U.S. Fascism – Chapter Three
Pandemic Care for Big Business
COVID-19 reach pandemic status on 11 March 2020. The poor and working class were terrified. People were dying and hospitals were overwhelmed, and the fascist state’s top priority was caring for its industry component.
Small Business
The Paycheck Protection Program shows how the working class is not cared for, even in times of crisis.
U.S. Congress presented the Small Business Paycheck Protection Program (PPP), which was passed in 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act during the Trump administration and then expanded during the Biden administration, as a multi-billion-dollar loan program to help small businesses cover rent, payroll, and utilities. The banks in charge of distributing the loans quickly “gave much of the money to publicly traded chains that were allowed to claim small business status under a loophole written into the bill by their lobbyists,” law professor Leonard C. Goodman explained two months into the pandemic. The banks that handled and processed the program’s loan applications charged—and got away with!—$10 billion in fees.
Though PPP was funded with tax dollars, the taxpayer was not prioritized. The banks acting as intermediaries gave VIP service to their richest clients. Perks for the wealthy included step-by-step help filling out the requisite paperwork, priority access foregoing the buggy online portal, and expedited processing. Genuine small business borrowers were often confused about the fine print, Reuters reported. Instead of tackling the daunting PPP and keeping employees on staff, many small business owners laid off workers and avoided the federal aid altogether. Most PPP money went to the capitalist ruling class and very rich households.
Small business trickery is par for the course in military contracting.
The Pentagon sets aside billions of dollars each year just for small business contracting. Dedicated military offices throughout the country help small businesses contract with the military, further steering the U.S. economy toward war. Some sizeable corporations, such as Atlantic Diving Supply (ADS), have been accused of classifying themselves as small businesses in order to access the reduced competition inherent to small business contracting. As the pandemic progressed, top war corporations gobbled up at least $339 million that had been set aside for small businesses in a military program unrelated to the pandemic, the Project on Government Oversight reported in 2022.1
View from Wall Street
Low interest rates, cheap money, and unregulated, risky business practices caused the 2007-2008 financial crisis. To save the capitalist financial markets, the Federal Reserve (“the Fed”), which creates and manages U.S. currency, pumped trillions of new dollars into U.S. financial institutions and large corporations.2 These policies ballooned financial markets and, in turn, the wealth of the one percent of society that owned most stock and property.3
When the U.S. stock market took a nosedive very early in the COVID-19 pandemic, the Fed again injected trillions of new dollars into the market. Treasury Secretary Steven Mnuchin, a hedge-fund tycoon, spoke to CNBC: “I look back at people who bought stocks after the crash in 1987, people who bought stocks after the financial crisis… For long-term investors, this will be a great investment opportunity.” (Mnuchin’s sentiments were similar to what Jamie Dimon, chief executive of JPMorgan Chase, had said in 2018: “I don't look at a recession as a bad thing. I mean, it's bad for America. It's bad for the people that are unemployed. It's usually an opportunity for J.P. Morgan.”)
The Fed cut interests rates to nearly zero on Sunday, 15 March, and initiated a massive program of quantitative easing—purchasing bonds and long-term securities from banks. “The actions by the Fed appeared to be the largest single day set of moves the bank had ever taken, mirroring in many ways its efforts during the [2007-8] financial crisis that were rolled out over several months. Sunday’s move includes multiple programs, rate cuts and QE, but all in a single day,” journalist Steve Liesman reported. The Fed also coordinated with allied central banks (e.g., Canada, England, the European Union, Japan) to increase the availability of currency for commercial banks. The quantitative easing during the pandemic averaged out to roughly $120 billion per month.4
The world’s largest financial corporation, BlackRock, not the U.S. government, was program advisor and asset manager in the Fed’s purchasing of Treasury bonds and mortgage-backed securities. In the words of investigative journalist Jeanna Smialek, emails obtained through a records request, along with public calendar records, “show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.”
Stocks soared. The New York Times on 30 April 2020 announced, “Unemployment claims top 30 million while Wall Street has best month in decades.” On 8 May, Bloomberg News’ Lu Wang and Vildana Hajric reported, “[A]t 22 times forecast profits, the S&P 500 is trading at a multiple not seen since the dot-com bubble.” In July, JPMorgan Chase’s “corporate and investment bank posted a record $5.5 billion profit for the second quarter, which is more money than most entire banks typically generated before the coronavirus pandemic,” explained CNBC. On 14 October, the Wall Street Journal’s Liz Hoffman reported, Goldman Sachs’ “Pandemic Hot Streak Continues in Third Quarter.” In January of the new year, Reuters reported, “Market capitalization of world stocks surged to a record $88 trillion, a whopping $33 trillion jump from the March [2020] bottom.”5
Senior officials at the Fed allegedly invested in financial markets while the Fed was pumping money into those markets during the pandemic! The man leading the Federal Reserve during the pandemic was Jerome Powell. He had previously made a fortune in the financial industry, including as a director of the Carlyle Group, the private equity behemoth known to invest heavily in military industry. A Trump appointee, Powell was reappointed by President Joe Biden in November 2021.
Rich Richer
Top capitalists such as Amazon’s Jeff Bezos and BlackRock’s Larry Fink sold approximately $9.2 billion in shares of their own corporations between the beginning of February 2020 and the end of the third week in March 2020, the Wall Street Journal noted. The Journal did not suggest impropriety or insider trading, though the executives’ timing was immaculate. The superrich dove back into stock investment once the Fed had revived the market. In just two months, U.S. billionaire wealth increased by $434 billion as thousands of workers died and more than 38 million workers filed for unemployment. The greediest (Bezos, Buffett, Ellison, Gates, Zuckerberg) quickly gained $75.5 billion.6
By early December 2020, U.S. billionaire wealth had increased by $1 trillion. What might $1 trillion have paid for? More than double two years of budget shortfalls of U.S. local and state governments. After one year of the pandemic, the richest fifteen billionaires had gained $563 billion.
The political class in D.C. also took time to profit. In December 2021, Business Insider published its Conflicted Congress exposé. The five-month review of thousands of financial-disclosure reports, covering all federal lawmakers and their top staff, supplemented with extensive interviews, revealed widespread profiteering. Dozens upon dozens of federal lawmakers from both sides of the aisle had profited from stock investments in corporations making COVID-19 vaccines and personal protective equipment. Insider put it gently: “Lawmakers' trading stocks of companies that have been profiting from their response to the pandemic has raised concerns about ethics and conflicts of interest…”7
Such profiteering was not an anomaly. Members of Congress profit from the business of war.8
The workers were disposable. Former CEO of Wells Fargo, Dick Kovacevich, spoke early in the pandemic about healthy workers under 55 years of age:
“We'll gradually bring those people back and see what happens. Some of them will get sick, some may even die, I don't know… Do you want to suffer more economically or take some risk that you'll get flu-like symptoms and a flu-like experience? Do you want to take an economic risk or a health risk? You get to choose.”
Lloyd Blankfein (@lloydblankfein), former head of Goldman Sachs, tweeted on 22 March 2020: “Extreme measures to flatten the virus ‘curve’ is [sic] sensible—for a time—to stretch out the strain on health infrastructure. But crushing the economy, jobs and morale is also a health issue—and beyond. Within a very few weeks let those with a lower risk to the disease return to work.” Economist and White House advisor Kevin Hassett spoke to CNN on 25 May: “Our human capital stock is ready to go back to work.” The phrase “human capital” was not just trendy corporate lingo. The phrase, common in the war industry,9 reflected the extent to which a profit-over-people mentality had infected the federal government.
