Military-Industrial Complex Cashes in from Airstrikes in Iraq, Syria

A $300,000 missile to destroy a $30,000 pickup truck.

Follow The Money Trail

       #1)  -  Spend taxpayer's money to flood Syrian Islamist groups with
                     mountains of expensive weapons.
       #2)  -  Claim that you are "outraged" that Islamists have mountains of
                    expensive weapons.  Spend taxpayer's money to bomb the groups
                    that are using the mountains of expensive weapons that you sent.
     #3)  -  The U.S. and your allies are now running low on missiles and
                     other military equipment.  Spend taxpayer's money to order a
                     resupply of munitions from the defense contractors.
       #4)  -  Defense contractors then donate millions in corrupt campaign cash
                    to the politicians who ordered the bombing.


Three days after U.S. warships fired 47 cruise missiles at Sunni militant targets in northern Syria last week, the Pentagon signed a $251-million deal to buy more Tomahawks from Raytheon Co., a windfall for the military giant and its many subcontractors.

As U.S. combat operations ended in Iraq and Afghanistan, the defense industry braced for protracted budget cuts at the Pentagon. Major contractors have laid off workers, merged with one another and slowed production lines as spending shrank and leaner times loomed ahead.

But with U.S. and allied aircraft now bombing Islamic State and Al Qaeda positions in Iraq and Syria, including 41 airstrikes since Monday, many analysts foresee a boost to bottom lines for munitions manufacturers, weapons producers and other military contractors — including many in Southern California reports the Los Angeles Times.

The daily pounding by U.S. bombers, fighters and drones, and the resupply of European and Arab allies that have joined the effort, has cost nearly $1 billion so far, analysts say, and will cost billions more down the road.

See General Smedley Butler

Ironically, dozens of the U.S. airstrikes have targeted American-made Humvees, mine-resistant ambush-protected vehicles and other armored vehicles that Islamic State fighters captured as they overran Iraqi military bases and airfields during their blitz across northern Iraq this year. The new government in Baghdad is scrambling to rebuild its battered army and will need to buy replacement vehicles.

Wall Street is paying attention. Shares of major military contractors — Raytheon, Lockheed Martin Corp., Northrop Grumman Corp. and General Dynamics Corp. — all have been trading near all-time highs, outpacing the Standard & Poor's 500 index of large companies' stocks.

 

Investors anticipate rising sales for precision-guided missiles and bombs, and other high-priced weapons, as well as sophisticated surveillance and reconnaissance equipment, as the Pentagon gears up for a conflict that commanders say is likely to last years.

"There are plenty of reasons to think that defense spending is going to be on the rise again," said Wayne Plucker, an aerospace analyst with research firm Frost & Sullivan. "Defense companies are not being harmed by the current situation, I can tell you that much."

The Center for Strategic and Budgetary Assessments, a nonpartisan Washington-based think tank, estimates the air campaign could cost $2.4 billion to $3.8 billion per year if the current tempo of airstrikes is maintained.

Congress also has agreed to provide $500 million in weapons and training to Syrian rebels who can act as a ground force against the militants in Syria, although it's unclear whether that will require new stocks.

The Pentagon said 96% of the roughly 200 bombs dropped on a dozen targets in Syria early Sept. 23, the first day of the expanded campaign, were precision-guided.

To replace those munitions, experts say, officials are likely to turn to Boeing Co. for a tail kit that converts an unguided free-fall bomb into a "smart" bomb through installation of a GPS-guided tail section.

The company has sold nearly 262,000 such kits, at $25,000 each, including thousands to Saudi Arabia, the United Arab Emirates, Qatar and Bahrain.

"These coalition partners have already bought quite a bit of weapons from American weapons makers," said Richard Aboulafia, an aerospace analyst with Teal Group Corp., a Virginia research firm. "After a campaign like this, they're likely to buy more."

"We annually spend on military security more than the net income of all United States corporations.
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This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. .
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In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. .
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We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."
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General Dwight Eisenhower
President of the United States
Republican