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InvisibleDexter_Morgan
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Re: dems introduce war profiteering bill [Re: Redstorm]
    #6437174 - 01/08/07 01:55 AM (17 years, 2 months ago)

Nobody, because they have the reputation of bloodsucking vermim.


Im saying more along the lines of if kraft and coca cola sold there products to our armed forces, at cost, instead of haliburton selling them for 20x more, maybe people would proudly buy coca and kraft products stateside.

Whatever, this was only ment to be a side note, The real problem is the lack of incentive for defense contractors to end a war.

More Blood = More Money. Less fighting = Less Money.


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OfflineEconomist
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Re: dems introduce war profiteering bill [Re: Dexter_Morgan]
    #6437426 - 01/08/07 07:05 AM (17 years, 2 months ago)

Quote:

ShroomDr said:
The real problem is the lack of incentive for defense contractors to end a war.

More Blood = More Money. Less fighting = Less Money.



Defense contractors should NEVER have an incentive to end a war.

The ONLY incentive that a defense contractor should have is to deliver to the military whatever it is the military contracted out to them in the first place.

Consider what would happen if Halliburton actually had an incentive to end the war in Iraq. The quickest way Halliburton could win the war would be to simply over-charge for food and then fail to deliver it to all of the troops, resulting in starvation and combat-ineffectiveness, but quickly ending the war in a US pull-out. Do we really want this sort of thing to happen?

The trouble with KBR and Halliburton simply results from the process of "No-Bid" contracting. If Halliburton had to compete with other firms, they would most likely lose at this point (or they should have racked up so many "demerits" in an accountability mechanism that they would be procluded from bidding, but we don't have one of those either).

In previous conflicts the US didn't turn to firms like Halliburton because open-bidding allowed civilian firms to fill the need. Everyone has heard about Ford converting factories to build bombers during WWII. Similarly, for all the controversy it created, the government turned to Dow Chemical for its needs during Vietnam. Even during the invasions of Grenada and Panama, private contractors were used but they usually had names we know from civilian life, names like Kraft Foods or General Motors.

Unfortunately, the whole no-bid contract is nothing new, the conflict in Iraq has simply allowed it to take on a new form. Ever since the end of the Cold War, the US has been giving out no-bid contracts in one form or another. Usually the form is something like this:

1) Pentagon employee quits Pentagon and founds corporation
2) Former-Pentagon employee uses knowledge from time at Pentagon to offer services to active-Pentagon employees that the Pentagon hasn't advertised as "looking for"
3) Active-Pentagon employees offer a contract to company run by former Pentagon employee

Instead, the process should look like this:

1) Pentagon employee quits Pentagon and founds corporation
2) Former-Pentagon employee uses knowledge from time at Pentagon to offer services not-advertised
3) Pentagon publicly announces its consideration of bids for these services
4) Competing bids taken from civilian firms
5) Pentagon signs contract

This is a HUGE problem for the US in terms of efficiency. The whole point of private contracting is an effort to increase efficiency, but efficiency in the market place only comes about as a result of competition. Any time you close a market to competition you lose this advantage.

Also, in case anyone's curious, Corporate Warriors by Singer is a great book to read about this topic. While I think some of his conclusions are sketchy, he definitely has the background information down.

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