No paid sick leave. No universal rapid testing. Work or starve. This was the choice the ruling class gave the working class during the pandemic, author Jon Schwarz concluded.
“The short-term danger is that Americans will resist the push from business to get us back on the job and making money for them. Their plan is simple: Starve us out. They know we can’t survive indefinitely without a continuing government bailout focused on regular people’s needs. So they’re going to stop that bailout from happening.”
Schwarz continued:
“The longer-term danger they face is that we’ll make the government work for us in the short term — and then we will realize we could make it work for us all the time by removing the threat of starvation from their arsenal. This would totally change the balance of power in society. This is their deepest fear, one that’s consumed them since World War II, the first time in history that everyday people gained consciousness that it was possible for them to use the government to create a world that puts them first, not their bosses.”
Poor Poorer
Expanded unemployment insurance in the United States during the pandemic (a process so heavily regulated and convoluted, under the guise of making sure money only went to people who really needed it, that benefits were denied or delayed to people in dire straits) often incentivized corporations to lay off workers instead of retaining them. If a worker didn’t come back to work, a capitalist could then report the worker as deliberately staying home and hence not eligible for the benefits.
Worldwide, workers’ wages fell by $3.7 trillion in 2020, the United Nations’ International Labor Organization reported. This huge drop was partially because corporations had eliminated millions of full-time jobs. The workers of the world were starving. Heading into winter 2021-22, the U.S. Census Bureau estimated that more than 21 million Americans did not have enough to eat.
The number of poor people in the U.S. grew by 8 million from May to October 2020, with child poverty rising rapidly, researchers at Columbia University indicated. The second half of 2020 saw the sharpest rise in the poverty rate since the 1960s. Roughly thirty-four percent of population was struggling to afford basic necessities—rent, food, medicine—as of December 2020. Millions of workers could never afford to retire. Poor people died from COVID-19 at twice the rate of wealthy people, and people of color were more likely to die than whites.10
People of color were hit hard by corporate layoffs and Washington’s policies. The Guardian reported in summer 2020 that the share of households of color with zero or ‘negative’ wealth (debt exceeding the value of assets) was “much higher than the share of white households.” Generation after generation of discriminatory policy—the slave trade, Jim Crow law, separate and unequal, predatory lending, and other forms of systematic discrimination—created this racial wealth gap, noted Darrick Hamilton, professor at Ohio State University. Some undocumented workers did receive limited assistance in the form of the brief expanded child tax credit program of 2021, but the federal government largely excluded them from pandemic relief programs. Writing for The Marshall Project in December 2021, journalists Julia Preston and Ariel Goodman concluded, “Immigrants were left out of thousands of dollars of vital payments, even though they were working in an essential food industry and paying taxes. Their exclusion meant that aid did not reach an especially vulnerable group of Americans: their children, most of whom are citizens because they were born in the United States.”
Societal maladies advanced. The Centers for Disease Control and Prevention (CDC) estimated that more than 100,000 people died in the U.S. from drug overdoses during April 2020 through April 2021, the country’s highest ever yearly death toll from drugs. Experts attributed the rise in overdose deaths to individual isolation, synthetic opioids, and decreased access to treatment and recovery. To this one must add: the mental health crisis that comes from being atomized workers (creating profit for the ruling class, which hoards that wealth) in the core capitalist country, where there is a steep price on all necessities of life, including housing and healthcare. Data indicated that teenagers dying from opioid overdoses increased by 94% during 2019-2020 and by an additional twenty percent during 2020-2021. More than 45,000 people in the U.S. died from gun-related incidents in 2020, a thirty-five percent increase from the year before. This “was the highest number of firearm homicides in twenty years,” the head of the CDC's National Center for Injury Prevention and Control, pointed out.
Polluting, instead of disposing of toxins in a safe manner, is one of the easiest ways for capitalists (and the large corporations they lead) to save money. Two weeks into the pandemic, the Environmental Protection Agency (EPA) announced a relaxation of regulations, letting owners of factories and power plants determine for themselves if they’re able to meet the requirements regarding reporting of air and water pollution. (Self-monitoring is common in the war industry and among top users of war-industry products.11) Who suffers the most from pollution? The poor and working class.12
The Supreme Court soon hindered the legal ability of states and tribes to block polluting industrial projects such as fossil fuel pipelines. Shortly thereafter, the court limited the EPA’s power to regulate power plants’ carbon dioxide emissions. Money from fossil fuel tycoons had helped some of the judges ascend to their current rank. Corporations and the wealthy also access the court’s justices via the Supreme Court Historical Society, a nonprofit charity that solicits money from corporations, law firms, and the wealthy, even while the court is deciding on matters affecting corporate interest.
Philanthropy
Top capitalists accrue money by taking the profit that workers create, seriously underpaying workers in the process. They also stash their riches in tax havens and influence government in order to water down labor law, dilute regulation, and obtain tax breaks. They then present their donations (“philanthropy”) as the solution to many of the ills that their economic system causes. They get a tax write-off, whitewash their harmful behavior, and often get to control how the receiving program uses the donated funds. Sometimes they openly exploit their donation, like when the billionaire co-founder of Home Depot called a top scientist at the hospital bearing his name, New York University Langone Health, with a question about the coronavirus early in the pandemic. Philanthropy is far better, in billionaire eyes, than paying an equivalent amount in taxes that go to the public good. The superrich look generous while they continue to hoard wealth.
Top capitalists were adept philanthropists prior to the pandemic. Infamous examples included Blackstone CEO Stephen Schwarzman funding the College of Computing at MIT and BlackRock CEO Larry Fink funding the Center for Finance at UCLA’s Anderson School of Management. Leaders of the war industry also played the game. Marillyn Hewson, CEO of Lockheed Martin at the time, gave millions to the University of Alabama, the owners of Sierra Nevada Corporation gave millions to the University of Nevada-Reno College of Business, and David Rubenstein, co-founder of the Carlyle Group, gave millions to Harvard University. Bill Gates delivered the master stroke when establishing The Giving Pledge, wherein the greediest promise to eventually donate most of their hoarded wealth to charitable causes. Bill Gates was richer in 2021 than he was in 2010 when he established the pledge.
The executives in charge of healthcare facilities across the country accepted billions of dollars in government assistance for their facilities during the COVID-19 pandemic while laying off or cutting the pay of thousands of workers. These executives, of course, continued to pay themselves millions.
Profiting off the pandemic, capitalists tried to use philanthropy to soothe the restive masses. The for-profit hospital juggernaut HCA Healthcare fed at the taxpayer-funded bailout. HCA executives then demanded that workers comply with wage freezes and the halting of payments to pensions, otherwise, executives indicated, they’d have no choice but to fire workers by the thousands. When the press caught wind of these demands, the corporation’s CEO donated two months’ worth of his $1.4 million salary to a workers’ fund. It sounded generous until workers realized that the executive’s salary was only a small portion of his total compensation (salary, bonuses, and stock options). The executive’s two-month donation ended up being less than one percent of his total compensation. And he’d likely write that donation off his taxes, political analyst Jim Hightower surmised. “That means we taxpayers — including the nurses and others he’s knocking down — not only underwrite his fat take-home pay, but we also subsidize his face-saving philanthropic gimmick. What we have here is a raging virus of executive suite greed doing deeper damage to our society than COVID-19 ever could,” Hightower concluded.
