Moving from a War Economy to a Peace Economy

"Behind every question about how to get the United States back on track and improve the lives of average Americans (the so-called 99 percent) lies the necessity for economic conversion—that is, planning, designing, and implementing a transformation from a war economy to a peace economy. Historically, this is an effort that would include a changeover from military to civilian work in industrial facilities, in laboratories, and at U.S. military bases. ..."

This is the beginning of an important article by Mary Beth Sullivan published in the January/February 2012 issue of The Humanist. Read the full article...

Military Spending is the Weakest Job Creator

By Miriam Pemberton

From Foreign Policy in Focus

Even before the supercommittee’s demise, the defense industry and its Pentagon and congressional allies were making preemptive strikes on the next phase: the automatic cuts, half of them from defense, that are supposed to follow the supercommittee’s failure. And with national unemployment rates stuck near 9 percent, the effect of these cuts on jobs has loomed large in their sights.

The Aerospace Industries Association claims to be a top job creator, but independent studies show just the opposite. Photo by US Army Africa.

The largest defense industry trade association, the Aerospace Industries Association, recently funded a study predicting $1 trillion in military cuts over 10 years would add 0.6 percent to the national unemployment rate. The Pentagon then funded its own study that conveniently rounded that prediction up to an even 1 percent. The glaring flaw in these studies is that they make claims about the effect on the economy as a whole as if these military cuts were being made in a vacuum.

The real world is a world of trade-offs. If you’re serious about examining the employment effect of these cuts in the military budget, you have to ask whether doing so would cost more or fewer jobs than doing something else with the money. New analysis by economists Robert Pollin and Heidi Garrett-Peltier at the University of Massachusetts provides the answer. Unlike the studies from AIA or the Pentagon, it is an independent analysis. It was funded by no industry or government agency — that is, no institution with a special interest in the outcome. Updating their previous studies from 2007 and 2009, Pollin and Garrett-Peltier compared the effects on jobs of spending an equivalent amount on the military, on clean energy, healthcare, education or simply returning the money to the private economy in the form of tax cuts. Among these options, military spending was the weakest job creator.

The number of jobs in each category has changed slightly compared to their earlier work — $1 billion doesn’t buy you as many jobs of any kind as it used to — but the overall conclusion is the same. Cutting military spending would cost fewer jobs than all these other options by a factor of between 50 percent and 140 percent.

The larger flaw in the effort to head off defense cuts with inflated jobs claims, of course, is that military spending is not supposed to be a jobs program. We ought to decide which military systems effectively defend our nation, then fully fund those programs and no others. Investing in our national military is like buying insurance. Since insurance purchases don’t do anything to improve their standard of living, families should only buy as much as they need to secure themselves from disaster. Likewise, societies need to buy as much military insurance as they need, but to spend more than that is to squander money that could go toward improving the productivity of the economy as a whole: with more efficient transportation systems, a better educated citizenry, and so on.

This is the point that retiring Rep. Barney Frank (D-Mass.) learned back in 1999 in a House Banking Committee hearing with then-Federal Reserve Chairman Alan Greenspan. Frank asked what factors were producing our then-strong economic performance. On Greenspan’s list: “The freeing up of resources previously employed to produce military products that was brought about by the end of the Cold War.” Are you saying, Frank asked, “that dollar for dollar, military products are there as insurance … and to the extent you could put those dollars into other areas, maybe education and job trainings, maybe into transportation … that is going to have a good economic effect?” Greenspan agreed.

One trillion dollars in military cuts over 10 years would bring us, in real terms, to the same level we spent in 2007. More than we spent during the Cold War.  As much as the rest of the world put together.  More than enough insurance.

New study links TCE with Parkinson's Disease

TCE, which is contaminating Woodstock's groundwater thanks to the carelessness of the local weapons contractor, has long been known to be extremely poisonous, linked with cancer, heart defects, liver and kidney disease, and more. Now a study published in the Annals of Neurology has found a six-fold increase in the risk of Parkinson's disease among people exposed to the chemical. Another civilian legacy of the war economy...

Tax Dollars At War

Tax Dollars At War from the Grace Paley legacy blog.

The Military Spending Fairy

by Dean Baker                          From CEPR Blog 

Faced with the prospect of cuts to the Defense Department's budget, the defense industry is pushing the story of the military spending fairy on members of Congress. They are telling them that these cuts will lead to the loss of more than 1 million jobs over the next decade.

