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Obama = Big Profits for Defense Contractors

Recs

11

March 01, 2009 – Comments (5) | RELATED TICKERS: NOC

Here's an excerpt from Justin Raimondo's excellently researched article on AntiWar.com:

"Under Obama, the military budget will rise by 4 percent, and this isn't counting the costs of Iraq and Afghanistan. As Cato Institute research fellow Benjamin H. Friedman puts it: "Many Americans believe that Barack Obama and the Democratic majority in Congress will lower defense spending and restrain the militaristic foreign policy it underwrites. The coming years should destroy that myth." 

Yes, but myths die hard. It will take a couple of shiploads of flag-draped coffins – and perhaps a couple of alarming incidents in Afghanistan and environs – to wake up Obama's liberal supporters to what they're presently enabling with their silent complicity. In the meantime, the creaking wheels of empire are turning as we gather our forces for another even more perilous mission that will take us straight into the fabled graveyard of would-be world-conquerors otherwise known as Afghanistan. Why? How? To what purpose? A thousand questions raise themselves up, like the first crocuses of spring – but the Obama administration isn't answering, because no one of any importance is asking. Just little old me – and, maybe you. And maybe Rachel Maddow, now and then: and that's pretty much it. Surely the alleged "antiwar movement" isn't interested – they're too busy hailing Obama's election.  

The President's budget requests for Iraq and Afghanistan total $75 billion through the fall, and $130 billion for next year. That means we'll be spending nearly $11 billion per month for at least the next year and a half."

So, are you selling General Dynamics, Raytheon and Northrop Grumman based on Obama's rousing address last week? If so, I think you are delusional. American taxpayers are worse off for the existence, but American taxpayers that are also shareholders will be a little less worse off.

David in Qatar

 

 

5 Comments – Post Your Own

#1) On March 01, 2009 at 3:02 AM, PrestonCheek (31.75) wrote:

David I enjoy your articles and I think you are right as well.

 

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#2) On March 01, 2009 at 4:10 AM, walt373 (99.79) wrote:

Very interesting. What do you suppose is the reason for the recent selloff in General Dynamics? Just people who are misinformed and believing this "myth"? I've been eyeing this stock.

Also, with the US's current huge amount of spending, the debt situation, and other long-term obligations like Social Security, I would think the US would try to cut back in some other areas like defense, if not in the next few years, then in the long-term. What is your take on this?

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#3) On March 01, 2009 at 4:43 AM, whereaminow (34.29) wrote:

walt373,

I think it's a combination of three factors: one being the myth that Obama doesn't want war (he most certainly does), two being the myth that government spending will decrease during a Depression (it certainly will not), and three being the general pessimism of investors (any perceived bad news, like Obama's speech, causes an overreaction.)

Let's say, just for hypotheticals, that the U.S. empire folds. Does that necessarily mean that a company like General Dynamics will fold as well? Actually, no. Are you familiar with Krupp? Krupp was the German arms dealer that was arguably the most powerful company in the world from 1870-1945. They armed the Reichs and held more sway than, arguably, Hitler himself.  When the Nazi empire fell, the company survived. Even after top management was convicted at Nuremburg, many were eventually released and returned to run the company in peacetime operations.

The lesson here is that government contractors weild tremendous power. Even after the current political system deteriorates, that vacuum will be filled by merely shuffling the seats of power. People still prefer being ruled by others, than being self reliant. Companies like General Dynamics should thrive in the next political generation as well.

David in Qatar

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#4) On July 07, 2010 at 12:09 AM, DaretothREdux (48.06) wrote:

Bump. Just because when you're right you should get more than 7 recs.

Dare

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#5) On July 07, 2010 at 10:16 AM, walt373 (99.79) wrote:

Wow this is old :) But absolutely correct and amazing timing to boot. David called the exact bottom of the defense stocks like GD, NOC, and RTN. Great job. I wish I had listened and bought more haha...

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