#WTH has victory become a dirty word?
90% of Ukraine money is staying in the US, but support is fading
This week we talk to General John Ferrari about why America is so uncomfortable with the idea of winning. And with Marc about his critical piece in The Washington Post laying out just where Ukraine money is going.
Three great quotes from the pod:
It's as if, after we vanquished the Soviet Union back in 1989, we just moved their economic policy into the Pentagon.
For the Pentagon to essentially cover up the lack of the defense industrial base, they have a strategy that says, “we'll only fight one war at a time, and it will be a short war.”
If you're assuming a short war and you blow through your stocks in a couple of weeks, well, what happens on month two of the war?
It’s become conventional wisdom that the Biden administration strategy for Ukraine (and probably now Israel too) is, don’t lose, but don’t win. Why, you ask? No idea. Perhaps the millennials at the heart of Team Biden think winning is unsporting. Like fifth grade — better that everyone just gets a participation medal.
But the reality is — as Marc lays out in painstaking detail in his important Washington Post piece — that we need to help Ukraine, because right now, it’s the only way we’re helping ourselves. The Pentagon is frozen. Congress is busy trolling losers on X. The President is confused. But miracle of miracles, the United States is actually spending 90 percent of all the money appropriated for Ukraine in the United States.
We’re replacing worn-out weaponry with new models because we’re shipping the old stuff to Kyiv. We’re innovating and testing new systems on the ground in Ukraine, where others’ lives are at stake. We’re keeping supply lines warm and hiring workers with critically important expertise in most of the states of the union. Without Ukraine, we will lose the next war faster. And if we gave more to Ukraine, we’d be better off, and so would they.
Why is the Biden administration slow-rolling aid? Part of it is the fact that this administration has pursued a policy of “divest to invest” with regard to defense. In their calculation, if we don’t buy any new materiel today, we can save money to invest in R&D. And then we’ll worry about buying weapons in a decade. Except: the production capacity that barely exists in 2023 won’t exist at all in 2033.
None of this is a clever argument to get you to support a war you think is unimportant to the United States. Here at WTH HQ, anytime someone else wants to sacrifice their blood to kill our enemies, they have our vote. But you do you. Second, forget about Ukraine. China is our enemy, and we won’t last a week against them. Remember that old joke about how you don’t have to be the fastest guy to outrun the bear, just faster than the other guy? We’re not.
So forget about whether you care about the fate of Ukraine. Think about how we’re revitalizing our defense base, renewing our expertise and production lines, and perhaps, too slowly, learning to run faster than the other guy.
HIGHLIGHTS
Why is America’s failure to invest in defense a sky-is-falling-in problem for deterrence?
JF: It's as if the Soviet Union, after we vanquished them back in 1989, we just moved their economy into the Pentagon of the defense industrial base. And what happened in the '90s is, we wanted a peace dividend, what we then did was we consolidated, the Secretary of Defense called everybody together for The Last Supper and eliminated competition, because the Defense Department thought it could be more efficient to have no competition.
And then, in the 2000s, we adopted a contracting technique, essentially contract monopoly. So if you think about in the '80s and the '70s, before that, the Air Force had fighter aircraft, the Navy had fighter aircraft, the Marine Corps had fighter aircraft, and you had three or four companies competing against each other. Well, we went to a Joint Strike Fighter, and essentially we said, well, in the United States, there will only be one, everybody else goes out of business and is dead. And then, you wind up why, what was supposed to be a low cost program becomes the most expensive program in the world, because nobody studies economics anymore.
What does a decaying defense industrial base mean for Joe-schmo?
