THE ECONOMICS OF WAR


Have you ever found yourself wondering why countries go to war? Especially wars that may be far from their own shores and may or may not have anything to do with themselves? It all comes down to the economics of war and it has been going on since countries and economies began. It is a historical fact that every country that has fallen upon hard economic times has found a way to become involved in a war. Employment goes up. Production goes up. Manufacturing gets a boost, and not just in what we would think of as “war related” areas. Soldiers need all the same things we at home need, in addition to armor, weapons, etc.. And under the pressure of things being needed “right now” oversight tends to become a bit lax. What am I talking about? Consider these facts:

The Black Market, political corruption, and profiteering have existed in every war , although seldom publicized by official government versions of the facts.  Government contracts that should have been awarded by virtue of best product, or price, have been given to contractors paying the highest bribes, or ‘contributions’ to politicians in positions to award those contracts.  In 1862, Lincoln’s first Secretary of War, Simon Cameron, resigned due to charges of corruption involving war contracts.  In 1947, Kentucky congressman Andrew J. May, Chairman of the Committee on Military Affairs was convicted for taking bribes for awarding war contracts.

According to these articles in the New York Times, and the Opinionator Blog , Union soldiers in the Civil War had their uniforms dissolve in the first heavy rain, because Books Brothers, accused of obtaining war contracts through ‘questionable means’, often used decaying fabric pressed together and glued, to sew into uniforms that often lacked buttons or button holes.  In addition to Brooks Brothers, other wool mills made huge profits by cheating the government.  Some uniforms, made from non-regulation color, resulted in soldiers being mistaken for the enemy and killed by ‘friendly fire’.

Shoes, with soles made from wood chips, fell apart.  Guns failed to fire, with sawdust filled stocks and shells filled with sawdust instead of gunpowder.  Even horses and mules ordered and paid for by the government were delivered to the front, crippled, old, and sometimes blind.

Soldiers in the field were put at risk due to the corruption of greedy politicians taking bribes from contractors that knowingly supplied shoddy materials for their very lucrative government contracts.

Major General Smedley Butler, USMC, criticized war profiteering of U.S companies during World War I in War Is a Racket , saying some companies and corporations increased profits by up to 1700%, selling equipment and supplies to the U.S “that had no relevant use in the war effort”, and “It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war period. This expenditure Yielded $16,000,000,000 in profits.”

 Brent R. Wilkes, indicted defense contractor, was said to be thrilled when he heard the U.S. would be going to war with Iraq.  A former employee was quoted as saying “He and some of his top executives were really gung ho about the war… Brent said this would create new opportunities for the company…He was really excited about doing business in the Middle East.”

Steven Clemons, a senior fellow at the New America Foundation think tank, accused former CIA Director James Woolsey of both “profiting from and promoting” war in Iraq.

According to the Center for Public Integrity report, US Senator Dianne Feinstein and her husband, Richard Blum, made “millions of dollars from Iraq and Afghanistan contracts through his company, Tutor Perini Corporation. Feinstein voted for the Iraq resolution giving President George W. Bush the authority to invade Iraq”.

According to Fox News, Halliburton received more than $600 million related to the wars in Iraq and Afghanistan, with the potential of earning billions more without having any competition for those contracts.  Halliburton’s contract had no spending ceiling.

According to this International Business Times article, $138 billion of taxpayer money went to government contracts that included paying for “private security, building infrastructure, and feeding the troops”.  52 percent of the funds were awarded to 10 contractors.  The largest amount went to KBR, Inc., and its’ parent company, Halliburton. The company received $39.5 billion in Iraq-related no-bid contracts over the past decade, with a $568-million contract renewal in 2010 to “provide housing, meals, water and bathroom services to soldiers”, a deal that prompted the Justice Department to file a lawsuit over alleged kickbacks.

To recap a brief history of Halliburton and politicians, in February 1991, following the end of Operation Desert Storm, the Pentagon, led by Dick Cheney (Secretary of Defense during George H. W, Bush’s presidency), paid Halliburton subsidiary, Brown & Root Services, over $8.5 million to study the use of private military forces with American soldiers in a combat zone  (Wikipedia).  Cheney was the Chairman and CEO of Halliburton Company from 1995 to 2000.

According to Wikipedia , “In 1998, Halliburton merged with Dresser Industries, which included Kellogg. Prescott Bush was a director of Dresser Industries, which is now part of Halliburton; his son, former president George H. W. Bush, worked for Dresser Industries in several positions from 1948 to 1951.”

Cheney was Vice President under George W, Bush from January 20, 2001 to January 20, 2009.

Dick Cheney has been the most vociferous advocate for the U.S. to wage continuous war in Iraq and Afghanistan.  It seems that businessmen no longer feel the need to pay politicians. Now they have simply become politicians.

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