For all its supposed influence in Washington, the defense industry has a remarkably hard time finding friends. When Dick Cheney was defense secretary, he killed a hundred major weapons programs in a mere four years. Bill Perry told defense executives that two-thirds of their companies needed to exit the business. Donald Rumsfeld hated the industry so much he refused to meet with a single one of its representatives during the entire six years he served. And Robert Gates may end up killing more weapons than Cheney did if he sticks around for President Obama’s entire first term.
It seems that defense companies get the worst of both worlds from the political system: Democrats regard the industry as “big business,” Republicans regard it as “big government.” Either way, the industry is always out of favor. But while it may be emotionally satisfying to assail weapons makers, that doesn’t mean it is good politics. For example, Secretary Gates probably destroyed more union jobs with his decision to cut $330 billion in weapons outlays last year than President Obama saved with the stimulus bill. After all, defense production represents about 10% of all manufacturing activity in the U.S., and it is one of the few industrial sectors where organized labor is still thriving (workers at the C-17 plant in California are out on strike this week, which is not something that happens much anymore in the steel and auto industries).
When you consider all the areas where military production dovetails with the Obama Administration’s agenda, it’s a little hard to understand why the White House seems so determined to make life hard for defense contractors. Let’s consider some of those areas…
1. Jobs — The defense industry employs hundreds of thousands of union members in swing states such as Colorado, Florida, Ohio, Pennsylvania and Virginia. Those workers typically have much better pay and benefits than people employed in other sectors such as hospitality, utilities, transportation and commercial manufacturing.
2. Trade — The U.S. defense industry dominates the global market for military goods, outselling all other major exporters of weapons combined. There is much room for military exports to grow as overseas friends and allies prepare to replace Cold War weapons with a new generation of more capable systems.
3. Security — The Obama Administration says it wants to partner with other countries to foster a more effective framework for global security. The most important step in achieving this goal is to provide foreign partners with the same weapons U.S. warfighters have, so coalition forces are agile, survivable and interoperable.
4. Investment — The defense industry invests more money in domestic plant and technology than any other industrial sector, and routinely generates innovations with commercial value. Some of the most important new commercial technologies of the postwar era, from jet engines to global positioning to the internet, originated in the defense sector.
5. Equality — The defense industry has more experience than many other sectors at advancing women and minorities into senior management. While defense companies shy away from describing themselves with loaded terms such as “progressive,” they have exceptional track records on everything from partner benefits to using disadvantaged suppliers.
I could go on, but you get the point. Not only does the defense industry seem well matched to many of the political goals of the Obama Administration, but it is almost entirely a captive of the government customer. It is easy to get the industry to do what the White House wants, because President Obama decides the fate and fortunes of military contractors. That is one reason why members of the administration get away with saying outrageously insulting things about the sector — because everybody in the business knows it has to get along with the government customer. But rather than always going the adversarial route, the administration could probably get a lot more political mileage by using the industry to help advance its agenda. Eliminating more defense jobs in swing states definitely is not indicated.
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