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Economic Treason: A look at Wisconsin and arms manufacturing

"We're broke!" is the GOP blandishment used to justify imposing hardship on the middle class as Republicans go about the work of transferring more and more wealth to the already very well off. A few days ago, in the case of Wisconsin I highlighted Scott Walker's famous number - $137 million in an immediate shortfall requiring drastic action. In this case, a forked-tongue claim used to usher in union busting and demonization of school teachers.


However, at the same time the Milwaukee Journal-Sentinel was publishing a story on defense contracts in the state.


It read:


[In terms of defense spending] The Army was the largest buyer of Wisconsin goods and services, with more than $7.2 billion in purchases.


Oshkosh Corp. has recently geared up to produce 23,000 Army trucks and trailers in a five-year deal valued at $3 billion. It is the largest Wisconsin-based defense contractor.


And Marinette Marine Co. expects to receive billions of dollars to build Navy combat ships. More than 600 people attended a recent vendor fair sponsored by the company in Green Bay.


Paraphrasing the famous filmmaker Michael Moore this week, the United States is not broke. It is awash in cash.


Arms manufacturing (defense spending) is a protected industry in the US. It is an example of socialism for the private sector. It is awash in cash.


And it is not hard to understand why businesses in Wisconsin, and every state, wants a piece of it. Once established, it's guaranteed business, underwritten by the taxpayers. The workers are protected.


You can throw teachers and firefighters and policemen out of work because you want to throttle public services and destroy education for the middle class. Or you ship all the jobs overseas to China if you are in non-military domestic production because labor is an order of magnitude cheaper there.


But arms-manufacturing labor is holy. It competes only with itself internally.


And it is easy to see by the numbers from it that the US is definitely not broke. There is money to solve even fake crises like the one Scott Walker has brought on Wisconsin.


"Weinbrenner Shoe Co. of Merrill recently won a $9.8 million contract to make hot-weather boots for the Army, Navy, Air Force and Marines," continues the Journal Sentinel piece.


You go to Target or Wal-mart to buy shoes, socks, any garments.


This country used to make such things but that was all thrown away. Where are these goods made now? What do you get to buy? What is it that you can afford? Rhetorical questions to which everyone knows the answer. Made in China.


This does not begrudge the jobs of shoemakers for the US military. It is only to illustrate that when there is a will to preserve jobs and a good living wage, the US government certainly will do it. If it is the right industry, connected to arms manufacturing and defense.


"If you are struggling like most companies are in this down economy, there is definitely a place for military business," the vice-president of the Wisconsin shoe company told the newspaper.


And the man is certainly right. As far as the argument is taken.


However, the larger picture is one that asks questions about fundamental fairness and rigging of the economic system, rigging in which middle class work has been compressed in the private sector until it will no longer support a middle class, with the only parts left being in arms production, essentially subsidized by the taxpayer and government. It is a state of affairs which also reduces labor to a game of musical chairs with very poor odds in which one needs to be a lucky person to get a job in manufacturing protected by defense spending.


A graphical breakdown on defense spending in Wisconsin, furnished by the newspaper, is here.


If you click out to it you'll also notice one of the big recipients of dollars in the Wisconsin economy is General Electric. Overall, GE is a company now substantially into the business of national looting and tax avoidance, like many others.


As far as Wisconsin is concerned, the defense money is for the GE Healthcare subsidiary.


And despite the images in current General Electric commercials of happy workers doing a country line dance to Allen Jackson's "Good Times" or an animated elephant prancing along, GE's jolly mood has nothing to do with the interests of average Americans.


When it's private sector work is dependent on unprotected labor, GE outsources. Light bulbs? Make them overseas.


On the other hand, defense spending, for anything, is always good to take because that's guaranteed by the taxpayer.


Nobel laureate Paul Krugman put it this way in a column from January


A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that's more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success? ...


Take the case of General Electric ... fewer than half its workers [are] based in the United States and [with] less than half its revenues coming from U.S. operations, G.E.'s fortunes have very little to do with U.S. prosperity.


By the way, some have praised Mr. Immelt's appointment on the grounds that at least he represents a company that actually makes things, rather than being yet another financial wheeler-dealer. Sorry to burst this bubble, but these days G.E. derives more revenue from its financial operations than it does from manufacturing ...


The Wisconsin economy, as it stands now, is shown by a chart at the Bureau of Labor Statistics here.


Mass layoffs increased in January, probably because of the end of sales jobs for the holidays.


The overall employment trends, as will the rest of the country, aren't great. Employment is increasing in leisure and hospitality, jobs which generally don't pay very well. Manufacturing also shows a significant rise.


Education also makes up a substantial part of the workforce. And this is the profession that is locally and nationally threatened.




Also worth noting is an article from Minyanville on a real protected part of arms-manufacturing.


It begins:


Right now, federal prison inmates in correctional institutions across America are making parts for Patriot missiles.


They are paid $0.23 an hour to start, and can work their way up to a maximum of $1.15 to manufacture electronics that go into the propulsion, guidance, and targeting systems of Lockheed Martin's (LMT) PAC-3 guided missile, originally made famous in the first Persian Gulf conflict.


This is arranged by Unicor, a company seemingly precisely for the delivery of prison manufacturing labor. Happily, the workers won't be attacked for being part of a selfish union needing busting.


One fully understands why Lockheed Martin may like prison labor. It's guaranteed and protected, very well protected, so to speak.


Naturally, it smells immoral. The story has a number of national security experts furrowing their brows over the implications and ludicrously speaking about inefficiency.


You don't need to be an economist to figure out prison labor is inefficient. Or that efficiencies in the US economy, if you actually want to call them that, exist only to increase inequality. Inequality breeds inefficiency.


Prison-delivered arms manufacturing doesn't look right. It creates a shabby impression. These are the thoughts contributed by experts on arms manufacturing. There is also pro and con talk about "maintaining the defense industrial base."


Break those union parasites, though. And ship everyone else's jobs off to China.


Why Are Prisoners Building Patriot Missiles? -- is here. Highly recommended.


This post was originally published at Dick Destiny blog. Have a matter or firm you'd like to see covered in the Economic Treason series? Drop me a note at webmaster at dickdestiny dot com or leave a message in the comments section of the parent article there.


 
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