Doug
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Bill Hartung:
>On military Keynesianism, I have done a paper on the
>changes in military contracting from the mid-1980s to the mid-1990s
>which shows that the funds are more concentrated now. Roughly 270 of
>the 435 Congressional Districts are now virtually out of the defense
>contracting business or on their way out (meaning that they either have
>less than $100 million in defense prime contracts OR have lost 70% or
>more of their contracting base in the last 10 years). California has
>lost $18 billion in defense business since the mid-1980s, more Pentagon
>money than any other state even receives. The only states that have
>bucked the trend are those with powerful members to protect their
>funding: South Carolina (which until recently had the chairs of the
>armed services committee in both the House and Senate based in their
>state) was up by something like 47%, Virginia (with Warner now chairing
>armed services and Robb a ranking democrat on armed services) was up
>over 40%, as was Robert Byrd's beloved home state of West Virginia.
>Meanwhile, defense mergers have led to a situation in which we have the
>"Big Three" weapons makers -- Lockheed Martin, Boeing, and Raytheon --
>who now split about $30 billion-plus in Pentagon funds each year (one
>out of every four Pentagon contract dollars). As part of their
>consolidation, the Big Three have been laying off folks in the Northeast
>in favor of more "cost effective" locations in the South and Southwest.
>Last but not least, they've also been shipping a lot of work overseas to
>help cement foreign arms sales (e.g., Lockheed Martin has F-16 assembly
>lines with partner companies in Turkey and South Korea, and has a dozen
>foreign locations supplying some part or other for the plane). So,
>military spending may provide a stimulus, but it would probably have a
>narrower effect now than it did when they were bending more metal in
>more locations. On the other hand, in the current political climate,
>Pentagon spending is the only thing that Congress can get it together to
>ramp up quickly (witness recent efforts around the "emergency"
>supplemental for Kosovo, where Republicans want to add $4 tto $10
>billion to Clinton's already healthy $6 billion request). So, there may
>still be a sort of "diluted" military Keynesian effect.