Daddy's Missile: Shaping the South's Pre-war Economy

By Tom Schlesinger

Vol. 4, No. 4, 1982, pp. 1-2, 23-30

In mid-May 1982, the American Academy of Arts and Sciences and Harvard's Center for Science and International Affairs co-sponsored a meeting about the dangers of prospective budget cuts. "As other, non-military, government spending is reduced," wrote the conference organizers, "and deficits run high, the proposed increases in military spending are beginning to face resistance. The cuts that may result may be of the sort that hamper long-term political policies designed to strengthen the defense industrial base." Convened by Cambridge lawyer Antonia Chayes, Undersecretary of the Air Force during the Carter Administration, and featuring representatives from the Pentagon, academic, corporate and political communities, the Harvard conference tried to outmaneuver the resistance by breathing life into a lie.

Already, that lie--the assertion that America's defense industrial base is "eroding" and in desperate need of money, deregulation and other forms of resuscitation in order to be war-ready--had been promoted relentlessly for the last two years by a bloc of military-industrial partners. Appreciating Harvard's justly famous capacity for organizing consensus among elites, the industrial mobilization lobby humbly described its gathering as an attempt to "arrive at the boundaries within which reasonable people can be expected to disagree." 1

While the American Academy's declaration of war concluded with a scheduled "sherry and sandwich on the run," the state of North Carolina was serving barbecue at a related military-industrial get-together on the campus of North Carolina State University. The Raleigh conference highlighted Governor Jim Hunt's celebration of Small Business Week by bringing together contract office-


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ers from the Defense Department and state military installations, buyers from major defense contractors and a raft of small business owners eager to learn more about--if not jump into--the only part of the economy that's expanding. The Raleigh conference also disproved the lie being fashioned at Harvard that day. Not that the conference's agenda included truth-telling, it just provided a backdrop for some truth to out. But first we need to fathom the depth and origins of the lie.

Since 1979, elements of the Department of Defense and Congress have portrayed America's defense industries as abandoned by small business suppliers, desperately short of machine shops and titanium forges, critically lacking a future supply of engineering talent and skilled labor, over-reliant on "unpredictable" foreign sources for hard goods and strategic minerals and generally unable to mobilize. "Industrial preparedness" issues have been magnified by the Defense Science Board (a Pentagon-directed team of executives from major war contractors), the House Armed Services Committee, the Senate Small Business Committee and mounting publicity from such beacons of corporate liberalism as Business Week, whose shrill and misleading "Why We Can't Rearm Fast," published in early 1980, remains a movement landmark.

Like all good, heavily invested lies, this one contains some half-truths. America's military does rely on U.S. transnationals like Texas Instruments which have exported their military production facilities at a dizzying pace. Hence the Pentagon does have a "foreign" producer problem--at least eighty-five percent of all military semiconductors, for example, are made in Southeast Asia by the rabidly anti-union Texas Instruments and other U.S. firms which steadfastly refuse to repatriate their manufacturing facilities. 2

The half-truths and genuine whoppers animating the industrial preparedness movement rest upon the pursuit of more fundamental questions: prepare for what? mobilize for what? The answer reveals a shift in American strategic thinking. Throughout most of the 1970's, military spending was guided by the Arab-Israeli Six-Day War and lessons gleaned from other recent conflicts. Military scenarists assumed that the next war would be a short one, with the antagonists quickly spending their war resources and just as quickly devastating the other side's In the late 1970's, however, segments of the defense establishment began to question the "short war" assumption.

On the day after Christmas in 1979, a Wall Street Journal essay elaborated: "Because of budget stringencies over many years, our military stockpiles today could support a major conventional war for only a couple of months or so. This puts our planners in a quandary: either they have to assume a short war or envisage fighting a war without supplies. Understandably they choose to 'plan a short war.'"