Believers in the military spending fairy say things like "the government can't create jobs," but also think that military spending creates jobs. Under the military spending fairy story, if the government spends $1 billion dollars paying people to do research or to build items related to the civilian economy it is just a drag on the private economy; however if the same spending goes to military related purposes, then it creates jobs.

It's not clear exactly how the military fairy blesses projects to make them helpful to the economy rather than harmful. For example, the highways were built in the 50s ostensibly in part for defense purposes. They made it easier to move troops and military equipment around the country in the event of an attack. Government subsidized student loans were also originally dubbed as defense loans since they were ostensibly intended in part to produce more graduates in science and engineering who could help us compete with the Soviet Union in defense related technologies.

Using this same logic, perhaps President Obama could get the military spending fairy to bless some of his stimulus spending so that it will be economically useful. He could again call student loans "defense loans." He could also have the research into clean energy technologies be viewed as providing alternative sources for energy for the military in the event we are cut off from oil imports in a war. (It makes as much sense as the highway story.) Then the military spending fairy can bless the stimulus as creating jobs.

For people who don't believe in the military spending fairy, the story is simple. During a downturn where there are lots of unemployed workers, any government spending will create jobs, regardless of whether or not it is on the military. In fact, military spending is likely to create fewer jobs than spending in most other areas (e.g. education, health care, conservation) because it is more capital intensive.

When the economy is near full employment, military spending is a drag on the economy. It pulls resources away from private sector uses, lowering investment and increasing the trade deficit. This leads to job losses, which are likely to be felt most severely in manufacturing and construction.

In short, for those who do not believe in the military spending fairy, military spending will cost jobs in either the short-term of long-term. If the spending doesn't make sense in terms of advancing national security, then it doesn't make sense period: end of story.

Military Spending: A Poor Job Creator

By William D. Hartung
Center for International Policy
September 2011

Plans for cutting the federal deficit have raised an important question: what impact would military spending reductions have on jobs?

Contrary to the assertions of the arms industry, maintaining military spending at the expense of other forms of federal expenditures would actually result in a net loss of jobs. This is because military spending is less effective at creating jobs than virtually any other form of government activity.

The question is not whether military spending creates jobs – it is whether more jobs could be created by the same amount of money invested in other ways. The evidence on this point is clear.

• A billion dollars spent for military purposes creates 25% fewer jobs than a tax cut;
• One and one-half times fewer jobs than spending on clean energy production;
• And two and one-half times fewer jobs than spending on education.

And though average overall compensation is higher for military jobs than the others, these other forms of expenditure create more decent-paying jobs (those paying $64,000 per year or more) than military spending does.(1)

Part of the reason that military spending creates fewer jobs than other forms of expenditure is that a large share of that money is either spent overseas or spent on imported goods. By contrast, most of the money generated by spending in areas like education is spent in the United States.

In addition, more of the military dollar goes to capital, as opposed to labor, than do the expenditures in the other job categories. For example, only 1.5% of the price of each F-35 Joint Strike Fighter pays
for the labor costs involved in “manufacturing, fabrication, and assembly” work at the plane’s main production facility in Fort Worth, Texas.(2) A full 85% of the F-35s costs go for overhead, not for
jobs actually fabricating and assembling the aircraft.(3)

In a climate in which deficit reduction is the central focus of budget policy in Washington, a dollar spent in one area is likely to come from cuts in other areas. The more money we spend on unneeded weapons programs, the more layoffs there will be of police officers, firefighters, teachers and other workers whose jobs are funded directly or indirectly by federal spending.

Footnotes:
1) Jobs figures come from Robert Pollin and Heidi Garrett-Peltier, “The U.S. Employment Effects of Military and Domestic Spending Priorities,” Department of Economics and Political Economy Research Institute (PERI), October 2009. The study was commissioned by the Institute for Policy Studies and WAND, Women’s Action for New Directions. For a summary of these points, see “What Kinds of Federal Spending Create the Most Good Jobs?” available at http://www.ips-dc.org/articles/what_kinds_of_federal_spending_create_the_most_good_jobs and “Finding New Ways to Create Jobs” available at: http://www.wand.org/wp-content/uploads/2010/08/fact-jobs-08.pdf

2) U.S. Committee on Armed Services, “Hearing to Receive Testimony on the F-35 Joint Strike Fighter Program in Review of the Defense Authorization Request for Fiscal Year 2012 and Future Years Defense
Program,” May 19, 2011, p. 14.

