Lockheed Martin Job Layoffs are Good for the Economy

http://www.policymic.com/articles/10190/lockheed-martin-job-layoffs-are-good-for-the-economy

"Lockheed Martin's vice president for legislative affairs, Greg Walters, recently announced that if the $500 billion in automatic cuts to defense spending mandated by last year's "supercommittee" budget deal go through as planned, it may have to issue layoff notices to the "vast majority" of its 123,000 employees.

The announcement is being spun as an attempt by the largest player in the defense contracting industry to influence the political environment before election day, by linking cuts in defense spending with massive job losses. However, before heeding the hollow pleas of Washington's most favored industry, we should clarify the real economics at play here.

According to USASpending.gov, Lockheed currently has roughly $302 billion in defense contracts, which is nearly half of the entire defense budget for fiscal year 2012. Of course, not all of this money is disbursed in one year, but it gives a good idea of the magnitude of Lockheed's dependency on revenue from the government. Many of the required cuts in defense spending will likely come from these contracts, and while it is doubtful that the vast majority of Lockheed's employees will actually be axed if the cuts go through, the company is required by law to give a two-month notice before layoffs due to its reliance on federal money. Thus, given the uncertainty about what may actually be cut, Lockheed must cover its bases and put everyone on notice.

The goal here, clearly, is to lead politicians to the conclusion that a bunch of layoffs at Lockheed would be disastrous for the economy. However, that Lockheed has a vice president dedicated solely to "legislative affairs" speaks volumes about the composition of the company. This is an organization which thrives on public money. Furthermore, it is an organization which, by and large, produces the tools of war. The vast majority of Lockheed's employees are engaged in designing, producing, and maintaining weapons systems, and they are paid to do so by everyone else in the country, through our tax dollars.

Given the aggressive nature of our foreign policy in recent decades, I would actually prefer that my taxes didn't go to Lockheed. I would prefer that the people employed by Lockheed were engaged in other industries like education or construction which actually increase the wealth of our society, instead of destroying the wealth of other societies. By continuing to devote large portions of national output to the defense industry, we are implicitly handicapping the growth of more useful enterprises.

This is one of the most basic concepts in economics: opportunity cost. Spending time, money, or any other scarce resource to one end prevents it from being used for any other ends. Even deficit spending, which is the supposed magical elixir for when the economy tanks, follows this basic rule. While deficit dollars may not be scarce because the Fed can theoretically print an endless supply, the resources which are purchased with those dollars are bound to reality.

The defense cuts are part of a package intended to reduce the government's reliance on deficit spending, but the greater issue here is that all defense spending, whether funded by taxes or Treasury bonds, is a deadweight loss to society. Ideally, a society will devote the minimum necessary resources to ensure an adequate defense. I am rather unconvinced that our military adventures in the Middle East and Africa, and sprawling bases scattered across the globe, contribute one iota to our collective defense. Indeed, the concept of "blowback" asserts that our defense is actually undermined by much of this activity, by creating new adversaries among the populations affected.

Yes, layoffs are damaging to the people affected by them. Their incomes will be sharply reduced, and they will have less to spend elsewhere in the economy. But an individual's contribution to the economy is not measured by what they spend, but what they produce. And by gradually winding down the bloat and excess in the defense industry, we are freeing these people to pursue vocations which improve lives instead of destroying them."

Bloat and excess of the Defense Industry? That could only be said by a person unaffected by the layoffs. You're a sick person. Defense including the space industry has helped create more things than it destroys. Only an ignorant person thinks in this manner. You top the list. You are also forgetting all of the spin off jobs related to supporting these industries. I guess those people are SOL?

The problem with the cuts to the DOD and such is that the Dems will just spend the money elsewhere and we'll still have the same deficits.

So we lay off a ton of defense contractors, after the layoffs we add a ton of people to the unemployment numbers, a ton of people forced on unemployment and various other government programs for assistance, More people losing their homes, more people defaulting on credit and obligations. So we basically take productive members of society and turn them into useless government dependents that are still on the government dole, I'm still trying to figure out how we are going to save money.

Defense including the space industry has helped create more things than it destroys. Only an ignorant person thinks in this manner.


Actually, a sophomore in a college economics class will tell you that you are wrong. Look at the economic growth in nations who do not waste their investments in disposable goods, but invest in capital expenditures which increase a nation's productivity and GDP. Tell me how a tank produces anything in our economy. Have you ever been in a factory which actually produced something? Do you understand that same tank and what was spent on it could be given as a tax credit for an American Manufacturer to automate and upgrade its capital equipment which cuts the unit cost per labor hour and makes that industry competitive in the world. Nope, when you pour as much as we have been pouring down the rabbit hole.....it impacts your economy, and as the joint chiefs have repeatedly stated.....the United States economy growing and expanding is the best defense policy for America. Your understanding of basic economics would not allow you to pass the course, and you think world powers are measured by the toys they have....yes for a while....but the Soviet Union had massive toys....which crashed their economy.

2seaoat wrote:Defense including the space industry has helped create more things than it destroys. Only an ignorant person thinks in this manner.


Actually, a sophomore in a college economics class will tell you that you are wrong. Look at the economic growth in nations who do not waste their investments in disposable goods, but invest in capital expenditures which increase a nation's productivity and GDP. Tell me how a tank produces anything in our economy. Have you ever been in a factory which actually produced something? Do you understand that same tank and what was spent on it could be given as a tax credit for an American Manufacturer to automate and upgrade its capital equipment which cuts the unit cost per labor hour and makes that industry competitive in the world. Nope, when you pour as much as we have been pouring down the rabbit hole.....it impacts your economy, and as the joint chiefs have repeatedly stated.....the United States economy growing and expanding is the best defense policy for America. Your understanding of basic economics would not allow you to pass the course, and you think world powers are measured by the toys they have....yes for a while....but the Soviet Union had massive toys....which crashed their economy.

Seaoat, you are more intelligent than that. VELCRO is one product created by the defense and space industry that has revolutionized many civilian items for sale in stores across the country. Please tell me you are just yanking my chain here because really, you are smarter than this.

PACEDOG#1 wrote:

2seaoat wrote:Defense including the space industry has helped create more things than it destroys. Only an ignorant person thinks in this manner.


Actually, a sophomore in a college economics class will tell you that you are wrong. Look at the economic growth in nations who do not waste their investments in disposable goods, but invest in capital expenditures which increase a nation's productivity and GDP. Tell me how a tank produces anything in our economy. Have you ever been in a factory which actually produced something? Do you understand that same tank and what was spent on it could be given as a tax credit for an American Manufacturer to automate and upgrade its capital equipment which cuts the unit cost per labor hour and makes that industry competitive in the world. Nope, when you pour as much as we have been pouring down the rabbit hole.....it impacts your economy, and as the joint chiefs have repeatedly stated.....the United States economy growing and expanding is the best defense policy for America. Your understanding of basic economics would not allow you to pass the course, and you think world powers are measured by the toys they have....yes for a while....but the Soviet Union had massive toys....which crashed their economy.

Seaoat, you are more intelligent than that. VELCRO is one product created by the defense and space industry that has revolutionized many civilian items for sale in stores across the country. Please tell me you are just yanking my chain here because really, you are smarter than this.

Right...velcro...it's made such a change in my life. How would we live without it? The MIC sucks the life out of the mainstream economy, both by producing only products for war and by conducting wars. None of that activity contributes one iota to the quality of life for our citizens. Further, the evidence suggests that our wars of aggression have only increased world sentiment against us.