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"War is Good for Business"

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September 12, 2001

by Michel Chossudovsky
Professor of Economics, University of Ottawa
Centre for Research on Globalisation (CRG), Montréal

Does President Bush intend to jump-start confidence in the stock-market by launching a "timely" military strike?

I have great faith in the resiliency of the economy. And no question about it this incident affected our economy., But the markets open tomorrow, people go back to work. We'll show the world. (Remarks by George W. Bush, Reuters, 16th September 2001)

On the other hand, what will be the fate of America's social programs? Five days before the terrorist assaults on the World Trade Centre and the Pentagon, President Bush stated almost prophetically:

I have repeatedly said the only time to use Social Security money is in times of war, times of recession, or times of severe emergency. And I mean that. I mean that. (Transcript of Transcript of Remarks by Presidents Bush and Fox on Departure to Toledo, Ohio -- U.S. Newswire, Inc, September 6, 2001)

"I mean that, I mean that." The tone of the president's rhetoric has set the stage for an expansion of America's war machine. The "recession" and "war" buzzwords are being used to mould US public opinion into accepting a massive redirection of the nation's resources towards the military industrial complex.

In turn, in the wake of the terrorist attacks "love of country", "allegiance" and "patriotism" increasingly pervade the media as well day-to-day political discourse. The hidden agenda is to create a new legitimacy, opening the door for a "revitalization of the nation's defense" while also providing a justification for direct military actions by the US in different parts of the World.

Meanwhile, the shift from civilian into military production pours wealth into the hands of defense contractors at the expense of civilian needs.

Job Creation in America's War Machine

And behind the Bush Administration is the power of the "big five" defense contractors (Lockheed Martin, Boeing, Raytheon et al), increasingly in partnership with the oil-energy giants, which are behind many of the regional wars and insurgencies along strategic oil pipelines.

The Big Five defense contractors have been shifting staff and resources from "civilian" into "military" production lines. Lockheed Martin (LMT) --America's largest defense contractor-- for instance, has implemented major cuts in its satellite division due to "flat demand" in the commercial satellite market. A company spokesman had reassured Wall Street that Lockheed "was moving in the right direction" by shifting financial resources out of its troubled commercial (that is, civilian) undertakings into the lucrative production of advanced weapon systems including the F-22 Raptor high tech fighter jet to be assembled at Lockheed Martin Marietta's plant in Georgia. Each of the F22 Raptor fighters will have a unit cost of $85 million, 3000 direct jobs will be created at a modest cost of $20 million a job.

Boeing which is bidding for the $200 billion dollar procurement contract with the Defence Department for the production of the Joint Striker Fighter (JSF), confirmed that only 3000 jobs would be created. The latter would not even offset the massive lay-offs at Boeing's Seattle plant in recent years. At Boeing, each job created in the JSF programme would cost US taxpayers $66.7 million. (Seattle Post-Intelligencer, 7 September 2001). No wonder the Adminstration wants to downsize social security programmes! (Lockeed Martin together with Northrop Grumman, which are also bidding for the Joint Fighter contract estimate 5400 direct jobs, at a unit cost for each job created of $37 million.

the production of advanced weapons systems in America today, is unlikely to resolve the mounting tide of unemployment.

This new direction of the US economy will generate hundreds of billions of dollars of surplus profits, which will line the pockets of a handful of large corporations. While contributing very marginally to the rehabilitation of the employment of specialised scientific, technical and professional workers laid-off by the civilian economy, this profit bonanza will also be used by the US corporate establishment to finance --in the form of so-called "foreign investment"-- the expansion of the American Empire in different parts of the World.
Copyright Michel Chossudovsky, Montreal, September 2001. All rights reserved.

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