The writer of that essay was Fred C. Ikle, head of the Arms Control and Disarmament Agency during the Ford administration and a prominent member of the Committee for the Present Danger. Today, the Swiss-born Ikle is Caspar Weinberger's Undersecretary for Policy, one of the half-dozen most senior positions at the Pentagon. Once in power, Ikle, Weinberger and company extended their supposition about the industrial base's inability to refight World War II. They tethered U.S. military policy to the expectation of protracted conventional war. The Pentagon's 1970's preparations to fight one-and-a-half wars turned to a 1980's vision of unparalleled destruction in any number of theaters. One of the vision's chief effects is making almost any defense industrial base look indequate.

Some members of the industrial preparedness movement, like Georgia Representative Newt Gingrich, candidly explained its centrality to shifting from a "war-deterrence to a war-winning philosophy." But the Pentagon contends that long-war reindustrialization will actually deter that war by sending adversaries signals that we have every contingency covered, including a replay of World War II. DOD's long-war logic implies a deeper sort of wishful thinking as well. If superpowers continue committing ever greater portions of their productive capacity to conventional warfare (where ninety percent of U.S. military spending currently goes) those powers will feel obliged to use up that capacity before resorting to nuclear holocaust. In essence, the long-war hypothesis assumes that each human actor and technical element in the world's arsenal of fifty thousand nuclear warheads can be held in "non-escalatory restraint"; that warring nations will not even turn to nuclear weapons when one side is clearly winning and the other losing. If money weren't a consideration, one might lay the motivation of Ikle and his team to simple nostalgia for U.S. industrialism's "Audie Murphy" phase. "Looking back at those years," Ikle rhapsodized in the Wall Street Journal, "it seems we were almost ten feet tall." 3

With the mutually supporting rationalizations of long war and industrial "erosion" incorporated into policy and


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public consciousness, the lobbyists moved to secure goldmine incentives for DOD's supply-side. Marked by signals like a thirty-one point memo from Deputy Secretary of Defense Frank Carlucci in April 1981, they pushed such contracting nuggets as multi-year acquisitions, guaranteed return on investments (twenty percent is a figure bandied about) and training and automation subsidies.

All this activity, proceeding though it does from deranged assumptions, contrasts with the lack of activity on most civilian economic fronts. That contrast has energized the states to effectively reinforce DOD's attempts to broaden its constituency and find new places to spend its bottomless budget. Instead of battling over federal taxes, General Accounting Office procurement policies or the arcane of grant formulas, state governments have increasingly shifted their attention to the only area of federal spending which will grow in the foreseeable future--military construction, military payroll and associated funding transfers. Moreover, defense industries have become the coin of the economic development realm. Events like North Carolina's procurement conference are set up, said organizer Al Calloway, the state's assistant director for Business Assistance, because "last year we knew that by the first quarter of 1982 we'd actually see trickling down to smaller businesses . . . [here Calloway paused to reassess his choice of verb] . . . we'd see hard money coming in from DOD."

Hard money also brought in three hundred or so curious business owners to North Carolina State's McKimmon Center to buttonhole defense prime contractors like Western Electric (which takes in a quarter of all North Carolina's military contracting dollars) and Teledyne (which operates the South's biggest titanium forge--in Jesse Helms's hometown of Monroe). "We've seen machine


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shops come out of the woodwork like I've never seen before," said Allen Trippeer of the Defense Contract Administration Services Atlanta office. "They've read in the paper about DOD getting all this money. There's definitely an increase in interested contractors."

If the North Carolina conference is any guide, DOD is busily compiling waiting lists of suppliers. With economists, nutritionists, custom glassblowers. flagpole repairmen--and one soul trying to merchandise a "space device" which detonates land mines from orbit--prowling contractors' and supply directorates' booths, DOD also has a willing reserve to meet its most esoteric needs. As Bill Page, one of Seymour Johnson Air Force Base's contract officers said, "As far as competition and availability go. for what we need at Seymour Johnson we don't have any problems. I think there's a good base out there to supply DOD. Just about every time a small business fails a new one takes its place."

