John McCain grossly exaggerates the power of defense contractors, and unfairly criticizes Patrick Shanahan.As Sydney Freedberg covered for Breaking Defense yesterday, Senator John McCain of Arizona was rather tough on the administration’s nominee to be deputy defense secretary. C-SPAN has the video, at roughly the 3:02:00 mark:
I want to move forward as quickly as I can with your nomination, [but] I am concerned. Ninety percent of defense spending is in the hands of five corporations, of which you represent one. I have to have confidence that the fox is not going to be put back into the henhouse.
As with steel, it isn’t now, and it won’t be in the future.National security, the late economist Merton Miller once reminded me, gets invoked to justify all sorts of tomfoolery. Last month, I wrote about the Trump Administration’s Section 232 investigations into steel imports, concluding that they were simply not a threat to national security. Indeed, as the editors of the Wall Street Journal wrote last week, “the case against steel tariffs is so overwhelming that it’s hard to believe even [Commerce Secretary] Ross can find a way to justify it.” The Trump Administration is also considering imposing duties on aluminum imports, and has opened another investigation under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862). However, as with steel, imported aluminum is not a threat to national security now, and it really cannot conceivably be in the future. In the first place, military uses of aluminum are a small portion of American consumption today. In the second place, as I will explain in detail, Canada. Quite to the contrary, cheap imported aluminum has actually been beneficial to American national security, just by driving down the cost of military aircraft.
Volvo’s sale of Renault Trucks Defense won’t be a test of anything.The report in Defense News this week on how “Three bidders emerge in battle to buy Renault Trucks Defense” contains a prediction of just who won't win that auction. For some time, Volvo has been aiming to sell RTD, and bids are now in from three firms: the Franco-German KMW-Nexter Defense Systems (KNDS), the Belgian Cockerill Maintenance & Ingénierie (CMI), and the American private equity firm Advent. The article was largely built on two unnamed sources, and provided a quick judgment of the art of the possible:
General Dynamics is unlikely to be on the short list as it is “impossible” France would accept a bid by a U.S. company, the first executive said. He pointed to the lack of reciprocity due to the Buy America Act and the America First campaign as the reason.
Don’t ask for audits in the middle of the war on ISIS.In a report this week, Amnesty International expresses its annoyance that “the US Army failed to keep tabs on more than $1 billion worth of arms and other military equipment in Iraq and Kuwait.” As the human rights group continues, “the [Defense] department’s Golden Sentry program,” carried about by the End-Use Monitoring Division of the Defense Security Cooperation Agency (DSCA), “is mandated to carry out post-delivery checks” to ensure that weapons do not wind up in miscreant hands. After an audit in September 2016, obtained recently by Amnesty through a Freedom Of Information Act request, the US Army acknowledged during that brutal militias had probably gotten hold of some of the guns it had given to the Iraqi Army. That’s not shocking given the chaotic nature of that civil war. According to the Defense Department’s Inspector General, the main shortcoming was that “the use of manually populated spreadsheets increased the risk for human error when inputting and updating equipment data.”
For my part, I don’t think that the Mahdists are just exploiting a mistake in cell C26.