“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” These words were spoken by President Dwight D. Eisenhower in his farewell speech to the country.
This year, one of the biggest news stories coming out of Wall Street is the S&P 500. However, what should instead be a bigger story originating from the epicenter of global finance, is that the United States defense industry is doing much better than the S&P 500.
As the world prepares to fight another enemy – ISIS – and invade countries all over the Middle East, there is ostensibly a greater demand for advanced weapons and weapons systems as well as tanks, planes and other military hardware, according to the New York Times (via the Daily Beast). The biggest beneficiaries of such equipment are Lockheed-Martin, General Atomics and Boeing.
Even with all of the supposed sequesters, austerities and budget cuts, the U.S. defense industry has performed quite well. For instance, in the past two years, the S&P 500 has soared by 30 percent, but the Dow Jones U.S. Aerospace and Defense Total Stock Market Index has risen double that by a value of 60 percent, notes the Fiscal Times.
Although U.S. military spending declined by 6.5 percent last year, shares of defense firms have soared. Why? It’s simple: these U.S. defense giants are gaining contracts from the rest of the world. Aside from the U.S., global military spending has been steadily rising since 1998, and it went up more than three percent last year.
Nations in the Middle East are some of the biggest buyers of military equipment. Many of them spend approximately five percent of their budgets on this type of spending, while Saudi Arabia and Oman have spent double-digits.
With ISIS as the supposed new face of fear and terror, growing military commitments in Africa and Eastern Europe becoming a battlefront, the weapons business will certainly remain a profitable investment for the next couple of decades at least. Once ISIS is the West’s ally, like al-Qaeda has become, we’ll just find another enemy and another monster to slay.
Here is the justification from one defense industry lobbyist:
“If you stop building product, you’re potentially shedding employees—and that’s constituents. That’s taxpayers. That’s your brother, your cousin, your friend—that doesn’t have a job because of a smaller defense budget. But if you can add foreign sales… It’s ensuring a continuation of our industrial base and employment here.”
Forget natural resources and freedom, our biggest exports are debt, occupations, arms and fast-food.
Leave a Comment