Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
Related: About this forumThe Military-Industrial Complex Will Be Just Fine Without Afghanistan
Full disclosure: I have money in a Northrop Grumman retirement fund.
WAR STORIES
The Military-Industrial Complex Will Be Just Fine Without Afghanistan
Defense contractors made a lot less money than youd think from the 20-year war.
BY FRED KAPLAN
AUG 19, 2021 2:09 PM
A widely retweeted article this week in the Intercept claims that the 20-year Afghanistan war, far from being a failure, was an extraordinary success for the top five U.S. defense contractors.
The article calculates that if you had invested an evenly divided $10,000 in those companies stocks on Sept. 18, 2001, the date President George W. Bush signed the Authorization for the Use of Military Force, those shares would be worth $97,795 today. By contrast, if youd put the same money in an S&P 500 index fund, youd have only $61,612. So the big five defense corporations outperformed the stock market by 56 percent.
This is spurious, to say the least. Yes, there is a military-industrial complex, and yes, defense companies have performed better than many (but far from all) other sectors of the economy since the century began. But the growth of the five largest companiesBoeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamicshas had almost nothing to do with Afghanistan.
{snip}
In other words, if the United States had never gone to war in Afghanistan, the profit sheets of these companies would be pretty much unchanged.
{snip}
Over the 20-year war, the U.S. supplied the Afghan military with a total of $83 billion in supplies and weapons. That comes to a little more than $4 billion a year on averagea small fraction of the total U.S. defense budget.
If it were otherwise, we should see a precipitous decline in defense stocks as the U.S. war in Afghanistan has screeched to a halt. But an article in this weeks Barrons argues that the withdrawal will benefit defense stocks. The fall of Kabul to the Taliban will mean less stability in the region, which will increase demand for intelligence, surveillance, and reconnaissance missions as well as unmanned systems, missiles, and satellite capabilities. Thats where the major contractors are primed for growth. Theyve had very little to do with combat in Afghanistan, but they may play a role in what President Joe Biden has called over-the-horizon surveillance and targeting in the future (i.e., gathering intelligence and launching air or missile strikes from hundreds of miles away).
The war in Afghanistan was a misguided morass in many ways. But its an ideological clichéand a mistaken one, at thatto suggest that the military-industrial complex had anything to do with it.
The Military-Industrial Complex Will Be Just Fine Without Afghanistan
Defense contractors made a lot less money than youd think from the 20-year war.
BY FRED KAPLAN
AUG 19, 2021 2:09 PM
A widely retweeted article this week in the Intercept claims that the 20-year Afghanistan war, far from being a failure, was an extraordinary success for the top five U.S. defense contractors.
The article calculates that if you had invested an evenly divided $10,000 in those companies stocks on Sept. 18, 2001, the date President George W. Bush signed the Authorization for the Use of Military Force, those shares would be worth $97,795 today. By contrast, if youd put the same money in an S&P 500 index fund, youd have only $61,612. So the big five defense corporations outperformed the stock market by 56 percent.
This is spurious, to say the least. Yes, there is a military-industrial complex, and yes, defense companies have performed better than many (but far from all) other sectors of the economy since the century began. But the growth of the five largest companiesBoeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamicshas had almost nothing to do with Afghanistan.
{snip}
In other words, if the United States had never gone to war in Afghanistan, the profit sheets of these companies would be pretty much unchanged.
{snip}
Over the 20-year war, the U.S. supplied the Afghan military with a total of $83 billion in supplies and weapons. That comes to a little more than $4 billion a year on averagea small fraction of the total U.S. defense budget.
If it were otherwise, we should see a precipitous decline in defense stocks as the U.S. war in Afghanistan has screeched to a halt. But an article in this weeks Barrons argues that the withdrawal will benefit defense stocks. The fall of Kabul to the Taliban will mean less stability in the region, which will increase demand for intelligence, surveillance, and reconnaissance missions as well as unmanned systems, missiles, and satellite capabilities. Thats where the major contractors are primed for growth. Theyve had very little to do with combat in Afghanistan, but they may play a role in what President Joe Biden has called over-the-horizon surveillance and targeting in the future (i.e., gathering intelligence and launching air or missile strikes from hundreds of miles away).
The war in Afghanistan was a misguided morass in many ways. But its an ideological clichéand a mistaken one, at thatto suggest that the military-industrial complex had anything to do with it.
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
8 replies, 911 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (7)
ReplyReply to this post
8 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
The Military-Industrial Complex Will Be Just Fine Without Afghanistan (Original Post)
mahatmakanejeeves
Aug 2021
OP
2naSalit
(86,775 posts)1. K&R
dlk
(11,576 posts)2. No doubt
Military contractors are a resilient and resourceful lot. However, the $2 trillion spent in Afghanistan is nothing to sneeze at.
littlemissmartypants
(22,803 posts)3. My money is on money laundering. nt
mahatmakanejeeves
(57,600 posts)4. For the most part, the money stays right here.
Defense contractors have plants in all fifty states.
littlemissmartypants
(22,803 posts)5. I wasn't talking about the contractors. I'm sorry I wasn't clear.
Last edited Wed Aug 25, 2021, 01:56 PM - Edit history (1)
I meant that prolonging the war allows a cover for money laundering because of the Afghan traditional hawala system of money handling.
Dirty Money in Afghanistan
How Kabul is Cleaning Up the Illicit Economy
snip...
Most of the country's economic activity is informal, and data provided by the Ministry of Finance suggest that only 35 percent of the financial flows within the country are legal. Unregulated cash transactions and remittances through the country's traditional money transfer system, a network of brokers known as hawala, are the rule. According to the Financial Action Task Force, an international anti-money-laundering body, more than half of all transactions in Afghanistan involve hawala brokers.
https://www.foreignaffairs.com/articles/afghanistan/2016-09-07/dirty-money-afghanistan?utm_medium=promo_email&utm_source=lo_flows&utm_campaign=registered_user_welcome&utm_term=email_1&utm_content=20210821
mahatmakanejeeves
(57,600 posts)7. Oh, sorry. My bad.
And good morning.
littlemissmartypants
(22,803 posts)8. No problem. Good Morning! 🌻🌞🌻
Loge23
(3,922 posts)6. Scenes from the Collapse of an Empire, umm Republic.
The corrupt military-industrial complex in the USA grifted us out of trillions of dollars and now has effectively armed the Taliban.
Think they care?
They're hand-wringing their way to the bank.
They used our blood, our troops, and stole our money.
May they rot in hell.