Members of Congress and military installation chiefs have all been throwing procurement conferences for decades. Nor is North Carolina now alone in the South in intensifying its pressure on businesses and communities to buy into DOD's brand of support and obligation. Georgia has made major additions in the past three years to its aerospace economy, including a Boeing plant in Macon. a United Technologies facility in Columbus, and Atlanta's Rockwell International plant which makes the GBU-15 winged bomb. But in 1981, the state joined forces with the city of Warner Robins and Robins AFB for an industrial development campaign the intensity of which eclipsed those earlier efforts.

The campaign began when Maj. Gen. John Paulk took command of Robins AFB in 1980. A native of Willacoochee. Ga., Paulk hit the ceiling upon learning of the relatively small portion of Robins' two billion dollar boodle which went to in-state contractors. According to Robins contract officer Bob Beckmann. Paulk relayed his dissatisfaction to Governor George Busbee and other industrial development figures. Within months. Beckmann. Georgia Industry and Trade Department official Emmett Mann, and a leader of (Georgia's state Chamber of Commerce. Penn Worden, had concocted a statewide series of meetings on the glories of sub-contracting for Robins. "We kind of brought the mountain to Mohammed." says Beckmann. Officials of the Small Business Administration and C&S Bank, Georgia's largest, pitched in with financing and administrative help. In the space of twelve months, 1,229 firms signed up to do business with Robins AFB. In-state procurement for the base rose from thirty-nine million dollars in fiscal 1980 to seventy-nine million dollars in fiscal 1981.

Tennessee's Economic and Community Development (E&CD) Office explicitly targets military contracting at the head of its recruiting priority list. "Right now I'm on


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top of every defense contract that's let," says the state's top industrial recruiter, Assistant E&CD Commissioner Bill Long. Long's research staff combs Commerce Business Daily and the Pentagon's Defense Marketing Service listings for recruiting or expansion opportunities. But, due to their boss's background, they also go an extra mile.

Although Long rents out a farm and co-owns a couple of east Kentucky strip mines, he acquired most of his business experience during a twenty-eight year stretch in the Marines.

Long's assignments included three years in the White House honor guard and duty as the first Marine liaison officer to Congress before mustering out in the mid-seventies. "I've got contacts," Long volunteers, "and I'm trying to renew contacts. But it's all above board. They wouldn't even talk to me if it wasn't. I get the same information as everyone else. But I might get it a little bit earlier."

With his informational edge, Lang says, "we feel we have a good shot at getting a lot of component parts to weapons systems, so that's what we're going after. We've gotten into everything from consoles [for tracking systems--a potential $25 million investment] to radar systems. I was in Washington last week and met with six contractors. We have a shot at getting them. We got a letter last week, 155mm launching tubes for guns. Laser homing devices, air-delivered clusters of mines, visual tracking systems. We haven't culled anything out."

II

"Erosion" alarms may not serve the truth but they do serve to conceal the defense reindustrialization campaign's political content. Military industries remain alive and well but they sometimes don't happen to be what or where interested parties want them to be.

Jacqueline Mazza's office in the U.S. House of Representatives Annex Building in Washington is festooned with collaged advertisements from New York magazine. The wail resembles a graduate student's efforts to hang on to some sense of humor during the degree grind. Ray Gillen's cubbyhole, just around the corner, is decorated by a single photograph of a long-dead South Carolina senator named Burnet Rhett Maybank. Graduate student analogies come easy because Mazza and Gillen are as young, friendly and manifestly privileged as the dozens of other people who work with them at the NortheastMidwest Institute, an organization which supplies sectional lobbying ammunition to more than two hundred members of Congress.

Jackie Mazza spends her time pasting together the "Frostbelt" lobby's plea for more military bucks. In 1980 she authored The Unprotected Flank, an Institute book which details how few defense dollars flow into Northern states relative to their share of the country's population and tax burden. It also argues, among other notions, that more American troops should be training in climates that approximate those of Western Europe--like upper New York State. "A lot of Congressmen from the North have been anti-defense," she says. "They wouldn't go near those committees. But they woke up all of a sudden when their economies were doing poorly."

