Valuetainment - The Monopoly on War： How the Military Industrial Complex is Bankrupting America

00:00:00.200 There's a lot of ways to make money in America, but I want to tell you about a business model

00:00:02.840 that's going to get you to look at this in a completely different way.

00:00:05.760 Let's get right into it.

00:00:06.760 Think about this.

00:00:07.760 If you and I run a hospital, we've got 200 beds, if there's empty beds, you and I are

00:00:12.120 not making money, so we need sick people to come to the hospital to make money.

00:00:16.120 That's how we make money.

00:00:17.120 If you and I own a hotel, we've got 500 rooms, guess what?

00:00:19.760 If our rooms are empty, we don't make any money.

00:00:21.900 We need people to come and stay in our hotel so we can make money, right?

00:00:25.560 Now imagine a business model where you needed more wars for you to make more money.

00:00:32.020 Let me say that one more time.

00:00:33.800 Imagine an industry you're a part of that you need more wars, potentially people dying for

00:00:40.100 you to make more money.

00:00:41.800 That's like the Department of Defense.

00:00:43.940 That's defense contractors.

00:00:46.000 The more wars, the more money.

00:00:47.740 You know how Papa John's says, better ingredients, better pizza.

00:00:51.360 Papa John's.

00:00:52.680 Defense contractors, ready?

00:00:54.220 More wars.

00:00:55.220 More people dying.

00:00:56.220 Defense contractors.

00:00:57.220 So before I piss some people off, I'm pro-military.

00:00:59.600 I was at the 101st Airborne, and I love the fact that the US has got a strong military,

00:01:03.620 but there's some people, some companies, that are seeing it as a way of making a ton of money,

00:01:08.720 and today we're going to dive into different data that's going to show to you where we compare

00:01:13.520 to other countries on how much money we're spending and how much profit's being made.

00:01:17.760 So if you give value out of this video, give it a thumbs up and subscribe to the channel.

00:01:20.680 Let's get right into it.

00:01:21.680 I've been in the insurance industry for 23 years.

00:01:23.680 There's a product in the insurance industry called life settlement.

00:01:27.080 So life insurance companies, when you buy a product, they want you to either live a

00:01:30.680 long life because they're never going to have to pay out the life insurance policy,

00:01:34.440 or they want you to kind of cancel your insurance policy 15, 20, 30 years later, right?

00:01:38.500 Like you're at a good age, you're healthy, cancel now, they keep the money, you're good

00:01:41.440 to go.

00:01:42.440 But there's a segment of life insurance called life settlement, very profitable.

00:01:46.440 What life settlement companies do is they go to an 80-year-old who's got a $5 million

00:01:51.440 insurance policy, whose premium's going up, and it's like paying $3,000, $4,000 a month

00:01:55.900 who can't afford it anymore.

00:01:56.900 They say, I can't afford to pay $3,000, $4,000 a month.

00:01:59.340 The life settlement company will say, hey, Mr. Jones, you got a $5 million insurance policy,

00:02:03.840 no problem.

00:02:04.840 If I give you $1 million cash up front, I'll take over the payments, but when you die,

00:02:10.700 that death benefit is coming to me.

00:02:12.860 That's called the life settlement.

00:02:13.860 So now, you may say, that's crazy.

00:02:16.240 Wait a minute, the 80-year-old is sitting there saying, man, that's crazy, I mean, there's

00:02:21.080 nobody else that can pay this insurance policy to.

00:02:23.620 My wife is there, or my husband's there, fine, I'll take the million dollars, and you can

00:02:27.260 take the rest.

00:02:28.260 I'll give it over to you.

00:02:29.260 Fantastic.

00:02:30.260 That person got a million dollars, they're happy.

00:02:31.420 You're the person that bought the policy.

00:02:33.100 You're not paying the payment $3,000, $4,000, $5,000 a month, that's what you're doing every

00:02:35.980 day.

00:02:36.980 You're like, did that guy die yet?

00:02:37.980 No.

00:02:38.980 Every day, you're celebrating or waiting for that person to die.

00:02:42.200 The sooner they die, the bigger rate of return you make.

00:02:45.260 So it's a weird industry to be a part of.

00:02:47.260 Some call it noble, some have a hard time selling this product, but here's the moral of

00:02:50.420 the story.

00:02:51.420 You're incentivized to hope for that client to die sooner, rate of return goes higher.

00:02:57.000 Military, industrial complex, defense contractors, Boeing, all these Raytheon, Northrop Grumman,

00:03:02.780 they all make more money.

00:03:04.060 The more wars they have, the more conflict there is, the more issues taking place, they

00:03:08.660 make more money.

00:03:09.660 That's simply how it is.

00:03:10.660 Now, it's not illegal, nobody's doing anything illegal, but that's your business model.

00:03:15.760 Having said that, I'm going to share a few things with you.

00:03:18.000 Okay, so what the US Congress is right now working on is a bipartisan effort to address

00:03:22.260 the problem with Pentagon falling victim to price gouging from defense contractors.

