Virtual Decision Making in the Hall of Mirrors

November 10, 1999

Comment: #331

Discussion Thread:  #s 328, 329, 330


Editorial, "Hamre's Hypocrisy On 'Irrational Exuberance,'" Aviation Week & Space Technology, November 8, 1999

Ten years after the fall of the Berlin Wall, it is now clear that Pentagon has squandered a once and lifetime opportunity to clean up its act and map out a rational sustainable pathway into the future.

Decision makers chose instead to continue on blindly, exuberantly, as if nothing changed, larding new weapons with more expensive versions of old technologies, based on old ideas, all wired together by smoke and mirrors. The Pentagon even helped contractors adjust to downsizing markets by using taxpayer dollars to help finance mergers of defense companies on the promise that these mergers would create future cost efficiencies that would eventually benefit the taxpayer (which never materialized).

The Pentagon now faces a train wreck that did NOT have to happen (taking the form of more force shrinkage, aging weapons, and rapidly declining readiness), when the Pentagon's bow wave of rising financial requirements collides with the growing financial burden of rebuilding infrastructure (roads, bridges, sewers, air traffic control systems, etc ) while feeding and caring for aging baby boomers over the next decade.

It now is beginning to look like the stock market sees trouble brewing and is starting to discount the prices of defense stocks accordingly.

The last three comments (#228, #229, #230) described how Deputy Secretary of Defense recently tried to reverse this development in a silly attempt to jawbone the market into bidding up the prices of defense stocks.

That speech raised a question of values that goes to the heart of military - industrial - congressional complex. Aviation Week has put the issue in stark relief (Reference). Should the Pentagon come to the contractors' aid when they are being punished by a myopic stock market? ... or ... Should the leaders in the Pentagon clean up their act, get realistic, do the job they were hired (and have sworn) to do, and let the market take care of itself?

Chuck Spinney

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