Mazza and company have certainly rung the alarms for an awakening which has made Northern Congressmen with liberal and moderate credentials a decisive force behind the further militarization of the U.S. economy. In 1981 she arranged a meeting between Defense Secretary Weinberger and a Northeast-Midwest delegation that her co-workers label "historic." "Weinberger as much as said he had to establish a better regional balance if he wants to keep a defense consensus in this country,"


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Mazza says. The Unprotected Flank joins the industrial base debate by alleging that defense production has migrated South to the point of "giving an opponent an 'easy target' end rendering the U.S. more vulnerable to attack." The Frostbelt lobby's problem is not just that the defense industrial base is eroding, but that it is allegedly no longer in the Frostbelt. That's where Ray Gillen and H.R. 5540 come in.

Gillen has labored to undo the handiwork of Burnett Rhett Maybank, a Charleston aristocrat who amended the 1953 Defense Appropriations Bill to prevent military monies from being targeted for depressed areas. Routinely protected by Southern seniority, the Maybank Amendment was added to Defense appropriations bills thereafter. In the late 1970's it became a focus for the Northeast-Midwest attempts to load funding formulas in their favor. The "Sunbelt" lobby, including the Southern Growth Policies Board and the Southern Governors Association, used armed services committee clout to preserve the status quo. (A regionalism as equally spurious as that of the "Frostbelt," Sunbeltology is the self-interested science of connecting Tuscon's suburbs to Letcher County, Kentucky.)

The Sunbelters argued that using defense procurements as an "urban policy tool" would court inflation. Procurement spending annually amounts to thirty to forty percent of DOD's budget. Jackie Mazza and the Northeast-Midwest strategists see procurements--as opposed to military payroll or construction--as the most pragmatic route to increasing the North's share of the Pentagon's pie. In 1981, after a four-year battle, the Frostbelt forces finally rounded up enough non-Frostbelters whose districts included "labor surplus areas," the current euphemism for areas of high unemployent, and repealed the Maybank Amendment. The winning coalition enacted a substitute which allowed the Defense Logistics Agency to make preferential awards to non-weapons contractors in distressed areas.

Hard on the heels of this win, Northeast-Midwest partisans began pushing a vastly more open-ended effort to raise their regions' defense manufacturing stakes--this year's H.R. 5540. Sixty-one representatives, nearly all from the North, co-sponsored the bill as a series of amendments to the Defense Production Act. That Act contains thirty year's worth of ground rules for America's military manufacture and serves as a catch-all for other boondoggles enacted in the name of security, like the Synfuels Corporation.

H.R. 5540 would dole out fifty billion dollars (fifty billion by some estimates) in outright loans, loan guarantees and purchase agreements to the "small and medium-sized" contractors that the defense establishment has designated at the really "deteriorating" tier of its supplier base. Fifty billion dollars represents two hundred Lockheed loans or several dozen Chrysler bailouts. But that's not all 5540 offers. This is the bill that also defines "colleges, universities and other institutions of higher education" as "industrial facilities" in dire need of "updating equipment." The Frostbelters have designed 5540 to close the American academy's lab equipment window-of-vulnerability and to "provide incentive for faculty to remain in academia and encourage students to pursue higher degrees in a quality environment." Finally, in pursuit of strategic minerals, 5540 proposes to further militarize America's policies regarding the natural belt growth coalition than any Twentieth Century predecessor, ostensibly opposes 5540 as inferior to its brand of recovery-oriented "free market" military spending. Budget director David Stockman delivered an official statement of opposition by defending "the Defense buildup, tax reductions, improved depreciation schedules. . . and reduction of regulatory burdens" as "broad measures to strengthen the economy."6 Within a few days 5540 is scheduled to go to the House floor for a vote. Despite the Administration's public posture. Staffers from the bill's parent Economic Stabilization Subcommittee say that its chances "look very good."

By itself, the distribution of military production dollars can be a misleading issue--in fact, when pressed, regional lobbyists agree that procurement is spread pretty evenly. The important question is what do all these dollars buy? The answer reflects the South's particular position within the defense industrial base. Again the trouble is hardly one of "erosion," it's one of too many socks.