JF: For the Pentagon to essentially cover up the lack of the industrial base, they have a strategy that says, we'll only fight one war at a time, and it will be a short war. That allows them to go over to Congress and say, everything's good, I have enough money, because we meet the requirement. Why Americans should be worried is the Chinese know our strategy, so do the Russians, the North Koreans, and the Iranians. And so, what you see now playing out is, after the disastrous pullout of Afghanistan, the Russians took advantage of that and moved into Ukraine. While Ukraine is going on and our industrial base is strained, then the Iranians, through their proxy forces, are now moving in the Middle East. And so, the Chinese are watching, and so the preconditions are set by us for the Chinese to move, sometime between now and the end of the decade and take advantage of our strained system, because we've assumed away the problem.
What does it mean, practically, that our defense industrial base is weak?
JF: So in 2014, when we were fighting ISIS in the Middle East, the United States Air Force went through its entire global supply of smart weapons that was meant to fight the Chinese in several months, and it took them three years to recover from that. So when you shoot a weapon today, it's a three-year recovery time. And if you're assuming a short war and you blow through your stocks in a couple of weeks, well, what happens on day two of the war? We saw the same thing happen in Ukraine, we shot through our supply of munitions pretty quickly, and the Ukrainians then had to go to alternative methods of fighting, which has really backed them into a corner of fighting a World War I style war of trench warfare here in the 21st century, when it should be a lot more high-tech, a lot more maneuver warfare, but we don't have the ability to give them the weapons that they need, and that's just... It's total war for the Ukrainians, but in the scope of the world, it's a regional conflict and we can't keep up.
We have swapped just-in-time production for three-years-late production?
JF: When you shoot a weapon today, you then have to go to Congress, ask for the money, that takes about a year, you then have a year to go through the contracting, and then the weapon is produced a year later. Under just-in-time, as you shot it, somebody would be producing it, but none of the conditions are in place for that. And just-in-time was meant to be an efficient way to cover up and to reduce costs, so instead of building big stockpiles, you would build it as you need it, but it turns out that if you don't have the production capacity, there are not idle workers sitting around waiting for the Department of Defense to call and say, hey, build those munitions now. You lose the workforce, you lose the production capacity, and it turns out that you cannot produce when you need it if you're not producing all along.
So continuing resolutions and uncertainty in funding impedes production?
JF: So I like to say that during a continuing resolution, which we're on now for anywhere from three to six months, the Pentagon gets its money in dribs and drabs. And so instead of shopping in bulk at Costco, in buying the big bulk of toilet paper, very cheap, it essentially buys at the local gas station. And if you've ever bought something there, they know you need it, and they charge a lot of money.
So we wind up paying a premium in order to buy less because of these continuing resolutions. The other anomaly we have in our system is that if the Pentagon wants to buy more than it did last year, like let's say you had a war in Ukraine and you need to buy more artillery shells, you are prohibited by statute from buying more until you get the new appropriation. So you wind up locked into procurement quantities and whatever you were doing last year, you can continue doing it at the same rate, but in smaller packets. So you can't actually move forward and adjust to the world that you're in. Because right now, today, as we sit here, the Defense Department is locked into a funding model that was created 18 months ago.
Explain our policy of divest to invest…
JF: We talked about in the '90s, the peace dividend, and we consolidated, then in the 2000s, we went on this transformation bent where, if it wasn't current production, then we had the insurgency. 2012 really did a number on the industrial base, again, because of sequestration, and we cut the procurement quantities down and let that all atrophy. And now, we follow it in the 2020s with the current administration, they have a policy of divest to invest. So their policy is, don't buy anything today, save your money up, invest in R&D, and then we'll buy it in the 2030s. Well, the production capacity is not going to exist in the 2030s.
And you look at the Taiwan problem, so we saw during COVID what happens if you lose the capacity to import and get semiconductors, the entire economy grinds to a halt. And so, the Chinese now have us essentially by the throat, because, at any time, they can squeeze that and threaten the Taiwan semiconductor industry, then our economy will take a huge hit.
And this impacts Ukraine directly, right?
