill people.

Then there are the expenses needed to keep military recruitment from completely failing: Hollywood movies funded by the military (I mean, by YOU), pimped out Hummers displayed by sexy models at trade fairs, $150,000 signing bonuses. It’s all due to your generosity.

But the larger point is that military spending would be an economic, as well as a human, waste even if it were simple, honest, transparent, and competitive. According to a 2007 study by the University of Massachusetts-Amherst’s Department of Economics and Political Economy Research Institute (PERI), government money devoted to healthcare, education, environmental sustainability, and infrastructure can generate up to twice as many jobs per dollar as military spending.

This is why a social worker like Mary Beth Sullivan, through whom I found that study and others, has decided that the best thing she can do to find housing and health care for the people of the planet’s richest nation is to rein in military spending.

According to Joseph Stiglitz and Linda Bilmes’ book “The Three Trillion Dollar War,” we have almost certainly spent at least three to five trillion dollars on occupying Iraq if you include lost work, veterans care, the rise in oil prices, and the interest on debt. It’s hard to even think of any useful work we could do on jobs, infrastructure, housing, clean energy, or education that could not be done for five trillion dollars. With that kind of money, you have to start straining your imagination to come up with ways to spend it, you have to make college free and preschool free, and hire more teachers, and pay them very well, and build them new public transportation to get to their new solar-powered schools, and you’re still just getting started. And the payoff is not just that you’ve educated kids instead of killing them, although that seems rather significant to me. But you’ve also much more effectively created jobs and money in the economy that lead to other jobs and more money. This is very different from shoveling bundles of cash into a humvee and never seeing it again.

In the U Mass Amherst report, Bob Pollin and Heidi Garrett-Peltier found that “$1 billion spent on personal consumption, health care, education, mass transit and construction for home weatherization and infrastructure will all create more jobs within the U.S. economy than would the same $1 billion spent on the military.” Spending on personal consumption, they found, generates lower paying jobs than military jobs (at least until the service industry is better unionized), but investing in health care, education, mass transit, and home construction creates better paying jobs.

Almost 20 years ago, with the end of the Cold War, there was discussion of a peace dividend. Now, with no comparable enemy yet discovered or manufactured, the United States spends more on the military than it ever did during the Cold War. At the same time, we ignore the need to invest in green energy, thereby engaging in an action perhaps more suicidal than anything we ever did during the Cold War.

I liked Dennis Kucinich’s presidential campaign, both four years ago and last year, because he proposed shifting to a peace economy. He laid out a plan to create 2 million living wage jobs rebuilding schools, designing roads, refurbishing environmental projects, manufacturing steel for water systems, etc., jobs to improve our infrastructure and move us to clean energy, jobs that need to be done at a time when millions are unable to find jobs.

Kucinich’s plan includes making $50 billion in zero-interest loans every year to localities for infrastructure projects for ten years. Twenty percent of these funds would be targeted for school construction and repair. The plan also includes a 15% reduction in the military budget, redirecting that $65 billion towards hometown security issues such as education, jobs, and health care.

State and local governments would continue to issue bonds to finance infrastructure projects. But under the Kucinich plan, the federal government would be authorized to buy those bonds. States would have to repay the principal, but unlike normal municipal borrowing, these bonds would pay zero interest. So, the cost of borrowing for infrastructure improvement would be reduced by half.

Part of the same plan is raising the federal minimum wage to a living wage and indexing it to rise with the cost of living.

Another piece of the plan is replacing NAFTA and the WTO with fair trade agreements.

Yet another step involves restoring fairness to our tax system.

But it all begins, as I think it must, by shifting our priorities from investing in killing to investing in living.

ENDING THE EMPIRE

The following draws heavily on Jackie Cabasso’s paper at
http://afterdowningstreet.org/militarism

Former Cold War hawk and CIA analyst, Chalmers Johnson, has written:

“As distinct from other peoples, most Americans do not recognize — or do not want to recognize — that the United States dominates the world through its military power. Due to government secrecy, our citizens are often ignorant of the fact that our garrisons encircle the planet…. Our military deploys well over half a million soldiers, spies, technicians, teachers, dependents, and civilian contractors in other nations. To dominate the oceans and seas of the world, we are creating some thirteen naval task forces. . . .We operate numerous secret bases outside our territory to monitor what the people of the world, including our own citizens, are saying, faxing, or e-mailing to one another. … If there were an honest count, the actual size of our military empire would probably top 1,000 different bases in other people’s countries.” – plus some 6,000 in the United States and its territories.

Cabasso includes a graphic showing 156 countries with US troops, 70 with U.S. bases, and 46 outside the empire.

In a 2006 review of a Congressional Research Service study and two other surveys of U.S. military interventions, journalist Gar Smith found that “in our country’s 230 years of existence, there have been only 31 years in which U.S. troops were not actively engaged in significant armed adventures on foreign shores …. The defining characteristic of our nation’s foreign policy for 86% of our existence would appear to be a bellicose penchant for military intervention.”

Over the past two centuries, the United State has attacked, invaded, policed, overthrown or occupied 62 nations.

Awareness of America’s empire is growing even inside the so-called Homeland, and a movement in opposition to the bases is growing around the world, including in the Czech Republic where the public overwhelmingly opposes building a US radar base for so-called “missile defense”. Two leaders of the movement there, Jan Tamas and Jan Bednar, began a hunger strike in Prague on May 13th. You can support them at www.nonviolence.cz or by joining in the hunger strike, as activists around Europe are doing. Bruce Gagnon in Maine has said he will join in beginning Saturday, along with activists in Korea and Australia. Let him know if you want to join.

People around the world are not generally opposing American empire so that they can have better lives and Americans have worse ones. There’s not necessarily a zero-sum contest of that sort going on. We don’t have to keep our empire going or give up our favorite luxuries (although there are plenty we should give up; we don’t need them and they are doing other people harm). In fact, if we try to keep the empire going we will lose everything: our rights, our economy, our environment as a habitable place, and quite possibly all of our lives in war. So, shifting course is necessary, but I think it can also be seen as a positive step.

Helena Cobban, a writer from Virginia, has a new book about post-Bush foreign policy possibilities, and she says that when she grew up in britain, the empire there was ending, and that ending the empire in Africa and Asia improved the lives of the people in what Bush would call the Homeland of Britain. The same might be said of other European nations, including Germany, as well as Japan.

The same might be true for Americans if we shut down our empire of bases. We could begin treating other nations and people as equals, and sharing our wealth, and potentially see most people around the world, including most Americans, enjoying better lives than what most Americans did when we had an empire. The amount of money we could put to good use if we shut down the military of the empire is almost unfathomable, as is the potential of green energy.

We might give up having our nation’s flag flying over some other nation’s soil, and in exchange end up safer, freer, and more prosperous. Of course the chance of this shrinks every moment we wait to do what we know we have to do.

One thing we may have to do if we want to shut down the empire is to do away with the emperor, to resist the shifting of all power in our government to the White House and restore some power to the Congress – which we can more easily (though not very easily) compel to obey the will of the public. Putting power back into what was supposed to be the most powerful branch of our government probably won’t be accomplished by a new emperor. Rather, people will have to force the Congress to reclaim power, and it will never be able to reclaim any minor powers without reclaiming the big ones, namely the power of the purse and the power of impeachment. Sooner or later, those powers will be restored to Congress or awareness will spread that Congress has ceased to exist, and with it perhaps our most readily available tool for restraining emperors.

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