There is a longstanding theory that defense stocks are an effective hedge against recessions because the defense business does not follow the rhythms of the commercial business cycle. However, every recession is different, and if one were to begin over the next year, it could have negative consequences for the defense sector. First, President Trump would be less likely to win reelection. Second, a recession would increase budget pressures. Third, if the budget were cut, weapons spending would likely take [ Read More…]

F-35 airframe integrator Lockheed Martin has awarded BAE Systems a contract to execute Block 4 upgrades to the fighter’s electronic warfare system. This move ensures that BAE will remain the electronic warfare source for the foreseeable future on what is by far the world’s biggest weapons program. It not only is a vote of confidence in the pricing and performance of BAE’s electronic warfare work, but a guarantee that the company will remain at the forefront of an arcane market [ Read More…]

America’s electric grid is the lifeblood of our economy – and our enemies are continuously looking for ways to infect it. Russia, China and other adversaries want to be able to cause catastrophic damage to the electric grid and the U.S. economy through attacks. While important progress has been made in the past year, grid protection is a long-term, expensive and essential policy priority. Lexington Institute’s Paul Steidler has written a commentary for InsideSources about this topic here.

Congress has not managed to complete a federal budget in time for the new fiscal year even once in this century. So there’s a good chance that fiscal 2020 will commence on October 1 with yet another continuing resolution. If that mechanism includes the military, it will likely have unpleasant consequences for readiness and modernization. Training will be delayed, maintenance will be deferred, supply purchases will be put off, and acquisition plans will be derailed. You can’t do this sort [ Read More…]

The Army and Marine Corps are buying a successor to the venerable Humvee light truck that is more survivable, versatile and reliable. Called the Joint Light Tactical Vehicle, it is a response to threats encountered fighting insurgents in Southwest Asia — threats likely to intensify in the future. The Marine Corps is so impressed with JLTV that it has decided to buy 15,000, enough to replace its entire Humvee fleet. The Army’s plan is to buy 49,000, but it has [ Read More…]

Following the collapse of the Soviet Union and the end of the Cold War, the U.S. Army began an effort to re-invent itself in anticipation of changes in the political, operational and technological environments. The “Army After Next” (AAN) program was an effort to look into the future of warfare some 25 years in order to frame the major issues that would drive the design of the Army and its modernization efforts. Today, Army Futures Command (AFC) is attempting once [ Read More…]

A large portion of the U.S. defense establishment is operating under the mistaken belief that a future conflict involving a great or middle power in the Pacific will be a long-range missile duel. China is building a formidable conventional military with a heavy reliance on a mix of air and missile defenses and long-range conventional and nuclear missiles. There are growing concerns that large U.S. naval platforms, particularly aircraft carriers, will be excessively vulnerable if they attempt to enter the [ Read More…]

In the Pentagon’s planning for great-power conflict, Europe is generally considered an Army-Air Force arena, while East Asia is considered a Navy-Marine Corps arena. But the U.S. Army may have a bigger role to play in deterring Chinese aggression than most observers realize, because of its ability to deploy long range fires and defensive systems in the so-called “first island chain” near China. The Army has recently been stressing the importance of forward deployment and joint cooperation while developing a [ Read More…]

In the United States and worldwide, offshore wind power is fledgling, at best. Despite this the Governors of New York and New Jersey have made it the cornerstone of their states’ future electricity supplies and ambitious carbon reduction goals. This will lead to much higher electricity prices and a degradation in grid reliability. As such, both states should reconsider their emphasis on offshore wind. Lexington Institute’s Paul Steidler has written a commentary for RealClearEnergy about this topic here.

August 9, 2019 Meeting Governor Duncan, Postmaster General Brennan, Governors Williams and Stroman, thank you for this opportunity. I will be addressing the Universal Postal Union situation. For decades US businesses have faced a significant competitive disadvantage to China, and a handful of other countries, because of how the Universal Postal Union has structured the international mail system. Under the UPU, it costs 60 percent or less to send a small package from Beijing to the US than to send [ Read More…]