Recently Anil Agarwal (Vedanta Group) stated that "Government has no business to be in business" and hence divest in mining companies.
Clarification here Anil Agarwal is an NRI (Non Resident India) staying at London. He has key holding in mining and other industries in India.
My request to Prime Minister Modi, ignore him.
An article by Matt Stoller and Lucas Kunce on "America’s Monopoly Crisis Hits the Military" is a must read. The article covers excellently the problems plagued by Key American Industries which are important from national perspective.
The authors has clearly stated how Made in America is very important step in National Security. I will reproduce here some sections which are worth reading:
The story here is similar. When Wall Street targeted the commercial industrial base in the 1990s, the same financial trends shifted the defense industry. Well before any of the more recent conflicts, financial pressure led to a change in focus for many in the defense industry—from technological engineering to balance sheet engineering. The result is that some of the biggest names in the industry have never created any defense product. Instead of innovating new technology to support our national security, they innovate new ways of creating monopolies to take advantage of it.
Even more unsettling is the reliance on foreign, and often adversarial, manufacturing and supplies. The report found that “China is the single or sole supplier for a number of specialty chemicals used in munitions and missiles…. A sudden and catastrophic loss of supply would disrupt DoD missile, satellite, space launch, and other defense manufacturing programs. In many cases, there are no substitutes readily available.” Other examples of foreign reliance included circuit boards, night vision systems, batteries, and space sensors.
“The middle-class Americans who did the manufacturing work, all that capability, machine tools, knowledge, it just became worthless, driven by the stock price,” he said. “The national ability to produce is a national treasure. If you can’t produce you won’t consume, and you can’t defend yourself.”
It achieves these returns for its shareholders by buying up companies that are sole or single-source suppliers of obscure airplane parts that the government needs, and then increasing prices by as much as eight times the original amount. If the government balks at paying, TransDigm has no qualms daring the military to risk its mission and its crew by not buying the parts. The military, held hostage, often pays the ransom. TransDigm’s gross profit margins using this model to gouge the U.S. government are a robust 54.5 percent. To put that into perspective, Boeing and Lockheed’s profit margins are listed at 13.6 percent and 10.91 percent. In many ways, TransDigm is like the pharmaceutical company run by Martin Shkreli, which bought rare treatments and then price gouged those who could not do without the product. Earlier this year, TransDigm recently bought the remaining supplier of chaff and one of two suppliers of flares, products identified in the Defense Department’s supply chain fragility report.
Yet, Trandigm’s stock price thrives because Wall Street loves monopolies, regardless of who they are taking advantage of.
In other words, because L3 has a monopoly, there was no one else to pick. The system—a system designed by the financial industry that rewards monopoly and consolidation at the expense of innovation and national security—essentially made the pick for him. It is no wonder our military capacities are ebbing, despite the large budget outlays—the money isn’t going to defense.
The article is very lengthy and informative regarding National Security.
Worth reading.
Article source: Shankar Sharma
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