Executives in the business of war pulled the same trick. The Leidos chief executive reportedly donated a portion of his 2020 salary to the corporation’s COVID-19 relief fund. Indicating that the corporation’s business troubles were “worse than anything we’ve seen,” including the business disruption that followed the 9-11 attacks, the chief executive of CAE said he and his executive team were taking a 50 percent cut in salary. The corporate consultancy and regular military contractor McKinsey & Co. offered the government “philanthropic prices” on its normally expensive fees, with reduced rates ranging “from $125,000 per week (for the two-consultant package) to $178,000 (for five),” ProPublica reported. Lockheed Martin reportedly pledged early in the pandemic at least $18 million to charity and protective equipment manufacturing, as it lobbied heavily to keep the war machine churning.13
Essential and Critical
The bureaucrats and executives in leadership positions within the fascist bundle known as the military-industrial complex reacted to the pandemic by doing what they’re structurally bound to do: care for big business. Ellen Lord, a former Textron executive, was Pentagon undersecretary of acquisition and sustainment at the start of the pandemic. In the words of a Pentagon spokesperson, Lord was committed “to daily communication and collaboration with the defense industrial base, especially the defense industry trade associations.” Such associations include the National Defense Industrial Association, the Aerospace Industries Association, and the Air and Space Forces Association. In a letter (pdf) dated Thursday, 19 March, to the Senate Armed Services Committee, the CEO of the National Defense Industrial Association defined industry’s wish list. Atop the list was “a federal exemption from state and local orders restricting facility access for businesses doing required national defense activities.” In a letter (pdf) dated Friday, 20 March, to the Secretary of Defense, executives from the Aerospace Industries Association pushed for the federal government to designate the industry “essential.”
Washington was already on the ball. In collaboration with industry, the DHS Cybersecurity and Infrastructure Security (CISA) division issued an advisory list on 19 March identifying critical industries. The “defense industry” made the short list. (War corporations were running DHS’ CISA division, a conflict of interest that went unreported.) The following day, the Pentagon declared war corporations and their suppliers to be “critical infrastructure,” helping executives order the workers back to work. Undersecretary Lord issued a memo on the same day, emphasizing, “If you work in a critical infrastructure industry, as designated by the Department of Homeland Security, you have a special responsibility to maintain your normal work schedule.” Her rhetoric could be described as fascist: “We need your support and dedication in these trying times to ensure the security of this Nation. I understand that this national emergency presents a challenge and we are dedicated to working closely with you to ensure the safety of the workforce and accomplishments of the national security mission.” The Pentagon then coordinated with state governors to ensure that local restrictions didn’t impede the war industry.
Workers were scared. The president of a machinist’ union in Fort Worth, Texas, directed the blame at Washington: “I wish the people up there on Capitol Hill would get busy and be proactive and shut it down for a couple of weeks and give them time to do a deep cleaning.” In summarizing the situation at a General Dynamics shipyard in Maine, the Washington Post noted, union leaders “said the workforce is being used ‘as sacrificial lambs to meet the needs of our customer.’ Temporarily closing the plant would not hurt national defense, they wrote.” Journalist Sarah Lazare spoke with a worker at a subcontractor of Lockheed Martin, who feared, “We are not able to maintain social distancing… There are no dividers between desks or anything… They’ve increased the amount of cleaning they’re doing. They’ve brought in plastic dividers. They’re trying to mitigate things, but in the environment we’re in, it could spread pretty quickly.”
When pressed about the danger of keeping these workplaces open, corporate executives washed their hands of the matter by pointing to the U.S. government. In the words of the Washington Post, the corporations “said they have no choice — the Pentagon is their main customer. It sets the rules.” Stellar trickery! One portion of the fascist structure, industry, had asked another portion, the Pentagon, for industry to be considered “critical infrastructure” and then, once government eagerly made it so, dodged responsibility. Industry executives have a history of dodging responsibility after influencing policy.14
The Pentagon did not track COVID-19 deaths among workers in the war industry.
Industry executives, particularly those leading corporations that had regular business with commercial airlines, tossed workers aside. On Wednesday, 18 March, Textron Aviation announced it was furloughing over 7,000 workers (23 March-29 May). As the public stopped flying the friendly skies, Boeing announced it would cut around 16,000 workers, mostly in the corporation’s commercial aviation wing. General Dynamics’ Gulfstream division laid off around 700 workers in Savannah, Georgia, according to information filed with the Georgia Department of Labor. Militaries use Gulfstream aircraft for VIP travel and intelligence gathering. On 28 July, Raytheon CEO Greg Hayes told investors that the corporation had already cut 8,000 jobs. “Some of those will come back with volume, some of them will be permanently reduced.” Roughly a month and a half later, Hayes stated that his corporation had shed 15,000 jobs so far during the pandemic (while he raked in an estimated $12.5 million in total compensation for 2020).15
While some corporate executives took advantage of the pandemic to trim the workforce, the nonstop flow of money from military and intelligence budgets and a desperate working class meant that corporations could continue hiring in business segments that worked on technology underpinning the new elective Cold War against Beijing and Moscow: cybersecurity, nuclear and conventional ordnance, intelligence software, hypersonic propulsion, satellites, and space launch. Thousands of working-class positions were available in the large war corporations during spring 2020.
War corporations, like all large U.S.-based multinationals, move jobs to where labor is cheaper and regulations weaker. Textron, Lockheed Martin, and Raytheon were among the corporations reportedly outsourcing to Mexico. Top officials in the fascist structure were quick to react when U.S. war-industry suppliers in Mexico shut down. Undersecretary Lord discussed the closures with the U.S. ambassador to Mexico and then wrote to the Mexican Foreign Secretary regarding reopening those businesses. On 22 April, the U.S. National Manufacturers Association sent an open letter to the Mexican President, urging him to get the relevant suppliers back to work. Fourteen of the letter’s fifteen pages were just the names of all the U.S. corporate executives who had signed on. On 24 April, the U.S. Acting Assistant Secretary of State briefed reporters: “Our embassy and here in Washington has been working very closely with Mexico, advocating for American firms that are part of the—some of this is just very difficult to understand for people in government to drill down and see what activity actually affects the supply chain for a different activity.” The pressure worked, and the facilities in Mexico soon reopened.
Work stoppages were few, far between, and brief. On 22 June, Undersecretary Lord confirmed that all locations of the war industry, which had closed during the early days of the pandemic, were now open for business. “Obviously for manufacturing we need people on the line, so we’re doing things differently in terms of following [CDC] guidelines and so forth.”16
Sustaining the Racket
Axios explained the overall capitalist mood that autumn: “Judging by their stated expectations, CEO confidence is not a good sign for workers.” The president of Raytheon’s intelligence and space division later boasted, not one “of our customers suffered an interruption because we couldn't get our employees to do their work. And that's a big win for us, for our employees, for the corporation.”
Military contracting didn’t skip a beat, though no weapon of war—no fighter jet, submarine, tank, bomb, missile, or software—could combat a virus. U.S. military contract announcements issued during the five workdays that followed the pandemic declaration of 11 March 2020 included $1.75 billion for naval nuclear propulsion, $319.7 million for engines that power the troubled F-35 aircraft, and $104 million for one year of aircraft maintenance at a large naval aviation unit. (There were 73 distinct contract announcements—for contracts, contract modifications, or task orders—issued during the five duty-days spanning 12-18 March 2020.)
