The War Dividend and the Corporate Media
By Scott Henson
February 1991; page 6; Volume 2, No. 4
Even the most casual observers now recognize that our much-celebrated "Peace Dividend" now has been invested in the Persian Gulf war. But what of a War Dividend? The Wall Street Journal reports that "General Dynamic's Tomahawk missiles get huge publicity for hitting almost all their targets in Iraq. Lockheed's Stealth fighters scored major hits. Martin Marietta also stands to gain from the impressive performance of its night vision gear in the allied attacks." And Raytheon's Patriot missile has received front-page coverage across the country - advertising it couldn't purchase if it owned a mint.
These and other contractors' livelihoods depend on the largesse of Congress - Lockheed, for example, does 85 percent of its business with the federal government according to its 1990 10-K financial statement. And Congress' willingness to dig deep in the future depends largely on public support for the gulf conflict. The Wall Street Journal cites political consultant William Schneider, who argues that "public support depends on the perception that the war is being won." To cultivate this support, the military-industrial complex already has allies in the right places. The corporate proxy statements of a few of the major media show that they share boardmembers with major defense contractors.
Former Secretary of State Cyrus Vance, for example, sits on the board of General Dynamics as well as The New York Times Company. Vance also is chairman of the New York Federal Reserve Bank. General Dynamics, in addition to manufacturing the Tomahawk missile, holds large military contracts with the Saudi Arabian government under its "Peace Shield" program. New York Times director Charles Price II also sits on the board of Texaco Inc., which contracts with the Saudi government to distribute its oil in the U.S.
Another "Peace Shield" contractor, Westinghouse Electric, has as a boardmember Rene McPherson, who also sits on the board at Dow Jones and Company. Dow Jones publishes The Wall Street Journal, Barron's and other publications. Prior to December 1989, Dow Jones director James Riordan held the position of Vice Chairman and Chief Financial Officer of Mobil Oil.
But the military mogul with the most media clout is General Electric, which owns the National Broadcasting Company (NBC), GE, according to its representative George Jamieson, earns about one-sixth of its total consolidated revenues from government contracts. Jamieson says most of these contracts are with the military. With its total revenues at $54.5 billion in 1989, GE'S revenues from military contracts would approach $9 billion, compared with only $3.4 billion in revenues from NBC the same year. GE is a major subcontractor on the Bradley Fighting Vehicle and Apache attack helicopter. When Tom Brokaw endlessly interviews generals, admirals, and other "experts," or reports in glowing terms about the effectiveness of new weapons systems, he won't catch any flak from the GE board of directors.
GE boardmembers include William French Smith, U.S. attorney general under Ronald Reagan and now a Bush appointee to the Presdent's Foreign Intelligence Advisory Board. Another GE boardmember is David C. Jones, retired Air Force General and former chair of the Joint Chiefs of Staff. GE director Lewis T. Preston, who is connected to the Morgan financial empire, also sits on the board of British Petroleum, of which the Kuwaiti government owns almost 10 percent.
In addition, GE boardmember Barbara Scott Preiskel sits on the board of the Washington Post Company, which besides the Post, owns Newsweek magazine. Another Washington Post boardmember, Richard D. Simmons, is a member of the General Electric Investment Corporation Equity Advisory Board.
Capital Cities Inc., which owns the American Broadcasting Corporation (ABC), includes on its board Robert Bauman, Vice Chairman of Textron Inc., a prime contractor for the Cobra attack helicopter and a major subcontractor on the Abrams battle tank. Capital Cities boardmember Frank T. Cary sits on the board of Texaco, Inc., as well as the New York Stock Exchange. Boardmember Thomas Murphy also sits on the Texaco board of directors.
Gannett Co. Inc., which owns more than 80 daily newspapers including USA Today, also shares boardmembers with major defense contractors. Boardmember Julian Goodman sits on the board of McDonnell Douglas, the principal contractor for the Apache helicopter and a major subcontractor for the Bradley Fighting Vehicle. Andrew Brimmer, a director of Gannett since 1980, sits on the board of E.I. duPont de Nemours & Company, a major nuclear weapons contractor. Finally, Rosalynn Carter, wife of former president Jimmy Carter, sits on the Gannett board. Carter's husband, in response to the 1979 Iranian revolution, established the "Carter doctrine," which allows that the U.S. will protect the "free flow of oil" in the Persian Gulf with its own troops - the Carter doctrine provides the philosophical underpinnings for the current U.S. intervention in the gulf. In addition to its newspapers, Gannett owns 10 TV stations including KVUE/Channel 24 in Ausitn, and 16 radio stations including stations in Dallas and Houston.
Regardless of whether military contractors and their powerful friends in the nation's major media - can sustain the "perception that the war is being won," Bush's war might not improve their profit margins that much. The January 16 Wall Street Journal reported that unlike World Wars I and II, or the Korean and Vietnam Wars, the war in the Persian Gulf may boost the war industry's profits only marginally. The Reagan-Bush buildup created a weapons glut that only an extended war could deplete. "This war is different," the Journal said. "It's being fought out of inventory."
Still, wartime is the best time for defense industry profits - and at least the war might stave off further cuts in U.S. military spending. But whether the War Dividend becomes a reality, the Peace Dividend dissipated with the explosion of the first American bomb.