Can America Kick The Habit?
By Sanford Gottlieb 224 pages, Westview Press, $65 ($18.95 paperback) THE COLLAPSE of the Soviet Union was apparent by 1990. The United States was no longer threatened with a missile attack or Russian military expansion into territory of our European allies. However, as Gottlieb points out, there has been no decrease in our defense budget commensurate to the decrease in danger to the nation. Why? Gottlieb's answer is the title of his informative book "Defense Addiction." The addiction is a result of 50 years of defense industries' becoming dependent on government handouts, thereby losing any initiative to enter into the competition of the market. In Gottlieb's words, "It was hard for defense contractors to leave their cocoons and compete in the turbulent markets of the private global economy." From hundreds of interviews throughout the country with people involved in or affected by the government's defense programs, Gottlieb learned that the chain reaction of military spending produced a variety of vested interests seeking the benefits of the programs. "Defense Addiction" tells of defense contractors' earning windfall profits from cost overrun contracts and non-competitive bidding. General Dynamics' stock rose 553 percent between 1991 and 1995, and its CEO, William Anders, left the company in 1994 after three years' service "with a personal bonanza of $38.7 million." Defense company profits between 1970 and 1983 reached 20.5 percent, as a percentage of assets, compared to 13.3 percent at commercial firms. As late as fiscal 1995, there were 2,340,000 defense jobs. Gottlieb writes: "For skilled defense workers, wages and benefits were excellent." Realtors, restaurants and shopkeepers near defense industries or military bases also benefited from spending by defense personnel. Congressmen who voted for defense appropriations were rewarded with campaign funds from defense firms and election day votes from defense employees, many of whom worked for thousands of sub-contractors strategically located in key Congressional districts. The Reagan era, Gottlieb notes, saw "record levels of military spending" without considering the consequences of increasing government debt, government cuts in domestic spending and the lack of conversion planning. …