Wednesday, January 25, 2023

Cutting Cost Centers

Begin With Budget Cuts to Military
Nicholas Johnson
The Gazette, January 25, 2023, p. A6

Republican Grover Norquist thought government should shrink enough he could drown it in a bathtub.

The current House seems to share that goal. Where should they begin?

Peter Drucker was called the founder of modern management. American and Japanese businesses owe him big time for his proposed reforms. One was the concept of cost centers, tackle the big stuff.

So what’s the largest cost center? That’s easy. Military appropriations.

We want to protect our people and borders. There are good reasons for having a military. The question is: how much?

The administration’s request for $733 billion is more than the defense spending of the next nine nations combined! Might that be figurative and literal overkill? [Photo credit: U.S. Strategic Command; the ultimate cost of the USS Gerald R. Ford aircraft carrier, R&D and construction, was $17.5 billion. See "SOURCES," below.]

We have 750 bases in 80 countries. Programs and operations are so vast few if any know how much money went where or what happened to it. Accountants say it’s simply impossible to audit the military.

As the House’s own website reports, “the founders felt that war should be difficult to enter.” They believed giving the House sole constitutional power “to declare war” would increase that difficulty. Members would be paying the price financially and with their children.

Today? Not so much. There’s no draft. Congress can be generous — $64 billion for Lockheed, $42 billion for Raytheon. In return, defense contractors are generous campaign donors. This year Congress boosted its generosity with $58 billion more than the $773 billion requested.

Defense spending is designed to keep things from happening outside our borders. Civilians don’t use or even touch the weapons.

Domestic spending makes things happen inside our borders. The Declaration of Independence says the purpose of government is to secure our unalienable rights to life, liberty, and pursuit of happiness. These rights not only increase our quality of life with things we can touch and use — education, food, health care, housing, and highways -- they improve our economy.

What’s worse, there’s evidence our defense spending is not doing us that much good.

As Abraham Maslow wrote, “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.” How’s that hammer been working for us in Vietnam, Iraq, Afghanistan, and elsewhere?

China isn’t perfect. Maybe we aren’t either. But China is helping build other countries’ infrastructure, economic growth — and China’s access to their resources. The U.S. showcasing “my military is bigger than yours” may create more wartime allies — and wars — but few true friends.

Some of America’s “best and brightest” are at the top of the military. They know the human costs of war. They approach it with the analytical rigor of the Powell Doctrine. (Questions like: “What non-military strategies might be better? What’s our exit strategy? Why will conditions become, and stay, better after we leave?”)

We pride ourselves on “civilian control of the military.” There are times when we might have been better off with military control of the civilians.

Defense appropriations. The best place to start cutting cost centers.

Nicholas Johnson, when U.S. Maritime Administrator, had some responsibility for military sealift during the Vietnam War.

Grover Norquist. “Grover Norquist,” Wikipedia, (“Norquist favors dramatically reducing the size of government.[12] He has been noted for his widely quoted quip from a 2001 interview with NPR's Morning Edition: "I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub."[55][56]”)

Cost Centers/Peter Drucker. Peter Drucker, Wikipedia, ("the founder of modern management." [2] [ Denning, Steve (August 29, 2014). "The Best Of Peter Drucker". Forbes.] . . . "The fact is," Drucker wrote in his 1973 Management: Tasks, Responsibilities, Practices, "that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the common good, no one else can or will."[25])

Troy Segal, “Profit Center: Characteristics vs. a Cost Center, With Examples,” Investopedia, Dec. 07, 2020, ("Peter Drucker coined the term "profit center" in 1945.")

Sayantan Mukhopadhyay, "Cost Center vs Profit Center," WallStreetMojo, ("Cost Center is that department within the organization responsible for identifying and maintaining the organization’s cost as low as possible by analyzing the processes and making necessary changes in the company. . . . Management guru, Peter Drucker first coined the term “profit center” in 1945. After a few years, Peter Drucker corrected himself by saying that there are no profit centers in business, and that was his biggest mistake. He then said that there are only cost centers in a business and no profit center. If any profit center existed for a business, that would be a customer’s check that hadn’t been bounced.")