Work continued on the program developing new land-based nuclear weapons, new rockets with which to launch spy satellites, and new submarines and aircraft carriers. All was well in profit and war.
Back in the undersecretariat in charge of acquisition and sustainment, Ellen Lord increased the progress payment rate on industry work: from 90% to 95% of costs incurred for small businesses, and from 80% to 90% for larger corporations. A “cost incurred” could be any spending on labor or materials. Billions of dollars flowed to the war industry. The largest corporations (Lockheed Martin, Raytheon, Boeing, Northrop Grumman) scarfed up most of these accelerated progress payments.
Prior to the pandemic, the U.S. military had regularly paid corporations that missed deadlines, delivered mediocre products, or underperformed.17 Now, after receiving accelerated progress payments, there was even less incentive to do a good job and finish on time.18
Did the Pentagon’s leaders believe that large war corporations were being open and honest about where they were allocating cash? “I believe they are,” said Undersecretary Lord. Betraying the dominance of industry within the fascist state, Lord stated, “I need to rely on CEOs of major primes to come forth with that data.” The accelerated payment program, which started under the Trump administration in March 2020, was extended under the Biden administration in February 2021. On what did many war corporations end up spending funds from this program? Buying back their stock, which increases the share price and therefore the wealth of shareholders.
Knowing that the CARES Act was must-pass legislation, U.S. Congress packed it with corporate giveaways, some of which had nothing to do with the coronavirus. Congress allocated $17 billion for “businesses critical to maintaining national security,” the New York Times reported. (Congress also stuffed in tax cuts benefitting the wealthy.) Signed into law on 27 March 2020, the CARES Act included $454 billion for the Treasury Department to give to the Fed. Flush with money it could leverage up to ten times, the Fed purchased bonds from Corporate America, even if the corporation hadn’t requested or needed assistance. Naturally, as part of this program the Fed purchased the bonds of ExxonMobil, Coca-Cola, Walmart, and other giants, including such prominent military contractors as AT&T, Boeing, and Caterpillar.19 Fed chief Jerome Powell explained that when companies have access to credit “they're less likely to take cost-cutting measures,” such as shedding workers. But the Fed’s bond-purchasing program did not require the corporations involved to keep workers employed.
Congress also gave the Pentagon roughly $1 billion—allocated under the Defense Production Act as part of the CARES Act—to increase U.S. supplies of medical equipment. The Pentagon’s leaders allocated most of these funds to corporations producing jet-engine parts, body armor, uniforms, drones, and satellite technology, the Washington Post reported.
After caring for industry and guiding Pentagon acquisition through the year,20 Ellen Lord gathered her belongings and returned to the war industry, joining at least seven corporations as advisor, fellow, or director.21
2020 turned out to be more profitable for the war industry than 2019.22 And U.S. corporations continued to dominate international sales of war goods and services: $285 billion, an increase of 1.9 percent over 2019.23
One year into the pandemic, Defense News asked how the large war corporations (“defense contractors”) were doing. Across the board, industry responded: It’s been business as usual. Industry analyst Byron Callan concurred: “Financially, it’s great. Companies have positive cash flow and no company suffered major trauma… There are a lot of congratulations to go around for the department and industry for managing this thing.” Industry analyst Jim McAleese noted that the larger corporations are “swimming in excess cash.”24
Neoliberal Contagion
A given hospital in the U.S. was once controlled by a board of people from the surrounding community. Viewing healthcare as another way to make a profit, private equity firms in the 1990s started purchasing more and more healthcare facilities, including emergency rooms, hospitals, and nursing homes. Their capture of healthcare skyrocketed from $250 million in 2009 to $10.4 billion in 2018.25 Hospitals were about turnover, not healthcare: Get patients in and out while offering expensive elective procedures for the rich. The U.S. was incredibly vulnerable to any major health emergency.
When the COVID-19 pandemic hit, the U.S. government encouraged industry to perform governmental tasks. The Department of Defense, the source of horrific violence worldwide, was the lead U.S. government unit contracting with corporations for COVID-19 response.26 While DOD did deploy military medical personnel to civilian medical facilities around the country to work alongside or temporarily replace overworked hospital staff, corporations contracting with DOD deployed far more personnel in the pandemic response. Core to this response were large project management and engineering corporations such as AECOM and Parsons and rising giants such as PAE, which, while continuing their military contracting, contracted through DOD for domestic, civilian COVID-19 response, including the establishment of alternate care facilities across the country.27
The flow of money from government to corporations was immense. For example, on 9 and 17 April 2020, the U.S. Army Corps of Engineers issued funding—$5 billion and $586 million, respectively—in support of “the presidential national emergency declaration concerning the novel coronavirus disease.” Corporate recipients, seventeen total on these two dates, included such regular military contractors as General Dynamics, Emcor, J&J, and Sodexo, as well as smaller consultancies, such as Red Cedar Corporation of Brentwood, Tennessee.
The U.S. government (the Departments of Defense and Health & Human Services) contracted with the corporation Palantir to develop a product known as Tiberius for tracking vaccine distribution. The government fed data (“deidentified,” i.e. no information could reveal a person’s identity) to Tiberius from many different sources, including logistics corporations, the U.S. Census, and the CDC’s Vaccine Tracking System.28 Palantir also sold datamining and coronavirus tracking services to other U.S. government departments (Veterans Affairs, Homeland Security), as well as the United Nations and the governments of Austria, Canada, Greece, Spain, and the United Kingdom. Space Force and Air Force also purchased Palantir products, for crunching data about personnel and matériel.29
Some public health advocates and state politicians worried that the corporation’s substantial work in military, intelligence, and law enforcement might access the health information of undocumented immigrants that was gathered during the corporation’s COVID-19 response.
Like many large consulting firms, McKinsey & Co. had been expanding its U.S. military contracting in the years prior to the pandemic. Its work included analyzing military spending efficiency, working on supply chain logistics, supporting the F-35 Joint Strike Fighter “affordability campaign,” and managing some Air Force “strategic transformation initiatives.” Elsewhere, McKinsey reportedly aided the absolutist Saudi regime,30 helped facilitate the opioid epidemic,31 and was a stop on the revolving door between military and industry (officials such as Eric Chewning, Jesse Salazar, and retired Rear Admiral Kevin Sweeney had recently revolved through McKinsey and government).
McKinsey’s corporate offices pounced early in the pandemic, snagging customers from the federal (DOD, FEMA, FDA) to the municipal (Atlanta, Chicago, Los Angeles). ProPublica summarized, “Given that McKinsey consultants operate as advisers, with government officials charged with making final decisions, it can be hard to identify the firm’s responsibility for any given decision. But the firm’s government work has been steadily rising in the wake of a multidecade hollowing out of government (a trend McKinsey has promoted and ridden). Today, that increasingly means that if you examine the government’s response to the pandemic, you’re likely to find McKinsey’s fingerprints.” McKinsey often charged very high prices and used multiple employees to do the work that a single government civilian had been doing, and its work was regularly mediocre and unoriginal, ProPublica reported. A separate consultancy-cum-contractor, Deloitte, built the CDC’s costly, error-ridden Vaccine Administration Management System website, which was pitched to states as capable of handling scheduling, inventory, and reporting for COVID-19 vaccine jabs.
