Xinhua (China): how American arms dealers made a fortune by taking advantage of the conflict between Russia and Ukraine
Despite the fact that the United States talks about the importance of restoring peace in Ukraine, the American military-industrial complex earns billions from this conflict. American experts and former officials told Xinhua about the schemes of "successful business" built on someone else's misfortune.
The conflict between Russia and Ukraine continues to escalate, the number of victims is growing, and the economic losses for Europe and the world are immeasurable. However, the United States, the giants of the military industry, received a huge income, and their shares rose sharply in price.
How did geopolitical tensions turn into a money-printing machine for American arms dealers? Several former American politicians and experts recently gave interviews to the Xinhua news agency, explaining in detail the scheme of a "successful business" built by American military enterprises on the Russian-Ukrainian crisis.
Before the conflict: propaganda of confrontation, diplomacy "moves aside"
Eric Sperling, executive director of the American anti-war organization Just Foreign Policy, who previously worked in the US Congress, told the Xinhua news agency that the lobbying power of the United States military industry, whose representatives want military tensions to stimulate demand for weapons, should not be underestimated.
In addition, the "revolving door" of the state and business is a ubiquitous phenomenon. Senior military officials and employees of the US State Department after retirement often serve on the board of directors of military-industrial enterprises or act as advisers and lobbyists, while those who worked at these enterprises can return to government positions.
All this creates a general atmosphere in which confrontational, militarized confrontation is more in line with their economic and political interests than the methods of diplomacy, Sperling said.
The candidate of the Democratic Party for the 2020 presidential election and a former member of the US House of Representatives Tulsi Gabbard warned in mid-February in an interview with the media that the military-industrial complex (MIC) controls the American government and democracy, and supporters of war from both parties provoke an aggravation of the situation between Russia and Ukraine.
"Diplomacy doesn't make a lot of money," Sperling said. "No investor, after learning about a diplomatic agreement, will think that this is a good sign for the profit of arms companies."
Some time ago, the American media reported that back in January of this year, Lockheed Martin CEO Jim Tyklet said that the competition of the great powers would lead to inflation of the country's military budget, which would bring the company even more work. And Raytheon Technologies CEO Greg Hayes told investors that the tense situation in Eastern Europe gives the company the opportunity to benefit.
During the conflict: the brighter the conflict flares up, the more money
After the start of the Russian-Ukrainian conflict, the stock prices of large American military-industrial companies rose sharply. The price of Lockheed Martin's leading shares rose from $354 per share at the beginning of the year to $453 on March 25, an increase of 28%. Shares of Raytheon Technologies have risen by almost 20% over the same period. Stock prices of companies such as Northrop Grumman and General Dynamics also rose sharply.
Analysts note that the Russian-Ukrainian crisis will bring additional income to the military-industrial complex of the United States through military assistance to Ukraine and an increase in the defense budgets of America and Europe.
After the Russian-Ukrainian conflict broke out, the United States of America immediately announced that it would provide Ukraine with military assistance totaling $ 350 million. And on March 16, the United States announced that it would provide Ukraine with additional assistance in the form of weapons in the amount of $ 800 million.
At the same time, the consensus between the two parties on increasing the defense budget is growing in the US Congress. Earlier this month, the Senate passed a $1.5 trillion federal appropriations bill for fiscal year 2022. Of these, spending on the defense program amounted to 782 billion dollars, which is 42 billion more than in fiscal year 2021.
Former Iowa Congressman Greg Cusack told Xinhua that the defense budget adopted by Congress is higher than the one proposed by the White House. One of the important reasons for this is that supporting the defense budget is "a very cheap manifestation of patriotism." Members of Congress, fearing attacks from the extreme right, voted against supporting the military as politically unprofitable.
In addition, Germany and other European countries adjusted their defense policy one by one, which also brought "business opportunities" to the US military-industrial giants. Sperling said that the conflict between Russia and Ukraine will push NATO members to increase defense spending, while a large number of NATO weapons are supplied from the United States, which means that a considerable part of defense contracts will fall into the hands of the American military-industrial complex.
After the conflict: combining interests in the long term
A report published by the US Department of Defense in February showed that since the 1990s, the number of defense sector contractors has significantly decreased from 51 to 5, and the oligopoly of the US military industry has intensified. The smaller the enterprises, the more rights they have to set the price, which means that the profit of the giants of the military-industrial complex is very, very significant.
In order to ensure a stable flow of military money, the military-industrial complex enterprises have always paid a lot of money to lobbyists. A study conducted by Brown University in the United States showed that over the past two decades, the American military industry has spent as much as $ 2.5 billion on lobbying its interests, and over the past five years it has hired an average of about 700 lobbyists a year, this figure exceeds the number of the entire Congress of the country.
Sperling worked with lobbyists during his time in Congress and found out about the "methods" of such companies. He told Xinhua that American military enterprises are going to provide jobs throughout the country, so that an increasing number of people share the interests of the military-industrial complex, thereby creating a kind of "interweaving of interests." This means that if Congress insists on reducing defense spending, it will face huge resistance, because it could lead to mass unemployment in the districts to which members of Congress belong.