Traditionally, the South has supplied DOD its textiles, tobacco, coal and food. The South has also supplied ships, C-130 airplanes and the fruits of the Army Missile Command. But even today Newport News, Marietta, Pascagoula, and Huntsville remain anomalies on the defense contracting landscape. Even when subcontracting is counted, most Southern states sell DOD comparatively little weaponry.

The Department of Defense estimates procurement spending to be its fastest fattening budget line.

Between fiscal 1981 and 1985, procurements are destined to expand sixteen percent a year in real terms while other military outlays will increase only five percent per year. From fiscal 1979 through fiscal 1981, the growth in procurement spending was concentrated on non-weapons purchases. Non-weapons contracts increased eighty-six percent during that period, twice as much as weapons contracts (unadjusted dollars). Non-weapons items grew from a quarter to a third of total procurements during the same years. But as the Reagan-Weinberger team reinforces choices made by Jimmy Carter and commences its weapons-buying binge, those procurement ratios will be reversed. Thus, the Northeast-Midwest Institute's strategy of going after more Maybank-related spending in the short term and "geographically-distributed," HR 5540-subsidized weapons spending in the long term. 7

As the Southern lobby defended its disproportionate share of Pentagon outlays, it unwillingly protected its lead in the types of spending (i.e., non-weapons) which have been more predictable and stable (both locally and regionally) than the weapons program roller-coaster. But the fact that traditional Southern defense industries have been a sub-set of traditional Southern industries has remained a largely uncounted--or unanalyzed--advantage. Now, it's being counted less all the time because Southern development partisans increasingly believe that while their states can't live without their traditional industries, they can't live by them alone. Just like their Northern counterparts, these boosters see defense procurement as a vehicle for nourishing science-and technology-based industrial growth, hence an economic fix. But clearly, the Yankees got there first.


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"They're calling it 'The Route 128 Boom'," says Sandra Kramer of the Sunbelt Council, combatively, referring to the electronics companies circling the Boston area. In 1981, Kramer, formerly the Southern Growth Policy Board and Southern Governors Association's chief Washington lobbyist, helped former Alabama Congressman John Buchanan pull together the Sunbelt Council's 119 congresspeople. In early 1982, Kramer reflected on the military budget and regional development. "We were just up in Maine for the holidays," she said. "The Boston Globe ran a series on how this defense spending is going to hit them up there. You know they're strong on high tech. And the South just doesn't have high tech. That's our problem . . . to get some mental expansion . . . not be the ones always supplying the foot soldiers but the brains, too."

What the South does have is Tennessee's Bill Long and a flock of other state development officials all desperate for jobs, tax base and quick fixes. Jim Cotham, Long's former boss at Tennessee's Economic and Community Development Department, says that defense "is a very large part" of the high tech recruiting campaign he and Governor Lamar Alexander committed the state to in 1981. The Tennessee efforts led to plans for a "technology corridor" modeled on North Carolina's Research Triangle Park and based in Oak Ridge--the granddaddy of nuclear-type economic development. Florida, which already had the foundation for high-tech growth that Tennessee lacks, recently granted industrial development funds to woo the New York-based Moog, Incorporated, to the St. Petersburg-Clearwater area. There Moog intends to build a performance control equipment plant to supply the F-15, Trident and M-60 tank programs.

III

Desperation characterizes the states' and regions' raids on and imitations of one another and their scramble to hop aboard the next development train--regardless of destination. And the Reaganites' apparent belief that pure desperation mobilizes consent better than 5540's blandishments finds its surest measure in people like David Patterson, who don't think of themselves as consenting at all.

Patterson, a TVA economist, was one of the Tennessee technology corridor's earliest proponents and has, with the help of state Economic and Community Development officials, helped nurse it to its present stage. Patterson got into the development business from a background in civil defense. He wrote his dissertation for the Arms Control and Disarmament Agency, worked for the Institute for Defense Analysis, and upon arrival in Tennessee, consulted at Oak Ridge on civil defense "from an economic standpoint."