Bailing Out Complementary Industries
Under immense pressures deep below the Earth’s surface, dead animals and plants transformed over millions of years into fossil fuels. Capitalists gradually designed U.S. society around the use of these fuels, burned to produce electricity and engine power or refined into plastics. Underpaying the working class to mine the coal, drill the oil, and capture the natural gas, the capitalists pocketed the profit created by the workers, and then pocketed the profit from the economies that fossil fuels created and propped up. No effort was made to use such immense energy in an organized, deliberate fashion benefitting all of humanity. Fossil fuel soon underpinned daily life in the U.S., including food fertilization, production, transportation, and preservation.
A major exporter of fossil fuel and possessing the largest network of oil and gas pipelines of any country,32 the U.S. government subsidizes the fossil fuel industry to the tune of roughly $20 billion per year and does not require the industry to pay for deaths caused by its pollution (including its microplastics) or for any changes to Earth’s climate caused by carbon released during fossil fuel combustion. The U.S. military is the fossil fuel industry’s biggest single customer. It burns fossil fuels to train personnel, sustain its global infrastructure, and intimidate and harm governments and civilian populations.33
Given how crucial these fuels were to U.S. society, it was no surprise to see the Fed change its own rules to benefit fossil fuel corporations during the pandemic: On the last day of April 2020, the Fed expanded its lending program “to allow more debt, looser standards and bigger loan amounts,” journalist Alexis Goldstein reported. This rule change permitted oil corporations to use emergency relief funds (backed by the taxpayer) to reduce debt and repay creditors, the big banks. In the month following the Fed’s rule change some fossil fuel corporations paid their executives handsomely, even if the corporate stock was not performing well.34
The world’s biggest fossil fuel corporations soon made record profits.35 Guess where executives funneled profits! Industry infrastructure, executive compensation, and buying back stock.36
Commercial airlines help sustain the flows of U.S. capital and military transportation. They received three rounds of government assistance. Under terms of the deals, the airlines were supposed to limit executive compensation and not furlough workers involuntarily or reduce pay or benefits. Airline executives, however, implemented furloughs and early retirements, canning thousands of workers. Executives received bonuses, the Washington Post reported based on regulatory filings.37
Conclusion
The cost of vaccinating the world would have been five times cheaper if the corporations manufacturing vaccines weren’t reaping billions in profits, the People’s Vaccine Alliance calculated in July 2021. Three corporations—Pfizer, BioNTech, and Moderna—were charging governments worldwide up to $41 billion more than estimated production costs.38
Addressing the U.S. Chamber of Commerce the following summer, the White House coronavirus response coordinator promised more neoliberal gold: “Getting us out of that acute emergency phase, where the U.S. government is buying the vaccines, buying the treatments, buying the diagnostic tests—we need to get out of that business over the long run. And so, my hope is that in 2023 you’re going to see the commercialization of almost all of these products. Some of it is actually going to begin this fall.”39
Nick Schwellenbach in “Sidelining Small Businesses” (Project on Government Oversight, 24 Jun 2022) explained that the Defense Logistics Agency’s ten-year $33-billion Tailored Logistics Support program had been presented as way for the military to quickly obtain gear at competitive prices. True to neoliberal policy, DLA used corporations—four certified as small businesses—to implement the program. These corporations were then supposed to purchase from other small businesses. The four could, however, purchase from large businesses if the Small Business Administration gave them a waiver, which it often did. Remember waivers? They’re the legal instruments used to dodge rules, regulations, and laws. DLA craftily applied a waiver, which it had obtained earlier, to the larger $33 billion Tailored Logistics Support program, thereby routing the hundreds of millions of dollars to large corporations.
Over $16 trillion dispersed (1 Dec 2007 – 21 Jul 2010), per “Federal Reserve System: Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance” (Government Accountability Office, Jul 2011): <www.gao.gov/assets/gao-11-696.pdf>, p. 131.
See Christopher Leonard, The Lords of Easy Money (New York: Simon & Schuster, 2022) for a comprehensive review of the Fed’s behavior. For analysis of stock ownership by class, over time, see Edward N. Wolff, “Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?” (National Bureau of Economic Research, Nov 2017): <www.nber.org/papers/w24085>; Heidi Chung, “The richest 1% own 50% of stocks held by American households” (Yahoo Finance, 17 Jan 2019); Tim Smart, “Who Owns Stocks in America? Mostly, It’s the Wealthy and White” (US News, 15 Mar 2021); and Robert Frank, “The wealthiest 10% of Americans own a record 89% of all U.S. stocks” (CNBC, 18 Oct 2021).
Congressional legislation (passed in Mar 2020, Dec 2020, Mar 2021), totaling nearly $5.8 trillion in support to the capitalist economy, is detailed in Clarida, et al., “The COVID-19 Crisis and the Federal Reserve’s Policy Response” (Federal Reserve Board of Governors Finance & Economics Discussion Series 2021-035, 3 Jun 2021). Discussion Series analyses do not speak for all members of the Fed’s Board of Governors.
A year later, big banks (Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley) were set to post their highest-ever full-year profits. How? Mergers and acquisitions and investment banking fees. With record profits they bought back their own stock, invested in technology, and paid out hefty executive compensation. See “Wall Street banks set to report record profits for 2021” (Financial Times, 8 Jan 2022).
For indications that Amazon jacked up prices on necessities (disposable gloves, sanitizer, soap) and certain cleaning products early in the pandemic, see Day and Soper “Amazon Raised Prices on Essentials Amid Pandemic, Watchdog Says” (Bloomberg, 10 Sep 2020). Oxfam stated, “Jeff Bezos could personally pay each of Amazon’s 876,000 employees a one-time $105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.” Regarding U.S. energy and food corporations price gouging, Rep. Frank Pallone (D-NJ) stated, “I do think that corporate greed is motivating large companies to use the pandemic and supply chain issues as an excuse to raise prices simply because they can. And a lot of executives brazenly boast to investors about raising prices on consumers without consequences, and these executives are saying they’re going to continue to do so.”
See also Dave Levinthal, “‘Conflicted Congress’: Key findings from Insider's five-month investigation into federal lawmakers' personal finances” (Business Insider, 17 Dec 2021). Lobbying firms in 2021 “were more likely to be invested in by Congress” than firms that didn’t lobby Congress. “Lobbying companies outperformed nonlobbying companies, both in average and in Congressional portfolios,” reported marketed research analyst Unusual Whales <unusualwhales.com/i_am_the_senate/lobbying>, 28 Apr 2022. While just 6% of the businesses that received COVID-related contracts lobbied the federal government in 2020, they received over half of the money that was awarded within the first year to directly combat the virus. The government official in charge of running the Treasury Department’s responsibilities within the federal coronavirus bailout, Justin Muzinich, had relatives who benefitted financially from the bailout. Lawmakers reportedly had financial or familial ties to corporations that received loans under the Paycheck Protection Program, which had been intended for small businesses.
