The defense industrial base is collapsing. Blame monopolies and Wall Street, writes the DOD. Meanwhile, the Pentagon's Deputy Secretary expresses concern over "extreme consolidation."
Matt, regarding the Defense Industrial Base (DIB) monopoly, I would also add regulatory burden as an important factor. DoD regulations generally have good intentions, but they make it very costly and difficult to enter the market. Regulations are the biggest gifts to monopolists.
All 300,000+ DoD contractors and subcontractors will be subject to this new regulation. The costs will be well north of $100,000 for many smaller businesses. So, what will the Lockheed Martins do? Buy the companies up or do the same functions in-house.
Wonderful! Thank you for opening my eyes to this incredibly important subject. Also, this typo (?) put a smile on my face:
"But the problem of consolidation in defense is much broader, hitting sectors such as military vehicles, batteries, shipbuilding, printed circuit boards, machine tools, space, and *unmannered* drones."
Monopolies resulting in one or nearly one supplier in so many areas of US commerce have me very concerned; particularly regarding national security, as this article lays out so clearly. That said, I'd like to switch to a lighter topic:
I wish to compliment you, Matt, for your comments regarding the Society for Human Resource Management (SHRM). You wrote, "SHRM is this insane mash-up of corporatist lobbying mixed with social justice rhetoric…" I fully concur with your assessment.
My now ex-wife, now a VP of HR, got the SHRM religion several years ago when she was pursuing an HR certification (through SHRM, of course). I remember looking at her banal SHRM magazines and other high-falutin' paraphernalia and just shaking my head, thinking 'this is why HR has such a bad reputation.'
Also, the grand pooh-bahs and loyal members of SHRM pronounce it as 'Sherm' in conversation. I suggested to my ex they should instead pronounce SHRM as: 'shroom. She didn't like that ;) but I think that pronunciation is more accurate, quite frankly.
"Facebook employs over 400 law firms. Not because it needs the advice, but to conflict them out of representing opposition."
If this is the case wouldn't this be subject to anti-trust law as well? Could Facebook and those 400 law firms be collectively sued to break up this legal syndicate?
"The Great Reset" -- is about how US empire could survive without M4A, without $30/month min salary, without survival checks of $4K/month for duration of Covid, endless wars for oil control, against "godless" socialist countries, etc., etc. And -- endless distraction with "gay and abortion rights" wars will no longer be enough - oligarchs are united to preserve their DNC+GOP monopoly but see dangers coming.
And - the accounting is coming soon. By far the highest interest of Biden government and its oligarch cabal is that Russia-gate immense hoax – the scam of the century -- will NOT / will NEVER be exposed. There has been collusion between media, Democrat party, Hi-Tech companies and the deep state for now five years.
The entire anti-Russian fairytale is a deliberate fabrication -- the worst scam in US history is neoliberals’ Russia-gate hoax. They lost to a TV host. Instead of reflection, they latched onto a moronic conspiracy theory -- this includes the proven false accusations that Russia gave WikiLeaks Hillary's emails (hence total silence on Assange torture). Assange must be silenced -- all the plotters/players agree...
There has been collusion between media, Democrat party, Hi-Tech companies and the deep state for now five years. The Russia-gate hoax and Ukraine-impeachment “entertainment” was concocted by Obama/Hillary/Biden/Pelosi, Schumer, Schiff, etc. and their intelligence and DNC executives on behalf of their Wall Street and military industry donors. That lying team is now back in power -- Kamala Harris (and her sister) and Neera Tanden are Hillary's protégés; Pete Buttigieg was promptly rewarded for his role of election theft in Iowa.
Remember, Clapper, Brennan & Hayden trio were among former 50 intelligence officials stating that Hunter-laptop is classical “Russian disinformation”.
- They were also key promoters of the three-year Russia-gate hoax.
- They were also key intelligence executives in Obama/Biden/Hillary government – the government which hunted Snowden (forcing Bolivian plane with Bolivia’s president to land to search it) and armed Al Qaeda (including “white helmets” hoax) and staged all chemical attacks in Syria to remove its government.
