Trump poised for cost-cutting battle with defense contractors

Posted: December 27, 2016 in Uncategorized

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President-elect Donald Trump’s preemptive strike on the price tag of two major projects with leading defense contractors has fiscal hawks hopeful the incoming administration can rein in Pentagon contract costs even as Trump vows to invest in rebuilding the U.S. military.

Newsdesk International

President-elect Donald Trump’s preemptive strike on the price tag of two major projects with leading defense contractors has fiscal hawks hopeful the incoming administration can rein in Pentagon contract costs even as Trump vows to invest in rebuilding the U.S. military.

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Comments
  1. PeaceFrog says:

    Marx wrote about a tendency for return on capital investment tend toward equilibrium for different industries based on market competition. Marx analyzes Smith, Ricardo and other classical economists better than most professors I had as an undergraduate in business school. Certain industries operate outside market capitalism. The prima facie cases have included the market outperformance of pharmaceuticals, up until the last year, when the threat of overdue regulation became an political bully pulpit. Another instance of an industry that has not been subject to true market competition is the defense contractors:

    http://www.thefiscaltimes.com/2015/04/20/US-Defense-Industry-Outperforms-SP-100-Percent

    This phenomenon has not escaped the analysis of free market libertarians. In the book, Radicals for Capitalism, the author analyzed the defense contractors as a market failure. This was based on the fact that when defense contractors lost government contracts they became unable to compete in the free market because they became used to cost-plus budgets that were basically not challenged by the government (i.e., a failed business model).

    • Very interesting background, PeaceFrog. It’s always been my sense that the most powerful US corporations operate outside of free market competition – usually because they receive special tax concessions and government subsidies.

      • PeaceFrog says:

        Often this “guns and butter” approach is what politicians sell. They keep food costs low with subsidies and food stamps (nothing wrong with either really). The “guns” part is what a lot more people are skeptical about because arming the military to the teeth and expansion through NATO, etc., creates the very need for more military by provoking conflict (this is exactly how modern marketing works by “creating the need” as described by Bernays).

  2. auntyuta says:

    http://www.smh.com.au/comment/despite-donald-trump-and-vladimir-putin-the-world-is-closer-to-banning-nuclear-weapons-20161227-gtincv.html

    “Despite Donald Trump and Vladimir Putin, the world is closer to banning nuclear weapons”

    Margaret Beavis wrote the above article in the Sydney Morning Herald.

    Banning nuclear weapons? The world is closer to banning nuclear weapons? Is there still hope
    that this can eventuate? Well, maybe if people and countries together work on this, it can still become true. How much I wish this for the future of all mankind!

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