3) Andrea Shalal-Esa, “Lockheed, Pentagon Vow to Attack F-35 Costs,” Reuters.com, May 12, 2011.

Action Alert: Don't greenwash Woodstock's toxic weapons waste site

The toxic byproducts of weapons components production at Woodstock’s Rotron factory came to the public’s attention in the early 1990s. For years, without our knowledge, our air, water, and soil had been heavily contaminated with trichloroethylene (TCE) and other extremely poisonous chemicals from the plant. After an outcry, Woodstock’s military contractor was declared an official Superfund site, and for 16 years the New York Department of Environmental Conservation has managed a remediation program.

Now the DEC has determined (in a Public Notice dated May 24) that the site “no longer presents a threat to public health and the environment” and proposes to reclassify the site from a Class 2 site (“Significant threat to the public health or environment - action required”) to a Class 4 site (“Site properly closed - requires continued management”) on the Registry of Inactive Hazardous Waste Disposal Sites. Public comments on this reclassification are being accepted until July 1, and we urge you to submit a comment.

Overview of the remedial program

Besides TCE, a powerful carcinogen, other “compounds of concern” at the site are 1,1,1-Trichloroethane (TCA), Freon 113, 1,2-Dichlorethene (1,2-DCE) and 1,1-Dichloroethane (1,1-DCA).

•    Woodstock’s public water supply was extended to neighboring homes so that they wouldn’t have to use the TCE-contaminated water in their wells.

•    Some contaminated soil was removed.

•    Deed restrictions were put in place to restrict future use of groundwater at the site.

•    Engineering controls were put in place to limit the spread of the contamination into groundwater and bedrock aquifers:

A system of 4 recovery wells continuously pumps contaminated water which would otherwise reach aquifers. An additional pair of pumps in wells on a neighboring property (across Route 375 at Fernwood Apartments) is designed to control another contaminant plume.

A separate system of 4 trenches collects contaminated groundwater. The water from the recovery wells and trenches – about 22,000 gallons per day of it – is pumped through a filter that removes the toxic compounds. In 2010, 22.82 pounds of TCE were removed in this way, representing an average TCE concentration of around 350 parts per billion. (The EPA’s recommended maximum level for TCE is 5 parts per billion.)

In addition, some two dozen monitoring wells are checked monthly, quarterly, or semi-annually for leakage of contaminants into the earth’s water system.

Our comments       

In our opinion, the site still represents a significant threat to public health and the environment for the following reasons:       

•    The recovery wells and groundwater trenches rely on an active system of pumps – the pumps are on continuously. If and when they stop working the poisons will make their own way into the environment. The catastrophe at Fukushima reminds us that active safety systems are inherently unreliable. Disruption of electricity supply, and failure of electrical or mechanical components, can and does happen in unpredictable ways. Just in 2010, according to the engineer’s report, the pump in recovery well 6(4) failed, a meter in recovery well 9 jammed, and an unnamed “mechanical issue” affected the sumps in Trenches 1A, 1B and 3.

•    Large quantities of contaminated soil remain on the site. The cost of removing all of it would have been prohibitive. The Final Engineer’s Report states that “A total of up to 150,000 cubic yards of soil appeared likely to exceed soil cleanup objectives for the site.”

•    The geology of the site and the flow of water – to 2 separate streams east and west of the site, and underground – are complex and unpredictable. Monitoring well 12B continues to show high contaminant levels. Unexplained spikes in contaminant levels have been occurring in recovery well 10. While the regular monitoring schedule will hopefully identify new problems as they develop, it cannot eliminate the threat of an unexpected incident spreading contamination to bedrock aquifers.       

In sum, while the engineering systems are doing the job they were designed to do, we cannot say that there is no threat to health or the environment. The threat remains. We can manage it, but the danger of significant health and environmental impacts is only mitigated, not removed. While the contamination remains, it would be false – and could lead to unwarranted complacency – to state, by reclassifying the site, that there is no longer a threat.

Address Public Comments about the Rotron-Woodstock site to:               
Mr. William Bennett
NYSDEC
625 Broadway
Albany, NY 12233-7014
Phone: 1-866-520-2334
wbbennet@gw.dec.state.ny.us