When asked about Hunter's laptops Pelosi stated "All roads lead to Putin"; commenting on Capitol invasion Schumer said - "worse than Pearl Harbor and 9/11"... Lying team at work
Trump’s utter incompetence in handling Covid-19 created the human and economic catastrophe that will be called - Trump-virus. He brought into government religious extremism and racism.
Now we need a "great reset" to desperately try to postpone US economic and global influence decline... Censorship and more distraction a la "gay, abortion, and impeachment" wars are likely.
Thank you for the wonderful article as always. I know these articles must take a huge amount of effort, but have you considered adding some level of sources to them? To me, what you write about is often so shocking and something I had never heard about or read about before. Your articles often shape my thinking on politics and policy quite deeply. I want to make sure I'm doing my due diligence and that I'm not just believing anything I read on the internet, which I often fault others for doing. Of course I can always find sources myself, but some basic ones would help!
A nice chart of the decrease in semiconductor manufacturers over the last two decades. Even recently Intel wasn't a monopoly, but the newer process nodes cost billions of dollars per fab, and billions more in R&D to make those fabs work. This is a prime reason AMD split off its fab business into Global Foundries, and a reason Global Foundries isn't manufacturing on the most recent nodes.
Something I've been trying to figure out, and I'd appreciate any input on this matter.
What's the difference between a government and a monopoly? The only thing I can imagine is scope, since everyone's got self-interest mixed in somewhere.
The death of Section 230 would benefit monopolists. User generated content is literally why I am reading this article and is at the heart of today's internet. Moderating such content is already a nightmare, one that only grows more complex as a site grows. Once a site hits a certain size, automated measures are the only solution. Furthermore, if a small site is inundated with problematic content, there is literally nothing they can do. Trolls call this raiding.
I entirely agree that large tech platforms are abusing Section 230. Its restructuring is guaranteed. Thus, the smart monopolist plans accordingly to rig the system in their favor.
Imagine one of Substack's competitors were to discover they are losing marketshare to Substack and that content creators are migrating to receive a larger percentage of the profits from their work. However, Substack's creator base is much smaller than the incumbent platform, as is their readership. The upper echelons of big tech are a pretty close knit circle. One day, you're getting a beer with your friend from Twitter. You start complaining about this newcomer nipping at your heels and they lament how hard it is to deal with the Far Right/QAnon types of communities on their platform. An idea is born.
Selling the influencers in these spaces is very straightforward, and they bring their readership with them. Under Section 230, though Substack may be tarred and feathered by this new influx, they are still operating a perfectly legal venture. If sites are held responsible for the content that is on them, the incumbents and the obscure will be the only ones able to function, as anyone traversing the path will find their journey all the more difficult.
I'm already seeing comments on this blog, which I've followed for years, of a nature that were not there before. I highly recommend anyone who has not watched the Social Dilemma to do so and think about what monetary value their behavior may be worth in this new light.
Looks like authoritarian Russia is the leading country in the world in weapons development (for example, hypersonic missiles) Hicks looks to believe that competition is the key to developing weapon systems, etc. Good old American moxy capitalism. The same moxy capitalism that is saving the United States from the covid pandemic. The MIC remains in good hands.
Matt, regarding the Defense Industrial Base (DIB) monopoly, I would also add regulatory burden as an important factor. DoD regulations generally have good intentions, but they make it very costly and difficult to enter the market. Regulations are the biggest gifts to monopolists.
There is a new regulation coming called the Cybersecurity Maturity Model Certification (CMMC). CMMC puts well-intentioned security requirements on the entire DIB. However, its costs are likely to shrink the DIB even more in my estimation. It will also stifle new, innovative companies from entering the DoD contracting world. I wrote about it here: https://security-economics.com/2020/12/17/cybersecurity-maturity-model-certification-cmmc-creates-a-big-barrier-to-entry-for-small-companies/.
