Military Contractors Raytheon, Lockheed Martin See Stock Prices Soar Amid
Iran Crisis
Lockheed Martin, famous for its fighter planes, helicopters and missiles,
saw its stock price spike to over $416, a jump of seven percent almost
overnight. Raytheon and General Dynamics saw similar increases.
by Alan Macleod
January 06th, 2020
By Alan Macleod @AlanRMacLeod
War. Motown singer Edwin Starr claimed it was nothing but a heartbreaker and
good news only for the undertaker. But another group rubbing their hands at
increased tensions with Iran are military contractors, who saw their stock
prices soar at the increased chance of conflict.
Lockheed Martin, famous for its fighter planes, helicopters and missiles,
saw its stock price spike to over $416, a jump of seven percent almost
overnight. Other defense corporations like Raytheon and General Dynamics saw
similar increases in their companies' value. Meanwhile, Northrop Grumman saw
a nine percent rise in its share price, as the stock market rushed to buy a
piece of a highly profitable company.
On January 3, the United States carried out a successful assassination
attempt of Lt. General Qassem Soleimani via drone, as the Iranian officer
and statesman left Baghdad airport to join a peace mission between Iran,
Saudi Arabia and Iraq. Iraqi Prime Minister Adil Abdul-Mahdi revealed that
President Trump had personally thanked him for organizing peace efforts,
even as he was planning the assassination attempt, giving him the mistaken
belief that the U.S. gave its blessing to the event and would not attack the
Iranian General. Soleimani, respected and admired as a capable and dynamic
soldier, was widely considered to be one of the most powerful and
influential men in Iran behind Ayatollah Khamenei. The move is almost
universally expected to increase tensions in the Middle East, prompting
potential wars or other "chaos."
Millions of mourners came out for Soleimani's funeral, turning the occasion
into a show of strength and an act of collective defiance against Trump's
moves against Iran. Meanwhile, after the government of Iraq voted to expel
American forces from its country as a response to the drone strike, the
president announced he would send thousands of extra troops to the region.
Iran is currently considering its response, but the hashtags #ww3 and #wwIII
trended for over a day on Twitter, suggesting the global public was
extremely worried the action could spark a worldwide conflict. Over the
weekend the United States saw over 70 antiwar demonstrations across the
country.
However, economist and co-founder of the Center for Economic Policy Research
Dean Baker pointed out that Lockheed Martin's stock went up by over two
percent and Northrop Grumman by nearly four percent on Thursday, the day
before Soleimani's killing. "Looks like a lot of people should go to jail,"
he remarked, suggesting there was some serious insider trading afoot.
(MintPress recently spoke to Baker about how pharmaceutical corporations are
withholding life saving drugs from the public for profit.)
"
very interesting that Lockheed's stock went up 2.0 percent on Thursday, the
day before the attack. Looks like a lot of people should go to jail.
https://t.co/VvlSl4XTpX
- Dean Baker (@DeanBaker13) January 4, 2020
The biggest beneficiaries of an unfair stock market are often politicians,
whose portfolios, for decades, have done far better than is statistically
plausible. Using the financial disclosures of politicians, Professor Alan
Ziobrowski of Georgia State University found that members of the House earn
"abnormal returns" on their stocks, outperforming the market by six
percentage points. Senators, in higher office than House members, perform
even better, "showing some of the highest excess returns ever recorded over
a long period of time, significantly outperforming even hedge fund
managers," in Ziobrowski's study's words. "It's not rational to assume that
they are just plain dumb-lucky," he concluded. In the five years to 1998,
senators' stock portfolios beat the market by an average of 12 percent a
year.
The global wave of right-wing populism has been very good for weapons
producers. Despite presenting himself as an antiwar candidate, Trump has
greatly increased the military budget and expanded the U.S. role in Yemen.
More than half of all discretionary spending goes to the military, with
America spending almost as much on arms as the rest of the world combined,
according to the Stockholm International Peace Research Institute. The
president often likes to remind the country that the stock market is at an
all time high. Military contractors are among the best performing of those;
Yahoo! Finance notes that if you had bought Northrop Grumman stock five
years ago, you would have seen a 146 percent gain today. Meanwhile, in the
United Kingdom, nine of the ten largest weapons manufacturers saw their
stock prices increase immediately after Conservative Boris Johnson defeated
socialist antiwar candidate Jeremy Corbyn in December's General Election.
The recent rocketing of military contractors' stock values highlights the
growing contrast between the profit motive of capitalism and human survival.
So often, what is bad news for the world is good news for the
military-industrial complex.
MintPress is covering the Iran conflict closely.