For bipartisan profiteering in U.S. Congress, see “Congress: Trading stock on inside information?” (60 Minutes, 13 Nov 2011): <www.youtube.com/watch?v=2zh30lm7aSQ>; David Moore and Donald Shaw, “The Members of Congress Who Profit From War” (American Prospect, 17 Jan 2020); Warren Rojas, et al., “At least 15 lawmakers who shape US defense policy have investments in military contractors” (Business Insider, 13 Dec 2021); Noel Randewich, “U.S. House speaker Pelosi's stock trades attract growing following online” (Reuters, 26 Jan 2022); and Alicia Parlapiano, et al., “Stock Trades Reported by Nearly a Fifth of Congress Show Possible Conflicts” (NYT, 13 Sep 2022). For a focus on fossil-fuel profiteering, see Brett Wilkins, “One in Four US Senators Still Hold Fossil Fuel Investments Even as World Burns” (Common Dreams, 5 Nov 2021) and David Moore, “Reps Bought Pipeline Stocks Before Passing the Infrastructure Bill” (Sludge, 13 Jan 2022).
Booz Allen Hamilton and other corporations worked on implementing military-related statutory and regulatory policy, guidance, specialty engineering, and human capital functions. CPS Professional Services (Falls Church) helped the Pentagon’s Office of the Under Secretary for Personnel and Readiness with “human capital management.” IBM (Reston, VA) developed and implemented military “policies, guidance, oversight, career field management and human capital management programs across the civil engineer enterprise.” Donald Durant’s American Human Capital LLC (Stafford, VA) contracted with the Navy for a variety of services. Relevant announcements: 2 Jul 2015, 30 Jun 2016, 21 Nov 2016, 30 May 2017, 31 Jul 2019, 12 Jun 2020. Top war corporations’ 10-K reports to the SEC regularly feature paragraphs, even whole sections, about human capital, covering the corporation’s workforce.
“A POOR PEOPLE'S PANDEMIC REPORT: Mapping the Intersection of Poverty, Race and COVID-19” (Poor People’s Campaign, April 2022): <www.poorpeoplescampaign.org/pandemic-report>. “Low socioeconomic status” was a top risk factor for COVID-19-caused death, Max Fisher and Emma Bubola reported. Why was being poor a risk factor? A former insurance industry executive answers: Because the healthcare system in the U.S. is “built for the elite.” The overall drop in life expectancy is covered in Ryan K. Master, et al., “CHANGES IN LIFE EXPECTANCY BETWEEN 2019 AND 2021: UNITED STATES AND 19 PEER COUNTRIES” (medRxiv, 5 Apr 2022); and Bernd Debusmann Jr., “US life expectancy falls to lowest level since 1996” (BBC News, 31 Aug 2022). Contributing factors included vaccine hesitancy, flouting such pandemic restrictions as distancing and masking, hasty elimination of pandemic restrictions to get people back to work, and exacerbating health conditions such as obesity, diabetes, liver disease, and mental illness. Black communities in the United States suffered very high death rates: 1.63 million excess deaths over twenty years (1999-2020) compared to the white population, based on CDC data. Overall U.S. life expectancy continued to fall in the wake of the pandemic. Systemic issues lowering life expectancy in the U.S. included child poverty, drug overdoses, easy access to firearms, fatal car crashes resulting from car-intensive infrastructure, food deserts, lack of universal healthcare, poor diet, racial segregation, social isolation, and teen pregnancy.
Northrop Grumman builds and tests its own rocket motor, and then reports to the Missile Defense Agency how the motor performed. Advertising agency GSD&M measures the effectiveness its Air Force recruiting campaigns. Calibre Systems monitors a portion of the military-industrial complex when conducting “cost and economic analysis of major weapons system programs and associated acquisition/financial management policies and procedures.” Contracts issued 30 Nov 2022, 12 Mar 2018, 23 Sep 2014. The war industry sometimes operated in an oversight role re: contracting in Afghanistan, per “AFGHANISTAN RECONSTRUCTION: GAO Work since 2002 Shows Systemic Internal Control Weaknesses that Increased the Risk of Waste, Fraud, and Abuse” (Government Accountability Office, 27 Jan 2021). The Saudi-UAE coalition that used U.S. weaponry to destroy Yemen monitored itself with regard to civilian deaths. It said it was doing a good job. See Alex Emmons “How a One-Word Loophole Will Make It Easier for the U.S. to Sell Weapons to Governments That Kill Civilians” (Intercept, 20 Jul 2018) and Declan Walsh, “In Saudi Arabia’s War in Yemen, No Refuge on Land or Sea” (NYT, 17 Dec 2018). The Israeli military’s investigation into its 1 Aug 2014 murder of 135 Palestinians in Rafah exonerated all Israeli troops involved. In autumn 2018, the Bersheeba District Court ruled that the Israeli state was not liable for killing a 15-year-old in Gaza. (The Israeli military had shot and killed the child on his own property at close range.) Israeli Prime Minister Yair Lapid said that an Israeli military investigation into its May 2022 murder of journalist Shireen Abu Akleh determined “conclusively that there was no intention to harm her.”
For pollution’s toll on the poor and working class, see Lylla Younes, Ava Kofman, Al Shaw, Lisa Song, Maya Miller, “Poison in the Air” (ProPublica, 2 Nov 2021); Marc Fawcett-Atkinson, “Life on Earth Can’t Handle the Chemical Industry’s Onslaught” (Mother Jones, 1 Feb 2022); Tom Perkins, “Americans exposed to toxic BPA at levels far above what EU considers safe – study” (Guardian, 6 Feb 2022); and Emma Farge, “Pollution causing more deaths than COVID, action needed, U.N. expert says” (Reuters, 15 Feb 2022). For industries’ broader polluting effects, see “Almost everyone now breathing polluted air, warns WHO” (UN.org, 4 Apr 2022).
David Moore, “Lockheed-Backed Reps Lobby Against F-35 Spending Cuts” (American Prospect, 13 May 2021); and Sarah Lazare, “Think Tank Funded by the Weapons Industry Pressures Biden Not To Regulate Military Contractors’ Emissions” (In These Times, 17 Nov 2021). Full LMT lobbying profile available at <www.opensecrets.org>.
When public outrage spiked after the House of Saud, a huge customer of the U.S. war industry, murdered Washington Post columnist Jamal Khashoggi, the Lockheed Martin CEO claimed, “We do business through the U.S. government… We take their lead on what we sell to 70 countries… It’s a matter of following the government’s lead.” The executive in charge of Raytheon’s international sales weaseled in a similar manner, concluding, “Our role is not to make policy, our role is to comply with it.” Raytheon’s CEO affirmed his corporation would follow D.C.’s lead, stating, “I’m pretty confident that we will weather this complexity.” The head of the National Defense Industrial Association urged Capitol Hill to not overreact.
General Dynamics CEO Phebe Novakovic, the Wall Street Journal later observed, “crisply declines to answer questions about American politics and foreign policy: ‘I have no intention of compromising or embarrassing my customer in any way.’” When confronted one month earlier by an activist regarding selling weaponry to Saudi Arabia, which was bombing Yemen, Novakovic replied, “Our role is to support the U.S. military and U.S. national security policy and the preservation of peace and liberty.”
Raytheon CEO Greg Hayes spoke at a Morgan Stanley investment conference, 16 Sep 2020: “I would tell you the commercial aero team has jumped on this crisis, and they're driving about $2 billion in cost reduction and $4 billion in cash conservation actions this year. These cost actions include the elimination of more than 15,000 positions across our commercial aerospace and corporate organizations. Those headcount reductions are nearly double the previous estimate of around 8,500 that we gave you back in July. And we're not done yet looking for further ways to reduce structural costs in all of our businesses.”