"I remember when I was at Indiana when the movie Dr. Strangelove came out," Patterson says. "I really went to pieces in that movie. I had just spent a year reading everything that had been written about the impact of that sort of thing in preparation for writing a dissertation proposal. Everybody else in the moviehouse was laughing. I was sitting there shaking."

"I spent too much time in my life studying the so-called possibilities of recovery after a nuclear war. I got sort of burnt out on the area I guess. I learned too much about what it can do--nuclear war. And you sort of come to a point in your life whenever you get involved with something like that when you have to decide, ok--I give up. Or, I've really got to do something. And I couldn't see where there was anything I could do."

Being an economist as well as a refugee from the Armageddon wing of his profession, Patterson has some problems with military spending increases. "Justifying defense spending on the grounds of its potential spinoffs is like justifying death because it returns phosphorus and other needed chemicals to the soil," he says. "Saying you're going to put money into defense because it'll stimulate the economy . . . you can do exactly the same thing, much more effectively by paying half the unemployed to dig holes and the other half to fill them up. It's exactly the same thing. Because you're buying nothing."

If Patterson had his druthers, Tennessee's technology corridor "would be looking for industries that had potential beyond defense or in addition to defense because military defense budgets come and go. In fact, I would be looking to industries that had primarily civilian-oriented market potential. " At the same time, Patterson is trapped by the military mobilization imperatives that all South-


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environment and international trade. 4

HR 5540 takes its stand on regional development by amending the Defense Production Act's "Declaration of Policy" to read, "It is the policy of the Congress to encourage the geographical dispersal of the industrial facilities of the U.S. in the interest of the national defense and to discourage the concentration of such productive facilities within limited geographical areas which are vulnerable to attack by an enemy of the United States."

Thus 5540 seeks to trap the Pentagon. The bill offers valuable instruments for industrial constituency building and for reconciling differences between some national industries, union leaders and balky members of the financial community. At the same time it confronts the traditional power of Southern armed services committee chairmen with its statement of redistribution. Historically, DOD has been loathe to bite Southern hands that feed it. Richard DeLauer, a TRW executive now vacationing as Assistant Secretary of Defense for Research and Engineering (he was also a member of the Defense Science Board's "erosion" panel and a featured speaker at the May Harvard gathering), told Congress in 1981: "National defense is not and never has been intended as an income distribution mechanism or system providing equal allocation of funds to states, cities or countries . . . The purpose and goal of defense spending is to keep the American people alive and free--and in the process it is possible that defense spending will necessarily be unevenly distributed geographically." 5

Moreover, this Administration, less tied to the Frostern development officials now labor under.

"You know if we got an opportunity to get a Lockheed plant located here, we'd probably bust our balls to get it," he acknowledges. "I don't think we'd do it because it was a defense industry per se. In fact there'd probably be some people saying, 'Wait a minute, that's a bummer. Let's spend our efforts on something else.' But others would say, 'Look, it's a bird in the hand. Get what you can.' And I guess I'd be in that latter group."

IV

For sheer numbers of questing small business owners, phalanxes of corporate executives who run 95-507 Programs (federally mandating that all prime contractors prepare "small business plans"), and for overall spit, polish and hardware, nobody throws a procurement conference like the Army Missile Command (MICOM) at Huntsville's Redstone Arsenal. But then no place is quite like Huntsville, the Southeast's longest-standing monument to aerospace high-tech and, in fiscal year 1981, the recipient of twenty-seven percent of Alabama's total defense contracts.

At the outset of Huntsville's most recent Small Business Opportunities Day, MICOM's current commander, Major General Robert L. Moore, upheld the local corporatist-in-uniform tradition by welcoming his guests as "ladies, gentlemen and fellow businesspeople." One week after the Harvard and North Carolina conferences, Huntsville's modernistic Von Braun Civic Center had been transformed into a Casbah of hardware and hardsell by the six dozen military supply directorates and prime contractors invited to peddle to prospective small business partners. Raytheon buyers dispensed bright red, missile-decorated tote bags. Hughes representatives earnestly explained cutaways of their aircraft. Nearly every other prominent name in America's military-industrial supply-side--Lockheed, Martin Marietta, General Dynamics--hawked away. The conference drew twelve hundred participants from thirty-six states, lured by fifteen thousand invitations.

