David Clark

Misconstruing @LockheedMartin’s CEO and other defense leaders’ comments about sustained demand signals for defense as meaning they “thrive on endless war” is intellectually dishonest. We are in a state of endless war because generations of civilian leaders have no idea how to actually use our military—and the industrial base that underpins it—to achieve our strategic objectives through time and space. We build credible deterrence by having a strong industrial base with predictable demand signals for the right technology, at the right price, at the right scale, at the right time. Not one of our leaders across the last three generations has figured out how to do this. But it’s not that hard, and it can be done. The problem is that you misinterpret the goal. The goal isn’t endless war, or to use our military every chance we get. It’s to establish and sustain a credible deterrence so that we don’t have to. The true mark of strength is not having to use force, while being absolutely capable of successfully doing so at all times in the eyes of our enemies. Having to use force is a mark of weakness—a failure of deterrence. But this system is short-circuited when government provides inconsistent direction and demand: cancelling programs it said it needed, rolling deliveries forward—or back—and exposing contractors to the massive risk of indeterminable appropriations cycles year after year. Say you’re a custom shoemaker. You have a unique design, and a big, credible customer wants to buy 5,000 pairs in year one. They tell you they’ll buy a boatload more in years two through seven. They can’t tell you exactly how many, but you need to be ready—and make the manufacturing capacity investments up front. You do your due diligence. You talk to the leadership and their bank. Even though they aren’t paying you up front, everything looks as solid as it gets. Hot dog! You go for it! You can’t make these shoes in your existing space, so you rent a building, upfit it, buy equipment, hire employees, firm up your supply chain, make commitments, and start deploying large numbers of dollars against the customer’s demand. Then the customer tells you they only need 1,500 in year one and 300 in year two—but they’re forecasting 10,000 per year in years three and four to make it up to you. You start freaking out. How are you going to pay your rent, machine payments, and employees? Will you have to lay people off? Can you make good on the commitments you’ve made? You pull every lever available to barely make it work. You reach the end of year two, ready for the big production run in year three that you desperately need. Then your customer tells you an event outside their control occurred. The board changed, and so did its priorities. On top of that, the customer’s bank isn’t willing to play ball. Now you’re up the creek. You’ve lost everything. Your company fails, you’ve let everyone down, and your word is meaningless to everyone who invested with you. Now get rid of the pretend scenario. Instead of making shoes, you’re making missiles. The customer is the government. The event is an election. The board changing means new leadership and new generals. The bank not playing ball is Congress failing to fund the promises the Pentagon signaled to you. Whether your business has several hundred thousand dollars in revenue or several billion, the principles are the same—and the consequences are just as catastrophic, proportionate to the size of your business. So the CEO of Lockheed—or any other defense company—calling for consistent demand is not evil or dystopian, nor is it suggesting that war is good or profitable. It’s just the CEO saying, in a politically acceptable way, that his customer—the government—sucks. And if the government sucked less, maybe Iran wouldn’t be making fun of our stockpiles on X, and maybe we wouldn’t be stuck in another endless war.

Said it yesterday, and I'll say it again. If the Pentagon considers COSCO a Chinese military company, why on earth are we giving its ships fewer inspections at American ports? Beijing couldn't ask for a better arrangement.