Tuesday, March 11, 2014

Guns v. butter. No, make that shoes v. butter!

Remember this chart from a few days ago?


I am sure you forgot all about it and went your ways. Because you have way too many other things to worry about.  But, you--whether living in the US or in Chennai--cannot "afford" to forget it!

The Economist offers an interesting example for why the military budget is tough to tame.  Before getting into the example itself, these comments from the magazine newspaper:
[Harnessing] austerity to reform the defence budget will be dauntingly hard. Congress will have final say over Mr Hagel’s plans and something about camouflage gear has a strange effect on politicians. Even in this era of cuts, the Pentagon’s budget is vast: America accounts for about four of every ten dollars spent on defence worldwide. The temptation is always there to play at industrial policy or simple favouritism.
The scale and the complexity of Pentagon spending make it hard to assess the real prospects for reform.
You ready for the example?  Consider military boots:
 The plant in Big Rapids is still more unusual: every component used there is American, from leather (a Minnesota tannery provides most hides) to shoelaces, eyelets and the yarn used for linings.
 When we live in a world where the shoes we buy might have been manufactured in Cambodia, and shirts from Bangladesh, interesting to note that even the shoelaces for the military issued boots are red-blooded American. Why so?
 This patriotism is explained not by sentiment, but the law. Military footwear is governed by the Berry amendment, passed by Congress on the eve of war in 1941 to ensure that troops would be given home-grown wool and food. Today the amendment applies to most uniforms, tents, flags and processed food bought with Pentagon funds. These must be entirely American-made or -grown, unless domestic firms simply do not make the product.
Make up your mind: do you want to laugh or cry about that?

So, that was about those tough military footwear. If only the politics stopped with that!
 a bipartisan clutch of senators and members of Congress—notably from states with some domestic shoe production—has spent years prodding the Pentagon to start buying a product that does not exist: all-American military running shoes. Under orders from Congress, defence officials formally asked domestic shoemakers in January to report if they could make “Berry-compliant” athletic shoes. The inquiry was made through gritted teeth. Market forces do a fine job of supplying comfortable, cheap running shoes to recruits. Defence officials argue that costs may rise if trainer choices are limited, and that injuries may even follow. The signals are clear enough: the Pentagon has no desire to get into the sneaker-design business.
Yes, even the Pentagon is opposed to the very proposal from the lawmakers
Again, make up your mind: do you want to cry or laugh?

All that was over shoes. And then there are tanks. Aircraft carriers.  Submarines. Fighter planes. Bombs. Missles. ...

Meanwhile, we fight over scraps to maintain soup kitchens.  USA, USA, USA!!!  As Paul Krugman recently put it:
The total failure to accept that the poor face real physical hardship, that affluent politicians have no business lecturing people having trouble buying food or having trouble paying for health care about dignity, is just stunning.
Awful!

For the final time: do you want to cry or laugh?

2 comments:

Ramesh said...

Yeah - this whole stupid "Buy American" clause came from the US Military.

A side issue. If you drew that chart of yours again and do it in absolute terms, the US bar is growing very slowly and even sometimes shrinking. So are the other countries. The red colour is however increasing rapidly. In the not too distant future, the red will overtake the blue.

Serious warning - If you quote Krugman again, I'll stop commenting :)

Sriram Khé said...

Oh, it will be a LONG time before the red can even begin to approach the blue ...
but, yes, as a percentage of the GDP, the US military budget is slightly trending down ...