In the midst of all this anxiety--the small business equivalent of five thousand unemployed people standing in line for one hundred jobs--Huntsville's conference also offered glimpses of an eerie intimacy. Chatting with an equally young bank officer at the local Chamber of Commerce booth, Tom Stramiello, a Chamber researcher craned his neck and smiled at the sound of a Hawk missile" firing in the Raytheon promotional film across the aisle. "That's my daddy's missile!" Stramiello crowed. The man from People's Bank nodded. The engineering generation of Stramiello the elder created the entrepreneural atmosphere in which its sons and daughters now orbit.

"It fluctuates," said the banker in response to a question about Huntsville's contracting cycles, "but overall it's pretty steady. You'll have a bad month and a good month but it's not like a bad year and a good year. Bad times aren't long enough to really damage somebody unless they're kind of fragile to begin with."

On the other side of the room, Fred Flores, a General Dyanmics buyer from the West Coast explained that his company had "ample" machine shop subcontractors. Nor did the assembled small businesses" lack of diversity trou-


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ble General Dynamics: "If they're too unique you can't use them," Flores said. What about "erosion?" Flores waved his arm at the Von Braun Center crowd, "If you ask most people in these booths they'll tell you they've been approached by numerous shops in desperate need of business."

Ralph Autery, lead engineer for the new FOG-M (fiber optic guided) missile, held down one of MICOM's numerous booths across from Flores. "They wanted to show that we still had the inhouse capability to do the FOG-M," Autery said of MICOM's command. "We've had other programs where you buy everything and do all the engineer-assembly and integration testing and you go out and fire one and it flies good and some company down the pike that you bought just the airframe from takes credit for it." MICOM's in-house capacity may also show that America's missile complex has engineers to spare, not the impending shortage advertised by the erosion lobby. Does Autery think all this "deterioration" talk is a little overblown? Autery smiles, "Yeah, we have a lot of people that're willing to work. Scheduling may be the problem more than being able to get something."

Even if the "erosion" hysteria is a bit on the mendacious side, it ought to create jobs since small businesses will gain and everyone knows that small business generates most jobs--right? Well, maybe not. Listen to Bob Ingram, director of MICOM's small business programs talk about "productivity" and mobilization. "You can ride up and down the highway and find small businesses that might be doing business with the government and you say, 'Hey, can you handle any more?' 'Why absolutely we can handle more. We can have output three hundred percent of what we're doing right now and wouldn't have to hire another men.' You'll find that in many instances."

Does this mean that building up the defense industry's small business tiers may not boost employment at all? "Very definitely," Ingram answers, "Let's take an isolated situation. You got a little plant here, a man and his wife and three sons are running it. And they manage to pick up two or three contracts with DOD each year. Total work is, say, fifty thousand dollars. They have a lathe, they've got several drills, they've got grinders, welding capacity, this type of thing. I'm saying that in a lot of these kinds of cases you could pump $300,000 worth of work in there and they could handle that and never hire another man."

Some economic development specialists see an important corollary to this--one the "erosion" lobby has ignored or downplayed. Military contracting's ups and downs have left the industry drenched in excess capacity. Unlike gung-ho gyrene Bill Long of Tennessee's Economic and Community Development office, Sandy Jordan, Assistant Commissioner of Georgia's rival Industry and Trade Department, sees military producers expanding only moderately--despite Georgia's success in luring aerospace companies. "Most of the companies that are looking for defense contracts," says Jordan, "have a great deal of plant space, infrastructure and machinery in place. They're not doing a great deal of site-searching because of contracts that have been awarded or anticipated. Because of cutbacks in previous years, they've got the facilities they need."