Raytheon’s 2020 10-K report to the SEC indicated that after the 2020 Raytheon-UTC merger, the new corporation, Raytheon Technologies, had “undertaken a number of actions to reduce our workforce and achieve cost synergies while retaining key talent necessary” for corporate success (p. 8). “Due to the impact of the pandemic on our businesses in 2020, we have taken a number of actions, including deferring merit increases and implementing temporary pay reductions, freezing non-essential hiring, repositioning employees to defense worker and making personnel reductions… At Collins Aerospace, 11% of the workforce was impacted by reductions (excluding divestitures), and at Pratt & Whitney, 13% of the workforce was impacted by reductions. Our [Intelligence and Space] and [Missiles and Defense] business units have not been as severely impacted by the pandemic as Collins Aerospace and Pratt & Whitney, and continued to hire in 2020 to support the growth of their businesses” (p. 9).
Temporary closures had included Boeing facilities in Puget Sound in Washington state, which made some aerial refueling aircraft and maritime reconnaissance aircraft, a Boeing plant in Ridley Park, Pennsylvania, which produced helicopters, and some F-35 production sites in Japan and Italy. On 10 April, Anthony Capaccio of Bloomberg News reported, “of 10,509 [industry] locations tracked or monitored by the Defense Contract Management Agency, 135 had closed at some point,” with 49 of those locations reopening “after an average of about 10 days.” On 30 April, Aaron Mehta of Defense News updated the situation: 93 of the 10,509 were still closed.
The F-35 Joint Strike Fighter program was the most salient example of an underperforming overbudget product. The KC-46 tanker (used to refuel aircraft midflight) also struggled. Problems included debris inside the aircraft, glitches in the camera system used during refueling, and potentially dangerous fuel leaks. For use at sea, sundry products included ship-to-shore connectors with cracked propeller blades, subpar metal for submarines, underperforming littoral combat ships and Zumwalt-class destroyers, and aircraft carriers that struggle to launch aircraft. See, inter alia, Capaccio, “Marine Hovercraft From Textron Flawed by Propeller Cracks” (Bloomberg, 29 Oct 2020); Johnson, “Feds: Company provided subpar steel for Navy submarine hulls” (AP, 15 Jun 2020); Grazier, “The Littoral Combat Ship and the Folly of Concurrency” (Project on Government Oversight, 17 Jul 2020); Keller, “The Navy’s ‘little crappy ships’ have a monster new problem” (Task & Purpose, 16 Dec 2020); Larter, “US Navy halts deliveries of Freedom-class littoral combat ship” (Defense News, 19 Jan 2021); Thompson, “The U.S. Navy’s Titanium ‘Tin Can’” (Project on Governmental Oversight, 10 Jan 2019); Harkins, “Megadestroyer Zumwalt Delivered to the Navy After Years of Setbacks” (Military.com, 24 Apr 2020); Jared Keller, “The Navy’s $13 billion supercarrier still can’t do the one thing it’s absolutely required to do” (Task & Purpose, 11 Jan 2021). For a veteran’s look back at poor products that troops used in Afghanistan, see <https://taibbi.substack.com/p/an-afghanistan-veteran-looks-back>.
Scholar of government contracting Charles Tiefer explained, “The 20% deferred portion of incurred costs is one of the few tangible incentives for the contractors to complete steps forward. Dropping the 20% to 10% halves the incentive for the contractors to reach deadlines in making progress on their work.”
On 30 March 2020, the Pentagon’s acting director of pricing and contracting issued guidance to contracting officers that, in the words of journalists Valerie Insinna and Aaron Mehta, “essentially said industry should not be penalized for missing performance targets as a result of the ongoing pandemic.” On 2 April, the Pentagon modified this announcement to include not just upcoming work but also work that the war industry had recently completed. The announcement also provided industry a cushion, stating that any COVID-19-related delay would result in “an equitable adjustment of the contract schedule and cost,” meaning the Department would adjust its contracts so that a corporation would not get hit in the wallet.
AT&T sells its IT infrastructure and knowledge to U.S. intelligence (e.g., DIA, NGA), cryptologic infrastructure to NSA, and cyber operations and administration to Space Force. It also runs some military communications networks and is deeply involved in military R&D, particularly algorithm and software development for Joint All Domain Command & Control (JADC2), the Pentagon’s pie-in-the-sky connect-it-all plan. Relevant contracting announcements issued 2020 (27 Apr, 6 May, 31 Jul, 1 Sep, 25 Sep, 30 Sep) and 2021 (2 Mar, 28 May, 28 Jun). Boeing sells everything from bombs and missiles and aircraft, to satellite construction, launch, and sustainment. Caterpillar sell vehicles, construction equipment, and engines and engine parts.
For the remainder of DOD help to industry, see Marcus Weisgerber, “Pentagon Starts Bailing Out Companies That have Lost Business Due to Coronavirus” (Defense One, 11 Jun 2020) and Aaron Mehta, “DoD hands out $84 million in recovery funds for small drone makers and a space firm” (Defense News, 10 Jul 2020). The Pentagon injected approximately $4.6 billion into the war industry from March 2020 through the end of January 2021, according to military spokesperson Jessica Maxwell: Roughly $73.2 million in industry reimbursements, $700 million in Defense Production Act funding, and $4 billion in increased progress payments. Not to mention substantial payroll-tax deferral that the war industry took advantage of via the CARES Act.
Ellen Lord joined The Chertoff Group as a senior advisor (February 2021), Johns Hopkins University APL as a senior fellow (April 2021), military aviation corporation AAR as a director (April 2021), Voyager Space as a director (March 2021), Clarifai, an AI corporation, as a senior advisor (June 2021), military IT powerhouse SAIC as a strategic advisor (July 2021), and GEOST, a corporation specializing in electro-optical and infrared sensors, as a director (January 2022).
Fiscal 2020 SEC filings (10-K reports) indicated broad profitability: Lockheed Martin (net sales $65.4B, profits $6.83B); Raytheon Technologies (net sales $51.7B, profits $4.32B); General Dynamics (revenue $37.9B, earnings $4.13B); Northrop Grumman (sales $36.79B, earnings $3.189B); Boeing Defense, Space & Security (revenue $26.2B, earnings $1.54B); L3Harris (revenue $18.19B, net income $1.086B); Honeywell (net sales $32.6B, net income $4.77B); Booz Allen Hamilton (revenue $7.46B, net income $483M); Leidos (revenue $12.29B, net income $629M); SAIC (revenue $6.37B, net income $229M); CACI (revenue $5.72B, net income $321M); and Textron (revenue $11.65B, profit $751M). KBR (revenue $5.76B, net income -$51M) seems to have been the only large corporation to take a temporary hit.
Figures regarding international sales were reported in “Business as usual? Arms sales of SIPRI Top 100 arms companies continue to grow amid pandemic” (SIPRI, 6 Dec 2021). The FBI investigated SIPRI under espionage grounds in the 1980s, according to official documents. The documents did not indicate if or when the investigation was closed.
Aaron Gregg reported on the top dog: Lockheed Martin “saw soaring profits and revenue… even as coronavirus-inflicted closures decimated other industries.” In 2020, “it posted record sales of $64.5 billion, representing a 9 percent increase over 2019.”
A 2019 academic study indicated that a private equity firm buying a publicly traded corporation typically results in lost jobs and wage reductions. See Steven J. Davis, et al., “The Economic Effects of Private Equity Buyouts” (8 Jul 2021).