All 300,000+ DoD contractors and subcontractors will be subject to this new regulation. The costs will be well north of $100,000 for many smaller businesses. So, what will the Lockheed Martins do? Buy the companies up or do the same functions in-house.
Wonderful! Thank you for opening my eyes to this incredibly important subject. Also, this typo (?) put a smile on my face:
"But the problem of consolidation in defense is much broader, hitting sectors such as military vehicles, batteries, shipbuilding, printed circuit boards, machine tools, space, and *unmannered* drones."
Monopolies resulting in one or nearly one supplier in so many areas of US commerce have me very concerned; particularly regarding national security, as this article lays out so clearly. That said, I'd like to switch to a lighter topic:
I wish to compliment you, Matt, for your comments regarding the Society for Human Resource Management (SHRM). You wrote, "SHRM is this insane mash-up of corporatist lobbying mixed with social justice rhetoric…" I fully concur with your assessment.
My now ex-wife, now a VP of HR, got the SHRM religion several years ago when she was pursuing an HR certification (through SHRM, of course). I remember looking at her banal SHRM magazines and other high-falutin' paraphernalia and just shaking my head, thinking 'this is why HR has such a bad reputation.'
Also, the grand pooh-bahs and loyal members of SHRM pronounce it as 'Sherm' in conversation. I suggested to my ex they should instead pronounce SHRM as: 'shroom. She didn't like that ;) but I think that pronunciation is more accurate, quite frankly.
@Matt Stoller
"Facebook employs over 400 law firms. Not because it needs the advice, but to conflict them out of representing opposition."
If this is the case wouldn't this be subject to anti-trust law as well? Could Facebook and those 400 law firms be collectively sued to break up this legal syndicate?
Fascinating subjects, love your writing style. You've got a new fan!
Concerning amunition,
Look into general dynamics in Canada how Canada pays to have a us monopolist in charge of their own ammunition.
https://www.theglobeandmail.com/business/rob-magazine/article-ammonopoly-general-dynamics-sweet-deal-to-supply-our-ammunition/
Also the us ammunition manufacturers destroyed canadian ammo companies through dumping.
Matt, "ex-Marine" implies he was driven out of the marines for bad behavior.
As his service seems honorable, 'Former Marine."
One of my favorite substacks, really great reporting.
Thank you very much. A great "reset" is coming...
"The Great Reset" -- is about how US empire could survive without M4A, without $30/month min salary, without survival checks of $4K/month for duration of Covid, endless wars for oil control, against "godless" socialist countries, etc., etc. And -- endless distraction with "gay and abortion rights" wars will no longer be enough - oligarchs are united to preserve their DNC+GOP monopoly but see dangers coming.
And - the accounting is coming soon. By far the highest interest of Biden government and its oligarch cabal is that Russia-gate immense hoax – the scam of the century -- will NOT / will NEVER be exposed. There has been collusion between media, Democrat party, Hi-Tech companies and the deep state for now five years.
The entire anti-Russian fairytale is a deliberate fabrication -- the worst scam in US history is neoliberals’ Russia-gate hoax. They lost to a TV host. Instead of reflection, they latched onto a moronic conspiracy theory -- this includes the proven false accusations that Russia gave WikiLeaks Hillary's emails (hence total silence on Assange torture). Assange must be silenced -- all the plotters/players agree...
There has been collusion between media, Democrat party, Hi-Tech companies and the deep state for now five years. The Russia-gate hoax and Ukraine-impeachment “entertainment” was concocted by Obama/Hillary/Biden/Pelosi, Schumer, Schiff, etc. and their intelligence and DNC executives on behalf of their Wall Street and military industry donors. That lying team is now back in power -- Kamala Harris (and her sister) and Neera Tanden are Hillary's protégés; Pete Buttigieg was promptly rewarded for his role of election theft in Iowa.
Remember, Clapper, Brennan & Hayden trio were among former 50 intelligence officials stating that Hunter-laptop is classical “Russian disinformation”.
