http://www.watan.com/en/feaute/611-sherwood-ross-chicago-.html Who are Iraq war's winners and losers? by Sherwood Ross CHICAGO Thursday, 20 August 2009 06:09
What follows is a brief look at some of the outfits that cashed in, and at the multitudes that got took. “Defense Earnings Continue to Soar,” Renae Merle wrote in The Washington Post on July 30, 2007. “Several of Washington’s largest defense contractors said last week that they continue to benefit from a boom in spending on the wars in Iraq and Afghanistan.” But war, it turns out, is not only unhealthy for human beings, it is not uniformly good for the economy. Many sectors suffer, including non-defense employment, as a war can destroy more jobs than it creates. The general public suffers, too. “As President Bush tried to fight the war without increasing taxes, the Iraq war has displaced private investment and/or government expenditures, including investments in infrastructure, R&D and education: they are less than they would otherwise have been. Stiglitz holds a Nobel Prize in economics and Bilmes is former assistant secretary of the US Department of Commerce. They say government money spent in Iraq does not stimulate the economy in the way that the same amounts spent at home would. The war has also starved countless firms for expansion bucks. “Higher borrowing costs for business since the beginning of the Iraq war are bleeding manufacturing investment,” Greg Palast wrote in Armed Madhouse. And when entrepreneurs -- who hire so many -- lack growth capital, job creation takes a real hit. We might recall too, the millions around the world who filled the streets to protest President Bush’s impending attack on Iraq and who have quit buying US products, further reducing sales and employment. “America’s standing in the world has never been lower,” the authors said, noting that in 2007, US “favorable” ratings plunged to 29 percent in Indonesia and nine percent in Turkey. “Large numbers of wealthy people in the Middle East – where the oil money and inequality put individual wealth in the billions – have shifted banking from America to elsewhere,” they said. Because the Iraq war crippled that country’s oil industry, output fell, supplies tightened, and, according to Palast, “World prices leaped to reflect the shortfall." What’s more, Palast pointed out, after the Iraq invasion the Saudis withheld more than a million barrels of oil a day from the market. “The one-year 121 percent post-invasion jump in the price of crude, from under $30 a barrel to over $60, sucked that $120 billion windfall to the Saudis from SUV drivers and factory owners in the West,” he said. Count the Saudis among the big winners. The oil spike subtracted 1.2 percent from the gross domestic product, “costing the USA just over one million jobs,” Palast reckoned. Stiglitz and Bilmes said the oil price spike meant “American families have had to spend about 5 percent more of their income on gasoline and heating than before.” Last year, the Iraq and Afghan wars cost each American household $138 per month in taxes, they estimated. Count the Joneses among the big losers. Palast wrote, “It has been a very good war for Big Oil – courtesy of OPEC price hikes. The five oil giants saw profits rise from $34 billion in 2002 to $81 billion in 2004…But this tsunami of black ink was nothing compared to the wave of $120 billion in profits to come in 2006: $15.6 billion for Conoco, $17.1 billion for Chevron and the Mother of All Earnings, Exxon’s $39.5 billion in 2006 on sales of $378 billion.” Palast noted that oil firms have their own reserves whose value is tied to OPEC’s price targets, and “The rise in the price of oil after the first three years of the war boosted the value of the reserves of ExxonMobil oil alone by just over $666 billion. “Chevron Oil, where Condoleezza Rice had served as a director, gained a quarter trillion dollars in value…I calculate that the top five oil operators saw their reserves rise in value by over $2.363 trillion.” Who’s surprised when Forbes reports of the ten most profitable corporations in the world five are now oil and gas companies – Exxon-Mobil, Royal Dutch Shell, BP, Chevron, and Petro-China. “Since the Iraq War began,” Matthew Rothschild, editor of The Progressive wrote, “aerospace and defense industry stocks have more than doubled. General Dynamics did even better than that. Its stock has tripled.” Among the big winners are top Pentagon contractors, as ranked by WashingtonTechnology.com as of 2008. Halliburton spun off KBR in 2007 and their operations are covered later. Data was selected for typical years 2007-09. 1. Lockheed Martin 2. Boeing 3. KBR 4. Northrop Grumman 5. General Dynamics 6. Raytheon 7. SAIC 8. L-3 Communciations 9. EDS Corporation 10. Fluor Corporation --Lockheed Martin, of Bethesda, Maryland, a major warplane builder, in 2007 alone earned profits of $3 billion on sales of nearly $42 billion. --Boeing, of Chicago, saw its 2007 net profit shoot up 84 percent to $4billion, fed by “strong growth in defense earnings,” according to an Agence France-Presse report. --Northrop Grumman, of Los Angeles, a manufacturer of bombers, warships and military electronics, had 2007 profits of $1.8 billion on sales of $32 billion. --General Dynamics, of Falls Church, Virginia, had profits in 2008 of about $2.5 billion on sales of $29 billion. It makes tanks, combat vehicles, and mission-critical information systems. --Raytheon, of Waltham, Massachusetts, reported about $23 billion in sales for 2008. It is the world’s largest missile maker and Bloomberg News says it is benefiting from “higher domestic defense spending and US arms exports.” --Scientific International Applications Corp., of La Jolla, California, an engineering and technology supplier to the Pentagon, had sales of $10 billion for fiscal year ending Jan. 31, 2009, and net income of $452 million. --L-3, of New York City, has enjoyed sales growth of about 25 percent a year recently. Its total 2008 sales of $15 billion brought it profits of nearly $900 million. Its primary customer is the Defense Department, to which it supplies high tech surveillance and reconnaissance systems. --EDS Corp., of Plano, Texas, purchased by Hewlett-Packard in May, 2008, had 2007 sales of nearly $20 billion. Its priority project is building the $12 billion Navy-Marine Corps Intranet, said to be the largest private network in the world. --Fluor Corp., of Irvine, Texas, an engineering and construction firm, had net earnings of $720 million in 2008 on sales of $22 billion. The good times continue to roll for military contractors under President Obama, who has increased the Pentagon’s budget by 4 percent to a total of about $700 billion. --- The military industrial complex is doing just fine. It's nice to live in a police state where so many people care about what you're doing, or make sure you have nothing to do. I'm glad that President Bush Jr. was the Commander-In-Chief of our armies without having to be the American peoples President. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. 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