Thursday, December 30, 2010

The Militarization of the Economy

That's what Wesley Clark, former military leader, says about the incestuous relationship that has developed between retired senior military officers and companies seeking to win Pentagon contracts. The Boston Globe has a lengthy article discussing some of the generals and their companies. Here are some claims the article makes:

■ Dozens of retired generals employed by defense firms maintain Pentagon advisory roles, giving them unparalleled levels of influence and access to inside information on Department of Defense procurement plans.
■ The generals are, in many cases, recruited for private sector roles well before they retire, raising questions about their independence and judgment while still in uniform. The Pentagon is aware and even supports this practice.
■ The feeder system from some commands to certain defense firms is so powerful that successive generations of commanders have been hired by the same firms or into the same field. For example, the last seven generals and admirals who worked as Department of Defense gatekeepers for international arms sales are now helping military contractors sell weapons and defense technology overseas.
■ When a general-turned-businessman arrives at the Pentagon, he is often treated with extraordinary deference — as if still in uniform — which can greatly increase his effectiveness as a rainmaker for industry. The military even has name for it — the “bobblehead effect.’’

The article claims that 80% of the 3 and 4 star officers who retired in 2004 - 2008 now are making money from their Pentagon contacts and military experience. Many hold voluntary positions at the Pentagon, such as chair of the Air Force Studies Group, while simultaneously trying to sell the Pentagon goods produced by such firms as Northrop-Grumman. More senior military officers realize the potential money they can make. In 1994 - 1998 only 50% of retired officers were still sucking at the Pentagon tit.

Part of the problem seems to revolve around the military character which puts senior officers on pedestals.

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