JF: I think it's condemning Ukrainians to unnecessarily die. So again, it goes back to we are focused for some reason on, we've got what was once called by Secretary Gates, "Next war-itis." We're so focused on the next war, we don't want to fight this war. And the best way to prevent the next war is to actually fight this war. And so we should be all in. And by not going all in, at the end of this, people will go and they'll do the math, they'll go, "Well look, we didn't shoot a lot of ATACMS so I don't need to expand the production base. And the reason we didn't shoot a lot of them was because we couldn't produce them and we were worried about it." And so you wind up in this circle, it's like watching that little blue circle on your computer go round and round and round. That's what we do. We just go in circles and assume away the problem.
The consequence of our inactions?
JF: We're the wealthiest nation in the world, and that comes at a price, and the price is we must keep the global supply lines and the global peace. And right now, that's what's fraying. And everybody knows that the malign actors, the Russians, the Chinese, the Iranians, the North Koreans, and anyone else out there knows that if it's strained, it's a test of wills, that's what war is, and they know they can perhaps outlast us if we can't produce the weapons of war.
And the weapons we do have, don’t work?
JF: That goes back to the fact that the military has been operating on continuing resolutions, the fact inflation has been up, and so it hasn't been able to afford the readiness for the pre-positioned stock, so that's always the first thing cut, so you cut the maintaining of your war reserves and hope that nobody notices. Well, so the world erupted, and they noticed that when we sent it over there, we hadn't been maintaining the stuff for several years because it's expensive. Someone once said, it's expensive to prepare for war, but the only thing more expensive than preparing for a war is fighting a war, and the only thing more expensive than fighting a war is losing a war. So preparing for war is expensive, but by preparing for it, you deter those from who want to attack you.
What has become of the Pentagon?
JF: It's 30 years of learned helplessness and it goes back to the peace dividend and then a very ill faded turn towards next generation transformation and then sequestration. And so what you wound up with, if you go back to the Reagan era military was for two wars, right? Well, now we're down to one short war. And so the Pentagon assumes away the problem in order to maintain political alignment with multiple administrations over many years. And even you hear some people go, China, China, China, right? So essentially what we've done when we say that is we put a sign out to the rest of the world, the Russians, the Iranians, which is like, hey, come on in. The rest of the world is open for you all to take because we're just going to focus on one part of the world.
What does it mean for us that the world knows we’re worn thin?
JF: Ultimately the guarantor of security for the United States are the two oceans and our nuclear weapons. And so the one thing we don't want are to have discussions of that, but the challenge is as risk dials up around the world, right? Then you've got a message to your opponents, hey, wait a minute, we've still got... You kind of shake the saber a little bit and you make sure that they understand that you still have ways to influence them. So it is a dangerous game, and we live in dangerous times right now.
How is aid to Ukraine helping us prepare for other conflicts?
JF: So part of this aid is helping us to make those weapons better. We're learning. So essentially Ukraine becomes a testing ground for all of these weapons that you can improve upon. So they're going up against Russian electronic warfare and other methods. So what we're finding out now is how do you inject artificial intelligence? How do you make those weapons even smarter? And so spending the money and getting those weapons to war, figuring out which ones work, which ones don't, how do you improve them, how do you link them in with satellites and with intelligence and surveillance and targeting and what works and what doesn't work where essentially the Ukrainians are testing out all of our modern weapons fleet for us.
So all those weapons are getting tried out and then new weapons are coming in. So some of the money's going for the development of new weapons from startups, and we'll see which ones play out beneficially.
What about Israel and Taiwan — are production lines being revved up for those as well?
JF: No, they're not. Right? Because there's no supplemental for that and nobody's challenging the assumptions for those. And so I think the Congress saw this about two years ago, right? Because many people believe Taiwan will be a big naval battle and the Navy's got to get ready. And we wrote an article here about two years ago that said, "Hey, the Navy's broke and somebody needs to fix it." And Congress passed a commission to look at this, which was, hey, wait a minute. This is not good. We don't have the ships we need, the ships don't have the munitions. They need the Navy bought a ship but not the missile. And then other ships were cracking and said, we need to get on this. And a large part of that commission was supposed to address the industrial base, but only half the commissioners have been appointed. The other half have not been appointed.