MICOM's Bob Ingram has a very military solution to the issue: redefine "excess." "We're not saying the (industrial) base has deteriorated," Ingram claims, "we're saying it should be a broader base, there should be more redundancy there. Rather than one shop that manufactures printed circuit boards, there are literally thousands of them around the country. And we should have them ready, willing and available to call on in the event we need them."

But call on for what? The long war? Another scenario? And what about our nuclear arsenals, poised and aching to be used? "I wouldn't get into that debate," Ingram laughs. "If it's a total nuclear war, mox nix on the industrial base. You're not going to have time to do anything anyway. But if the powers can agree to say, 'Well, let's shoot at each other with conventional weapons,' then yeah, you could have a need for it. So that's a matter of philosophy. And philosophy means discussing something you don't know anything about, so I steer away from it."

V

Making the defense industrial debate less philosophical requires that "reasonable people" expand, not narrow, the boundaries of disagreement. We could start by disagreeing with the belief that a global war of annihilation will be good for jobs in the region, state or district. We could move on to scrutinize the extent to which development decisions drive or simply substitute for military policy. Or we could examine more useful brands of public works programs and industrial initiatives than those of


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the military-industrial community. The harder state governments try to square the Iron Triangle of Congress, Industry and Pentagon, then the more accessible the issues become in Raleigh, Nashville and Atlanta and all the communities affected by our public, but undemocratic, development bureaucracies.

A reasonable debate would also encompass the costs--human, environmental and financial--that military production exacts from workers and communities who supposedly benefit from Pentagon spending. A disproportionate share of those costs have been borne by have-not Southerners such as asbestosis victims in Tidewater shipyards or uranium-bullet factory workers and their neighbors exposed to radiation hazards in Appalachian Tennessee. The seemingly benign notion of "targeting contracts to distressed areas" in practice frequently means lending DOD's authority to minimum wages, lethal workplace hazards, union busting and job insecurity.

The preponderance of non-weapons contracts in the South only hints at the Pentagon's real domestic power--its unrivalled reach into every corner of our economic life. The Department of Defense provides eighteen thousand dollars for a rural sheriff's department to drive past a Corps of Engineers Dam several times a week in Southwest Virginia. It furnishes $150,000 to prop up a marginal strip miner in East Kentucky. It sends along $200,000 to rent recruiter's space in a failing hotel in a Tennessee town. The military reindustrialization campaign promises to extend DOD's grass roots power. Unless we understand the web of Pentagon dependencies, we shouldn't expect to change the shape of the South's pre-war economy.

Tom Schlesinger is a carpenter and freelance writer living in Tennessee. He currently works with the Highlander Center's Strategic Minerals and Defense Industry Project.

Notes

1. "Conference Outline: Improving National Security by Strengthening the Defense Industrial Base," Harvard University Center for Science and International Affairs, May 10-12, 1982.

2. "Semiconductor Support of Military Programs," presented to the Defense Science Board Task Force on Industrial Preparedness by Jerry Junkins, vice-president of Texas Instruments, Dec. 19, 1980, Appendix B, page 8. "The cost to subsidize mandated U.S. production," Junkins claimed, "might be considerable and more than the military can afford."

3. "Could We Mobilize Industry?" Fred C. Ikle', Wall Street Journal, Dee. 26, 1979.

4. Congressional Budget Office Cost Estimate and Dissenting Views of Representatives Ed Bethune and Ed Weber on HR 5540 from House Report 97-530, May 17, 1982, pages 26-29, 61-62.

5. Richard DeLauer to the House Banking Committee's Subcommittee on Economic Stabilization. Hearings on "Revitalization and the U.S. Economy," July 15, 1981, Part 11, page 332.

6. Stockman letter to Representative J. William Stanton, May 5,1982, in House Report 97530, page 63

7. Procurement spending estimates in "Annual Report to Congress, FY 1983," Caspar W. Weinberger, Secretary of Defense. page B-2.,

. Weapons vs. Non-weapons spending comparisons from "DOD Prime Conract Awards by Region and State, FY 1979,1980,1981," Department of Defense, Directorate for Information, Operations and Reports (DIOR), pages 15-17.