The USS Gerald R. Ford aircraft carrier. Photo from Alexander Timewell, "Making History on USS Gerald R. Ford as Deployment Nears," U.S. Strategic Command, Oct. 4, 2022, and see
Cost: Fox Van Allen, "Meet the US Navy's new $13 billion aircraft carrier; The USS Gerald R. Ford (CVN 78) is the most technologically advanced warship ever built," CNET, Dec. 10, 2019, ("The Ford itself will cost US taxpayers $12.8 billion in materials and labor. This doesn't take into account the $4.7 billion spent in research and development of the new carrier class." Total $17.5 billion)

Defense Appropriations. “U.S. Defense Spending Compared to Other Countries,” May 11, 2022, (chart: “The United States spends more on defense than the next 9 countries combined” [$801 B vs. $777 B])

Bill Chappell, “The Pentagon Has Never Passed An Audit. Some Senators Want To Change That,” NPR, May 19, 2021, (“The Pentagon and the military industrial complex have been plagued by a massive amount of waste, fraud and financial mismanagement for decades. That is absolutely unacceptable," said Sen. Bernie Sanders, I-Vt., who co-sponsored the bill with Sen. Chuck Grassley, R-Iowa, along with Sens. Ron Wyden, D-Ore., and Mike Lee, R-Utah.

Despite having trillions of dollars in assets and receiving hundreds of billions in federal dollars annually, the department has never detailed its assets and liabilities in a given year. For the past three financial years, the Defense Department's audit has resulted in a "Disclaimer of Opinion," meaning the auditor didn't get enough accounting records to form an assessment. . . . But critics note that all federal agencies, including the Pentagon, have been under the same requirement to undergo an independent financial audit since the early 1990s. Every other federal department has satisfied audit requirements since fiscal 2013, when the Department of Homeland Security had its first clean audit.”)

“FY23 Defense Budget Breakdown; Army, Air Force, and Navy-Marine Corps budget and contracting priorities,” Bloomberg Government,,appropriation%20for%20this%20fiscal%20year (“President Joe Biden’s proposed $773 billion budget for the Defense Department . . .. ‘Yearly U.S. Defense spending on contractors; Total defense spending on contractors in the past five years,’ 2021 – $408.8 Billion, 2020 – $448.9 Billion”)

John M. Donnelly, “Pentagon: Hill added $58 billion to current defense budget; Additions included money for disasters, war in Ukraine, ships and more,” Roll Call, July 14, 2022, (“Defense Department appropriations legislation for the current fiscal year funded more than $58 billion worth of military projects that the administration did not request, according to a first-of-its-kind Pentagon report.”)

“Defense Primer: Department of Defense Contractors,” Congressional Reference Service, Dec. 19, 2018,,Afghanistan%2C%20Syria%2C%20and%20Iraq. “List of Defense Contractors,” Wikipedia,

“Military-Industrial Complex,” Wikipedia,

“GOVERNMENT CONTRACTOR DEMOGRAPHICS AND STATISTICS IN THE US,” Zippia, (“How Many Government Contractor Are There In The Us? There are over 5,138 Government Contractors in the United States.”)

Military bases. Doug Bandow, “750 Bases in 80 Countries Is Too Many for Any Nation: Time for the US to Bring Its Troops Home, CATO Institute, Oct. 4, 2021, (“some 750 American military facilities remain open in 80 nations and territories around the world. No other country in human history has had such a dominant presence. . . . Washington has nearly three times as many bases as embassies and consulates. America also has three times as many installations as all other countries combined. . . . “These bases are costly in a number of ways: financially, politically, socially, and environmentally. US bases in foreign lands often raise geopolitical tensions, support undemocratic regimes, and serve as a recruiting tool for militant groups opposed to the US presence and the governments its presence bolsters. In other cases, foreign bases are being used and have made it easier for the United States to launch and execute disastrous wars, including those in Afghanistan, Iraq, Yemen, Somalia, and Libya.”)

Top Defense Contractors. “Top 100 Defense Companies for 2022,” Defense News, (Top 5 with Defense Revenue in billions: Lockheed Martin ($64.4), Raytheon Technologies ($42), Boeing ($35), Northrop Grumman ($31.4), General Dynamics ($31))

Founders’ intentions. U.S. House of Representatives, History, Art & Archives, “Power to Declare War,” (“Like many powers articulated in the U.S. Constitution, Congress’ authority to declare war was revolutionary in its design, and a clear break from the past when a handful of European monarchs controlled the continent’s affairs. . . . Like George Mason of Virginia, the founders felt that war should be difficult to enter, and they expected congressional debate to restrain the war-making process. . . . For the Members, to declare war against a foreign power is to send their constituents, their neighbors, their family, and even themselves into harm’s way.”)

