Friday, January 25, 2013

Drones & Default Swaps: The Bankrupting of "Democracy"

The United States spends more on defense than all the other nations of the world combined. Between 1998 and 2011, military spending doubled, reaching more than seven hundred billion dollars a year—-more, in adjusted dollars, than at any time since the Allies were fighting the Axis.
Jill Lepore, The New Yorker, "The Force: How Much Military Is Enough?"

Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
Dwight Eisenhower

Perhaps the most alarming, and the at same time most overlooked, issue on the political landscape is the slippery slope of political corruption in Washington DC and the 50 state capitals. In the past few days, two reporters--Jill Lepore of The New Yorker and Matt Taibbi of Rolling Stone--have clearly communicated the problematic nature of lobbying, campaign contributions and "the revolving door" of government regulators promised bribed with future lucrative jobs within the very industry they are supposedly regulating. This downgraded democracy is the root of societal ills like income inequality, subpar education, a diseased health care system and America's addiction to violent solutions like war and exaggerated prison sentencing.

In her essay "The Force: How Much Military Is Enough?," Lepore traces the bloating of defense spending over the past two centuries, especially the 60 years since Eisenhower's famous militar-industrial-complex speech. Sure enough, there's a collusion between corporations and politicians that, unfortunately, is far too often schleped off by everyday people as "just how the system works." Lockheed Martin is emblematic of the situation:

If any arms manufacturer today holds what Eisenhower called “unwarranted influence,” it is Lockheed Martin. The firm’s contracts with the Pentagon amount to some thirty billion dollars annually, as William D. Hartung, the director of the Arms and Security Project at the Center for International Policy, reports in his book “Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex” (Nation). Today, Lockheed Martin spends fifteen million dollars a year on lobbying efforts and campaign contributions. The company was the single largest contributor to Buck McKeon’s last campaign. (Lockheed Martin has a major R. & D. center in McKeon’s congressional district.) This patronage hardly distinguishes McKeon from his colleagues on Capitol Hill. Lockheed Martin contributed to the campaigns of nine of the twelve members of the Supercommittee, fifty-one of the sixty-two members of the House Armed Services Committee, twenty-four of the twenty-five members of that committee’s Subcommittee on Tactical Air and Land Forces—in all, to three hundred and eighty-six of the four hundred and thirty-five members of the 112th Congress.

The Defense Department has a serious weight problem. With more than 80,000 troops in Germany and Japan combined and hundreds of military bases all over the world, it is clear that the federal government has baptized our country into perpetual war. However, the military-industrial-complex is not primarily concerned with the task of defending our borders, but instead, with American Exceptionalism. We are addicted with the notion of being the best, outspending the entire world on soldiers, bases and weapons while leading the world in weapons manufacturing and trade. And all the while, our education and health care falls abysmally short of the standards set by other industrial countries.

Sure, the military budget creates jobs for soldiers and weapons manufacturers and many more. But Dean Baker points to a recent study of just how inefficient military spending (compared to government spending on education, health and clean energy) actually is:

Using the Bureau of Labor Statistics’ employment requirement tables, they find that on a per dollar basis spending on health care or energy conservation creates 50 percent more jobs than spending on the military. Spending on education creates more than twice as many jobs as spending on the military.

In other words, if the point of spending is to create jobs, then the military is the last place that we would want to put our dollars. But, many in Washington believe in the military spending fairy who blesses the dollars spent on the military with unmatched job creating power that has no basis in normal economic analysis.

As defense contractors and Pentagon officials fearmonger for more funding, the Senate health committee held hearings yesterday to examine the mental health epidemic in the US, including the lack of resources to treat those suffering from crippling conditions like autism and schizophrenia:

...more than 90 million Americans live in areas where there is a shortage of mental health professionals. Fewer than one-third of adults and one-half of children with diagnosable mental disorders will actually receive mental health services in a year. The access challenges are particularly acute in rural America where there are not enough psychiatrists and psychologists to meet the mental health needs of young people and seniors.

Senate health committee member Bernie Sanders (I-VT) later tweeted:

The mental health problem is so severe that deaths of service members by suicide exceeded deaths in combat last year.

But unfortunately, the mentally ill and their advocates cannot match the lobbying power Lockheed Martin as these "interests" compete for billions of federal tax dollars.

On the financial front, Matt Taibbi, the journalistic prophet consistently reminding us that bankers don't get sent to jail no matter what forms of evil they devise, including money laundering for terrorists and drug dealers, lamented today the hiring of Mary Jo White to head the SEC. Remember: this position is supposed to be the top watch dog of the banking industry, but this will be tough for White to do since she has spent most of the last decade defending the horrific actions of the big banks.

Couldn't they have found someone who wasn't a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn't they have found someone who isn't a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?


And back to Bernie:


The financial meltdown came as a result of very risky bets and massive oversights from the banking industry. Then, the feds bailed out the banks, freeing up billions for easy-profit investments while the rest of the US population has suffered economic stagnation.

But things have worked out the way they have over the past 5 years because this is how the system is set up. The defense and financial industries are "too big to fail," doing far more than they ought to in a healthy society. The military should keep us safe from the real terrorists and the banks should secure loans for entrepreneurs looking to create businesses that offer goods and services that make America better. Yet without robust regulation, these billionaires have morphed into becoming the producers of drones and default swaps. As a result, the rest of us, have far less political power and far more threats to our safety and well-being.

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