Private equity firms set a record in 2021, gobbling up over $1 trillion worth of corporations.
In support of the Federal Emergency Management Agency and the Department of Health and Human Services, DOD typically contracted via Army Contracting Command, Army Health Contracting Activity, the Defense Logistics Agency, the Washington Headquarters Services, and the U.S. Army Corps of Engineers. Funding allocated included CARES Act funds, defense emergency response funds, FEMA funds, and public health and social services emergency funds, contracting announcements indicated.
As a military contractor, PAE was training the Air Force, maintaining aircraft, developing electronic sensors, and running U.S. military installations overseas, according to contract announcements. PAE continued its role as a military contractor while receiving contracts for COVID-19 response, including establishing medical care facilities and administering virus testing. Private equity—Lindsay Goldberg and American Securities—would later gobble up PAE and combine it with other corporations to create a large corporation called Amentum.
Peter Loftus and Rolfe Winkler, “Palantir to Help U.S. Track Covid-19 Vaccines” (WSJ, 22 Oct 2020); Lisa Simunaci, “Tiberius Platform Aids COVID-19 Logistics, Delivery” (Office of the Secretary of Defense Public Affairs, 16 Dec 2020); and Dave Nyczepir, “HHS renews, expands Palantir’s Tiberius contract to $31M” (FedScoop, 26 Jul 2021).
Relevant contracts issued 22 Oct 2020, 30 Apr 2021, 30 Aug 2021, 30 Nov 2021.
For reportage on Saudi PR, see Michael Forsythe, et al., “Consulting Firms Keep Lucrative Saudi Alliance, Shaping Crown Prince’s Vision” (NYT, 4 Nov 2018); Michael J. de la Merced, “McKinsey Takes Heat for Its Saudi Work” (NYT, 22 Oct 2018); and Lydia Dennett, “Universities on the Foreign Payroll” (Truthout, 5 Mar 2019).
“McKinsey to pay nearly $600 million for US opioid crisis role” (Deutsche Welle, 4 Feb 2021). “After Massachusetts filed a lawsuit against Purdue, Martin Elling, a leader for McKinsey’s North American pharmaceutical practice, wrote to another senior partner, Arnab Ghatak: ‘It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything’ other than ‘eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us,’” Walt Bogdanich and Michael Forsythe reported in “McKinsey Proposed Paying Pharmacy Companies Rebates for OxyContin Overdoses” (NYT, 27 Nov 2020, updated 5 Nov 2021).
Jeff Brady, “Despite their climate pledges, the U.S. and others export huge amounts of fossil fuels” (NPR, 31 Oct 2021) and Mohammed Hussein, “Mapping the world’s oil and gas pipelines” (Al Jazeera, 16 Dec 2021).
The Defense Logistics Agency (DLA) is typically the military “contracting activity” that purchases from the fossil fuel industry. DLA purchases from large corporations such as BP and Chevron and numerous lesser-known corporations such as Sinclair Oil of Utah. The U.S. military purchases coal, too (e.g., a 3 Sep 2020 purchase of nearly $34M of sub-bituminous coal from Usibelli Coal Mine in Healy, Alaska).
The U.S. military hires corporations to implement “energy conservation measures” at some military facilities (e.g., a 13 Dec 2019 contract for energy management control system upgrades, lighting changes, and alterations to steam distribution at Naval Submarine Base New London, CT), but these measures do not reduce the MIC’s overall polluting footprint, which includes carbon emissions, particulates, nuclear waste, depleted uranium, PFAS, remnants of exploded and unexploded ordnance, and ordnance manufacturing processes. The U.S. military contracts far more often (and allocates far more money to) corporations that build and maintain its fossil fuel infrastructure, whether it is a new fuel station at Marine Corps Base Guam, new fuel storage tanks at Patrick Air Force Base, CO, or new diesel generators at the Naval Medical Center aboard Naval Base San Diego.
An essential but underreported portion of the U.S. military’s fossil fuel use is the constellation of vessels (often corporate-owned and -operated) that transports fuel and petroleum products worldwide in support of military exercises and operations. Some military contractors, such as Arctic Slope Regional Corporation, also work on fossil fuel industry infrastructure.
The fossil fuel industry purchases surveillance products and infrastructure protection from the U.S. war industry. The U.S. military operates out of allied countries sitting on substantial fossil fuels, such as Bahrain and Qatar. Saudi Arabia, a tight ally of Washington since the Quincy Pact, signed in 1945 when U.S. fascism was consolidating, also hosts U.S. military personnel.
Reuters explains that energy corporations, “more than any other sector, measure performance only against other companies in the same industry, who tend to suffer at similar times.” Energy corporations use a measurement known as relative total shareholder return (TSR), which they benchmark “against a pre-determined group of peer companies,” allowing executives “to get big payouts even if their companies’ stocks lose value.”
“Top fossil fuel companies made $65 billion while consumers hit by gas price crisis” (GlobalWitness.org, 29 Nov 2021); “Fossil fuel profits surged in 2021” (Bailoutwatch.org, 24 Feb 2022); “Exploitation: Oil Giants Set Record Profits While Taking Advantage Of Inflation and the Crisis In Ukraine” (Accountable.US, Mar 2022); Collin Eaton, “Exxon, Chevron, Shell Report Record Profits on High Energy Prices” (WSJ, 29 Jul 2022).
Kenny Stancil, “Big Oil Profits Surge to $174 Billion in 2021 Amid Rising Gas Prices: Report” (Common Dreams, 6 Dec 2021) and Emily Barone, “Oil Companies Posted Huge Profits. Here’s Where the Cash Will Go (Hint: Not Climate)” (Time, 11 May 2022).
Three rounds of government financial assistance totaled more than $50 billion, “including extensions of the Payroll Support Program in December 2020 and again in March [2021] as part of a far-reaching coronavirus aid package backed by [U.S. President Joe] Biden.” For more on executive compensation and shareholder payouts in an era of subpar airline service, see reporting from journalists David Sirota and Andrew Perez and the 12 Jan 2023 appearance of the American Economic Liberties Project’s William J. McGee on Bad Faith podcast.
People’s Vaccine Alliance reports available at <peoplesvaccine.org>. In November 2021, the Alliance revealed that Pfizer, BioNTech, and Moderna were making a combined profit of $65,000 every minute.
A separate thorough analysis of contracts indicated that massive pharmaceutical corporations charged the government of South Africa higher prices for COVID-19 vaccines than Western governments. Johnson & Johnson, for example, charged South Africa fifteen percent more per vaccine dose than it charged the European Union, according to the Health Justice Initiative, September 2023. See <healthjusticeinitiative.org.za/pandemic-transparency>.
In May 2021, journalist Hanna Ziady published a piece, “Covid vaccine profits mint 9 new pharma billionaires,” indicating that those nine billionaires had a combined wealth of roughly $20 billion. Eight different superrich investors who were already billionaires prior to the pandemic increased their wealth by $32 billion. 40 people became billionaires during the first year or so of the pandemic via the profits of companies producing protective equipment, vaccines, diagnostic tests, or software scheduling vaccination campaigns, journalist Giacomo Tognini reported in April 2021.
“Path Forward: Special Update with White House COVID Czar Dr. Ashish Jha” (U.S. Chamber of Commerce Foundation, 16 Aug 2022): <www.youtube.com/watch?v=w-vhRQVdcTk>.