Constitutional provisions. “The Congress shall have Power To . . . provide for the common Defence and general Welfare of the United States.” —U.S. Constitution, Article I, section 8, clause 1

“The Congress shall have Power . . . To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water; “To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; “To provide and maintain a Navy; “To make Rules for the Government and Regulation of the land and naval Forces; “To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; “To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress” —U.S. Constitution, Article I, section 8, clauses 11–16

Declaration of Independence. National Archives, Milestone Documents, “Declaration of Independence (1776),” (“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed . . .”)

Our hammer. “Law of the Instrument,” (“The law of the instrument, law of the hammer,[1] Maslow's hammer (or gavel), or golden hammer[a] is a cognitive bias that involves an over-reliance on a familiar tool. Abraham Maslow wrote in 1966, "If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail."[2])

The Powell Doctrine. Nicholas Johnson, “The Powell Doctrine” in “Afghanistan: Our Unaffordable War to Nowhere,”, Aug. 29, 2017,

“Powell Doctrine,” Wikipedia, (“The Powell Doctrine states that a list of questions all have to be answered affirmatively before military action is taken by the United States: Is a vital national security interest threatened? Do we have a clear attainable objective? Have the risks and costs been fully and frankly analyzed? Have all other non-violent policy means been fully exhausted? Is there a plausible exit strategy to avoid endless entanglement? Have the consequences of our action been fully considered? Is the action supported by the American people? Do we have genuine broad international support?[2]”)

Eisenhower’s Military-Industrial Complex. National Archives, Milestone Documents, President Dwight D. Eisenhower’s Farewell Address (1961), Transcript, Jan. 17, 1961, (“America's leadership and prestige depend, not merely upon our unmatched material progress, riches and military strength, but on how we use our power in the interests of world peace and human betterment. . . . there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. . . . This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. . . . In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. . . . only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. . . . this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect. . . . [The conference] table, though scarred by many past frustrations, cannot be abandoned for the certain agony of the battlefield. . . . Together we must learn how to compose difference, not with arms, but with intellect and decent purpose. . . . To all the peoples of the world, I once more give expression to America's prayerful and continuing inspiration:

We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.”)

Speech writer Malcolm Moos. “Malcolm Moos,” Wikipedia, (“Moos joined President Eisenhower's staff as a special assistant in 1957 and became his chief speech writer in 1958. Among the many speeches Moos wrote for President Eisenhower, he wrote Eisenhower's valedictory speech which warned of the influence of the military-industrial complex in 1961.[3]”)

# # #


prophet of doom said...

This is absolutely on point. In part we are also continuing to "rely" on expensive "old" technology. The Ford (and the related carriers) are part of the problem. They are, for the most part, the equivalent of the WWII Battleship. Large, expensive assets that you are unwilling to risk, which are surprisingly delicate, and which don't actually add a lot in terms of capability. One old North Korean diesel-electric submarine could sink the Ford. (And a diesel-electric "sank" the Reagan during ASW exercises in 2005). Further, the Ford has lots of expensive planes -- many of which are used to deliver "attacks" that can be provided from far less expensive drones. This is one of many examples.

The issue is that "people do not die on request" and thus these old tech do not "go away" without a major incident (Pearl Harbor, the Bismarck, the Hood, the Prince of Wales and the Repulse, the last charge of the Yamato). We keep trying to fight the last war AND the next war with the result that we spend far too much.

Of course the other thing that needs to be done is a return to an actual progressive income tax with more brackets and higher rates in the top bracket and a lifting of the cap on social security (and perhaps the creation of a floor where below a particular wage, the employer must kick in 100% of the FICA, not 50/50)

Greg Johnson said...

I'm reminded of Jake Harriman, the Force Recon Marine platoon commander who believed the best way to stop terrorism was to leave the military and work to end poverty around the world. He started Nuru International which has had numerous success stories, reported by Forbes, Stanford Magazine, MSNBC, Fox Business, The New York Times, Christian Science Monitor, Al Jazeera, and the U.S. Naval Academy. Learn more at

A video clip of Jake telling his story is linked here with the video is queued up to 2m 52s to skip some of the initial video which some viewers may find unpleasant: