the War that never ends

[Terrance]

A typical, knee-jerk response, the  war on terrorism will bring benefit
the defense industry. I his speech Bush has made clear he expects an
unconventional war in           which military action is only one
element. Dragging Pynchon's paranoid cold war fiction into this is
ridiculous. Sure, a conflict of any kind inevitably use up stocks
of missiles and many other expendables that industry would be asked to
replenish, and  
there the Pentagon has already put companies on notice to prepare
production lines for faster-rate output of  few items. However, the
longer-term impact for the defence industry and the overall economy will
be small. I wonder if the guys on the TV programs are talking about the
defence stocks because it's idiots logic or because these stocks have
always beehn a "haven" in a falling market because of they are
considered 
non-cyclical in nature. Of course, defence companies have exposure to
the civil economy, and it seems likely that the losses incurred on the
civil front will not be made up, at defense companies,  even if the war
expenditures exceed Gulf War levels. That's only the core defense
companies. The rest of the economy will loseut. Take Boeing for example,
the share price is falling like a stone, it was up around 70 and is down
in the low thirties, some stimulus this war. The Bush administration has
not been a big help to the defense industry. The 33 bln increase that
the Pentagon had already sought for fiscal 2002 has not been seen by
manufacturers as a huge boost for them. Most of the money is not to be
spent on new equipment but on improving "readiness" -factors such as pay
and living conditions for the forces. So the budget, the spending, the
increases, will not 
go to big new projects and equipment programs. And if you are fighting a
war against terrorists, you don't go out and buy fighter aircraft and
submarines. Analysts are not expecting there to be any significant
positive impact anywhere, for anyone.