Military spending in North America saw its first annual increase since 2010, while spending in Western Europe grew for the second consecutive year.
World military expenditure rose for a second consecutive year to a total of $1686 billion in 2016—the first consecutive annual increase since 2011 when spending reached its peak of $1699 billion.* Trends and patterns in military expenditure vary considerably between regions. Spending continued to grow in Asia and Oceania, Central and Eastern Europe and North Africa. By contrast, spending fell in Central America and the Caribbean, the Middle East (based on countries for which data is available), South America and sub-Saharan Africa.
After authorising the firing of 59 Tomahawk missiles (each costing around $1.5 million) at a Syrian airbase with no apparent consequential strategic purpose and diminishing none of the Syrian regime’s chemical weapons capability, the maker of the Tomahawk missiles, Raytheon’s stock rose sharply, adding more than $1 billion to its market capitalisation. Other missile and weapons manufacturers, Boeing, Lockheed Martin, Northrop Grumman and General Dynamics, also saw their stock rose considerably – collectively gaining nearly $5 billion in market value. This on its own may not matter much, after all, which president of the USA has not dropped expensive bombs on some ‘remote’ nations of the world. But this time may be different.
Trump used anti-establishment and anti-corporate language during his election campaign to distinguish himself from all other candidates – he opposed neoconservative foreign policy, financial and corporate interests, notably Goldman Sachs. Now, after his inauguration, you can hardly see much difference between his foreign policy plans and policies proposed by neoconservatives. His cabinet looks like a ‘who’s who’ of Goldman Sachs alumni. He ratcheted up the military tension in the South China Sea, ordered a failed major special force operation in Yemen, and now seems to be pushing the USA to the edge of nuclear war with North Korea. The more he uses militaristic confrontational rhetoric and actions, the more ‘presidential’ he looks in the eyes of the mainstream media. He seems ‘unstoppable’.
But is he, really?
Trump’s North Korea policy will reportedly focus more on pressuring Beijing to constrain North Korea, and on additional sanctions.
Two things to keep in mind: don’t underestimate North Korean leader Kim Jong Un, and don’t forget South Korea. …
Kim’s desire for deterrence – to not end up like Saddam Hussein or Muammar Gaddafi – helps explain the existence of its weapons program. Someone who has participated in more than a decade of Track 2 dialogues with the North Koreans once recounted to me how North Koreans asked them: “Would the Americans have gone in and done what they did to Gaddaffi, and to Syria, if they had what we have?’ Continue reading
The combined impact of fewer workers and lower productivity is enormous. In 2008, before the true extent of the recession was known, the Congressional Budget Office (CBO) projected that by 2017 the economy’s potential would be 29 percent larger than it had been in 2007. In its most recent report, the CBO puts the economy’s potential for 2017 at just 16 percent more than its 2007 level. This difference of 13 percentage points translates into more than $2 trillion a year in today’s economy.
It’s also well worth noting that this lost output is income that disproportionately would have gone to those at the middle and bottom of the income ladder. The people who don’t get employed in a weak economy are overwhelmingly African Americans, Hispanics, and workers with less education. Furthermore, in a weak labor market, workers at the middle and bottom of the wage ladder aren’t well positioned to get wage increases. The weakness of the labor market in the Great Recession and the anemic recovery that followed were both associated with a large shift in national income from wages to profits. In short, this was a hard punch to the belly for large segments of the working population.
US was responsible for 82% of all $188 billion in global weapons exports (by value, in 2014 dollars).
Top weapons exporters by value:
EU states: $15B
State Dept WMEAT, Table III
It helps considerably that many of these customers have more than just a few tonnes of precision-engineered titanium to gain from any deal: the beauty of the JSF project is that everyone can bring something to the party. In a Lancashire workshop, for instance, BAE Systems is building a section of the aft fuselage, including the tail, for every F-35; along with other contributions from all over the world, these pieces are then shipped to Texas for final assembly. This means that every F-35 sale is a boost to the coffers of Britain’s own largest arms company. (BAE has also been allowed to do the foldy bits at the end of the wings.) And the opportunities are everywhere. There are aluminium sheets from Milton Keynes, electronic modules from Billingstad, circuit boards from Ankara, hydraulics from Melbourne, wiring systems from Rotterdam, manifolds from Adelaide, wing parts from Turin and actuators from New York. So when Trump threatened to slash the cost of the F-35 programme, or divert some of the custom to cheaper competitors, it wasn’t only American defence contractors who were in the firing line. Everyone had something to lose. On 30 January, ten days after taking office, Trump announced that he had negotiated $600 million off the price tag of the next batch of F-35s. Lockheed’s CEO chose not to shatter his illusion, but it turned out that the next ninety planes were always going to be cheaper anyway – by between 6 and 7 per cent, or $550 and $650 million. The more you build the cheaper they get, thanks to economies of scale. Happily for everyone involved, this also means that more get sold. The ‘military-industrial complex’ turns out to be very simple: the juggernaut has its own momentum. Once it’s rolling it can’t be stopped, even if you’re Donald Trump, something he finally came to acknowledge on 16 March, when his budget plan for the next fiscal year allowed for the ramping-up of F-35 production as part of a proposed 10 per cent increase in overall military spending.
As Rep. Adam Schiff, minority leader of the House Intelligence Committee, said, U.S. support would be perceived “as an indicator of our willingness to push back against Iranian efforts to increase hegemony in the region [and] that may influence how comfortable they are with a nuclear agreement,” adding, “it is very important for the U.S. to have Saudi Arabia’s back when it comes to Yemen.” One anonymous Pentagon official put it coldly: “If you ask why we’re backing this … the answer you’re going to get from most people — if they were being honest — is that we weren’t going to be able to stop it.”