I recently read a story about the C-130 Hercules transport plane (Lockheed Martin's Herculean Efforts to Profit From Defense Spending: The Epic Story of the C-130, TomDispatch, March 10, 2013). The author is Jeremiah Goulka, a former RAND Corporation analyst. It is the story of a powerful industry (the military-industrial complex) extracting exactly what it wants from the U.S. taxpayer, as opposed to the other way around. It puts profit above all else, above even its ostensible purpose: i.e. the nation’s defense. What stands revealed is that our capitalist system’s alleged merits — such as efficiency, competition leading to lower costs and better quality, profit as an ennobling motive, etc. — are illusions, and that our government of the people, by the people, for the people is a farce.
The genesis of the C-130 “Herk” was the Korean War, when the Air Force decided it wanted a new mid-sized transport plane. Lockheed won the design competition, and a few years later C-130s started rolling off the line. The Herk proved a versatile workhorse: it could ferry 21 tons of cargo, land on soft and short runways, drop paratroopers from its enormous rear door, and rain hellfire from the skies. But after 25 years of stocking its fleets with C-130s the Pentagon decided it had more than enough of them, so the Carter administration stopped seeking Herk funding from Congress.
Lockheed, facing bankruptcy as its cash cow dried up, successfully lobbied Congress for a taxpayer bailout to the tune of about $1 billion. At the time this was almost unprecedented. (How quaint!) Soon, the company was caught spending millions bribing foreign governments to buy its planes. Apparently this was unprecedented too, and it pushed Congress to pass the Foreign Corrupt Practices Act. (Whereas in 2010 President Obama himself inked the largest arms deal in U.S. history with a consortium of Middle Eastern countries, providing a $123 billion windfall for the nation’s largest defense contractors—including, of course, Lockheed.)
Stateside, Lockheed wouldn’t take no (and $1 billion) for an answer. So what if the Pentagon didn’t want more C-130s? Lockheed would successfully lobby Congress to fund via earmarks a new fleet of C-130s anyway. To be fair, the Air Force did request five Herks. Congress funded 256. This feat was accomplished by Lockheed spending millions on political donations, and many millions more on lobbying. It was such a winning formula for Lockheed that it continues to this very day, despite the company’s #1 ranking on the Project on Government Oversight’s Federal Contractor Misconduct Database. (Rounding out the top five on the list are Boeing, General Dynamics, Northrop Grumman and Raytheon — defense contractors all.) In 2005, Secretary of Defense Donald Rumsfeld tried to kill Lockheed’s new generation C-130J program. He failed. In 2011 Lockheed was the beneficiary of over $42 billion in federal contracts.
Pay-to-play is nothing new. But defense contractor lobbying is particularly perverse: those dollars Lockheed spends lobbying Congress to buy planes the military doesn’t want are tax dollars. Here’s Goulka:
“According to its 2011 annual report, ‘82% of our $46.5 billion in net sales were from the U.S. Government, including 61% from the Department of Defense.’ And don’t forget that a significant part of the 17% of its sales that went to international customers in 2011 were actually paid for by Uncle Sam under the rubric of foreign military aid.”
Since the 1950s it has not mattered one whit which party controls Congress or the White House. Lockheed always wins.
I recently read a story about U.S. health care costs (Bitter Pill: Why Medical Bills Are Killing Us, Time Magazine, March 4, 2013). The author is Steven Brill, an investigative journalist. It is the story of a powerful industry (health care) extracting exactly what it wants from the U.S. taxpayer, as opposed to the other way around. It puts profit above all else, above even its ostensible purpose: citizens’ health. What stands revealed is that our capitalist system’s alleged merits —such as efficiency, competition leading to lower costs and better quality, profit as an ennobling motive, etc. — are illusions, and that our government of the people, by the people, for the people is a farce.
Brill spent seven months analyzing patients’ bills from hospitals, “doctors, drug companies and every other player in the American health care ecosystem.” He deciphered the cryptic billing codes and compared the corresponding charges to the amount Medicare would pay. The difference was frequently many multiples more. Often patients were billed exorbitant rates for items Medicare does not pay for at all, like reusable blankets. The most tragic aspect of all of this is that the highest costs are charged to the uninsured — typically the working poor, who have no employer-subsidized insurance and yet do not to qualify for Medicaid. In other words, those least able to pay.
Taking center stage in Brill’s piece are the numbers. This is not as wonky as it sounds: the numbers paint some vivid pictures. For example: on a patient’s bill one generic Tylenol tablet costs $1.50, yet as Brill points out, “You can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power.” He continues:
“We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy. We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office. We spend two or three times that much on durable medical devices like canes and wheelchairs, in part because a heavily lobbied Congress forces Medicare to pay 25% to 75% more for this equipment than it would cost at Walmart.”
And here we get to the why of it: “a heavily lobbied Congress.” (To which I would add “a heavily lobbied president.”) But perhaps the most revealing numbers are these:
“According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.”
Yes, you heard that right: the health-care-industrial complex spends far more on lobbying than the military-industrial complex and Big Oil combined. Thus it should come as no surprise that the Affordable Care Act (“Obamacare”) cemented in place the overpriced, inefficient and wholly inadequate profit-driven health care system we have today.
It is disheartening to ponder how to fix this state of affairs, short of a revolution. With 270,000,000 guns in the country however, that’s... probably not going to work out very well for many people. Instead, I offer this: A People’s Lobby. If our government is for sale — and all signs point to yes — I say let’s buy it back. Want to shrink the defense budget? All we need is $1.54 billion to outspend the defense lobby. Worried about global warming? A mere $1.4 billion will conquer Big Oil. Single payer health care? Well, that’ll cost us $5.37 billion. Sure, it seems like a lot of money. But in fact we can buy Congress and the presidency for the low, low price of $26.34 for every man, woman and child in the U.S.
It will be so worth it. Who’s with me?