- They were also key promoters of the three-year Russia-gate hoax.
- They were also key intelligence executives in Obama/Biden/Hillary government – the government which hunted Snowden (forcing Bolivian plane with Bolivia’s president to land to search it) and armed Al Qaeda (including “white helmets” hoax) and staged all chemical attacks in Syria to remove its government.
When asked about Hunter's laptops Pelosi stated "All roads lead to Putin"; commenting on Capitol invasion Schumer said - "worse than Pearl Harbor and 9/11"... Lying team at work
Trump’s utter incompetence in handling Covid-19 created the human and economic catastrophe that will be called - Trump-virus. He brought into government religious extremism and racism.
Now we need a "great reset" to desperately try to postpone US economic and global influence decline... Censorship and more distraction a la "gay, abortion, and impeachment" wars are likely.
Thank you, once again.
Thank you for the wonderful article as always. I know these articles must take a huge amount of effort, but have you considered adding some level of sources to them? To me, what you write about is often so shocking and something I had never heard about or read about before. Your articles often shape my thinking on politics and policy quite deeply. I want to make sure I'm doing my due diligence and that I'm not just believing anything I read on the internet, which I often fault others for doing. Of course I can always find sources myself, but some basic ones would help!
A nice chart of the decrease in semiconductor manufacturers over the last two decades. Even recently Intel wasn't a monopoly, but the newer process nodes cost billions of dollars per fab, and billions more in R&D to make those fabs work. This is a prime reason AMD split off its fab business into Global Foundries, and a reason Global Foundries isn't manufacturing on the most recent nodes.
https://en.wikichip.org/wiki/technology_node#Leading_edge_trend
Something I've been trying to figure out, and I'd appreciate any input on this matter.
What's the difference between a government and a monopoly? The only thing I can imagine is scope, since everyone's got self-interest mixed in somewhere.
Here's a monopoly for you to check out: Quickbooks, the world's worst bookkeeping software. See https://www.consumeraffairs.com/computers/intuit_quickbooks.html
The death of Section 230 would benefit monopolists. User generated content is literally why I am reading this article and is at the heart of today's internet. Moderating such content is already a nightmare, one that only grows more complex as a site grows. Once a site hits a certain size, automated measures are the only solution. Furthermore, if a small site is inundated with problematic content, there is literally nothing they can do. Trolls call this raiding.
I entirely agree that large tech platforms are abusing Section 230. Its restructuring is guaranteed. Thus, the smart monopolist plans accordingly to rig the system in their favor.
Imagine one of Substack's competitors were to discover they are losing marketshare to Substack and that content creators are migrating to receive a larger percentage of the profits from their work. However, Substack's creator base is much smaller than the incumbent platform, as is their readership. The upper echelons of big tech are a pretty close knit circle. One day, you're getting a beer with your friend from Twitter. You start complaining about this newcomer nipping at your heels and they lament how hard it is to deal with the Far Right/QAnon types of communities on their platform. An idea is born.
https://www.newyorker.com/magazine/2021/01/04/is-substack-the-media-future-we-want
Selling the influencers in these spaces is very straightforward, and they bring their readership with them. Under Section 230, though Substack may be tarred and feathered by this new influx, they are still operating a perfectly legal venture. If sites are held responsible for the content that is on them, the incumbents and the obscure will be the only ones able to function, as anyone traversing the path will find their journey all the more difficult.
I'm already seeing comments on this blog, which I've followed for years, of a nature that were not there before. I highly recommend anyone who has not watched the Social Dilemma to do so and think about what monetary value their behavior may be worth in this new light.
I think the history of the United States is a long trail of the effects of unintended consequences.
Looks like authoritarian Russia is the leading country in the world in weapons development (for example, hypersonic missiles) Hicks looks to believe that competition is the key to developing weapon systems, etc. Good old American moxy capitalism. The same moxy capitalism that is saving the United States from the covid pandemic. The MIC remains in good hands.