And they haven’t been appointed because…
JF: You assume the commission, regardless of who you appoint, is going to come back and the emperor has no clothes. And if you don't want to spend more money on it right then, everybody who looks at the problem, especially the China problem in the Navy says, we've got a big problem here with shipbuilding and with the naval munitions and aircraft, and it's going to take money to solve the problem.
So, is there anything at all that we are working on?
JF: I think one of the problems we have, there's something called the Valley of Death where we have the most entrepreneurial startup system in the entire world. We create all this technology, but the Defense Department has a large problem getting it inside of its own system. Once again, because we're on this five-year program of record, once you start building something, you don't want to stop building it. And so we have a lot of challenges bringing a lot of new technology in. It wasn't really until after the disaster of Vietnam and Desert One. If we look back in history, we've always been unprepared for the next war.
So the top-down approach is the issue?
JF: Desert Storm was a success, but in some ways it was a failure because we bought our own advertising slogan, and we've been resting on this top down model of technology. And if you think about technology, when it first came, it really was top down. But if you look at it in the 2010s, it turned the world upside down, right? Content creators, technology, mobile computing, it became bottom up. But the US military stayed focused on this top-down model from Desert Storm and hasn't let go of that. But Hamas, the Iraqi insurgents, the Taliban, they have actually organized and embraced this bottom up technological revolution that we invented that our military really doesn't allow in because it's afraid to let things connect to the network, right?
It's afraid to bring it in because we worry about what's going to happen. It might displace a program we already have. So if you look at Starlink, so why is it that the US military was still building billion dollar satellites when it became obvious that low Earth orbit was going to come into being, and now we don't have actually much capability and we depend upon the private sector. So the big challenge is, so we became victims of our own Desert Storm success. The world saw what we did, they saw how the technology flipped upside down, and we have yet to make that transition in the US military.
What about China… what is their read on this?
JF: I think they were shocked at the performance of the Russian army as much as the Russians were at the start of the Ukraine war. And they saw the extent of the rot inside the current Russian army. I mean, we had led ourselves to believe that the Russians had downsized and were trying to professionalize their military. So what they had wasn't a lot, but we all thought it was going to be good. Nobody realized the extent of the corruption inside of that. So if you're in charge of the People Liberation Army, all of a sudden you're like, "Whoa, wait a minute, what about our formations? Do we know what's going on inside of them?" Because obviously the senior Russian leaders didn't know what was going on inside of their formations.
How can we fix this?
JF: I think it's going to take the American people with its political leaders to make a decision. Unfortunately, like we were talking about before, it's taken disaster on the battlefield when we send 18-year-old, young men and women now to die. They bear the brunt of all of these bad decisions that we have. I think now it's interesting as I watch the political establishment make decisions in wartime, and it's almost as if we're afraid of winning, so we do just enough to not lose. Secretary Gates talked about that in Afghanistan. He said, "Hey, we'll do just enough not to lose." Early in the Ukraine war, it was, "Well, I don't want to give them these types of weapons because they might actually win." We don't want them to win. There are some people talking now, holding the Israelis back, right?
And so the question is, the longer you put off winning, the longer war goes and the cost actually goes up higher. And it's that calculus of where the cost is. People seem to believe that if I can keep it longer at a minimum level, it's actually less and it's not. So you've got to win.
SHOWNOTES (a quickie this week)
Ukraine aid’s best-kept secret: Most of the money stays in the U.S.A. (Marc Thiessen, Washington Post, November 29, 2023)
US Defense Industrial Base and the War in Ukraine (AEI, 2023)
There has been a background drumbeat of America as a war monger, since the days of the USSR continuing unabated to Putin. It has been successful as now Republicans will not support efforts to defend Ukraine from Russia or Israel from Iran.