00:03:27.660 So now, I want you to think about this.

00:03:29.220 Shai Assad, who was a former executive VP and chief contract negotiator at Raytheon,

00:03:34.660 and defense department's most senior and awarded contract negotiator said the following.

00:03:39.320 He said the roots of the problem can be traced to 1993 when the Pentagon, looking to reduce

00:03:45.240 costs, urged defense companies to merge and 51 major contractors consolidated to five

00:03:52.040 giants, Lockheed Martin, Raytheon, General Dynamics, Northrop Grumman, and Boeing. 0.96

00:03:56.820 That could have been the dumbest thing they could have done. 0.99

00:03:58.820 Why? 0.97

00:03:59.820 Because you have 51 companies competing for number, so you and I taxpayers can get the

00:04:03.980 best rate.

00:04:04.980 Now, they're saying, nope, there's only five companies you can go through.

00:04:07.320 And those five kind of said, well, listen, guys, we can compete as much as we want, but

00:04:10.460 we're kind of on the same team as well because there's no other companies.

00:04:13.120 We got everybody.

00:04:14.380 Thank you to the government.

00:04:15.380 Wink, wink.

00:04:16.380 We're good to go.

00:04:17.380 Here's one thing to keep in mind.

00:04:18.380 The Pentagon overpays for almost everything, radar, missiles, helicopters, planes, submarines, everything

00:04:22.960 down to the nuts and bolts.

00:04:24.860 Matter of fact, NASA once paid $10,000 for an oil pressure switch that only cost $328.

00:04:29.880 And in the competitive environment, before the companies consolidated, a shoulder-fired

00:04:34.180 Stinger missile that cost only $25,000 in 1991 with Raytheon now being the sole supplier

00:04:41.160 of that missile, it now costs more than $400,000 to replace each missile sent to Ukraine.

00:04:48.400 Guess what?

00:04:48.900 It's a beautiful place for these guys to be.

00:04:50.420 You got a monopoly.

00:04:51.420 You're the only person that can sell it.

00:04:53.040 What a beautiful place to be.

00:04:54.140 I got no six, seven other people to compete against.

00:04:56.440 No.

00:04:57.440 Used to be $25,000.

00:04:58.540 Uh, what do you think we should sell it for, Johnny?

00:05:00.720 I think $400,000.

00:05:01.600 It's $400,000.

00:05:02.260 Paid.

00:05:02.740 You ain't got nowhere else to go.

00:05:03.920 You got to come through me.

00:05:04.920 So in a 60-minute interview, Bill Whitaker is interviewing General Bogdan, who's a three-star

00:05:09.640 lieutenant general with the Air Force.

00:05:11.720 And Bill Whitaker's talking about what's wrong with profits being made.

00:05:14.400 There is nothing wrong with profit.

00:05:15.600 This is America.

00:05:16.240 This is our system.

00:05:17.120 Chris says, no, there isn't.

00:05:18.520 But taking to an extreme industry may not make the best decisions in the best interest

00:05:23.040 of the government.

00:05:23.680 And he continued to say, we've only begun to feel the full impact.

00:05:27.240 In 2012, he was tapped to take the reins of the troubled F-35 Joint Strike Fighter program.

00:05:32.400 It was seven years behind schedule and $90 billion over the original estimate.

00:05:37.260 But Bogdan told us the biggest costs are yet to come for support and maintenance, which

00:05:41.980 could end up costing taxpayers.

00:05:43.940 Ready?

00:05:44.400 $1.3 trillion.

00:05:46.960 $1.3 trillion.

00:05:50.380 You're paying for it.

00:05:51.220 He continued, he says, we won't be buying too many F-35 planes as we thought because it

00:05:54.900 doesn't make a whole lot of sense to buy airplanes, more airplanes, when you can't even afford

00:05:58.580 the ones that you currently have.

00:05:59.820 And this continues, by the way.

00:06:01.180 According to 60 Minutes, contractors overcharge the DoD on almost everything the military buys

00:06:06.760 each year.

00:06:07.260 Almost half of the Pentagon's budget for the upcoming fiscal year will go to defense contractors.

00:06:11.500 Some contractors withhold pricing information from the Defense Department.

00:06:14.920 Boeing refused to share cost information for nearly 11,000 items between October of 2020

00:06:20.800 and September of 2021.

00:06:22.180 According to an annual DoD report to Congress on pricing data, that same report found Transdime,

00:06:28.300 a subcontractor was responsible for 275 data denials.

00:06:31.860 So Pat, what's the big deal?

00:06:32.740 Here's what the big deal is.

00:06:33.860 You know how Raytheon, Northrop Grumman, you know how all these guys, Boeing view the Department

00:06:38.080 of Defense?

00:06:38.580 Here's how they view them.

00:06:39.300 It's like when my wife, when she goes to the mechanic shop with the car, and they see

00:06:43.620 my wife, where's the husband? 0.98

00:06:45.120 Husband's not here.

00:06:46.060 I'm having a problem with this.

00:06:47.220 Oh, it's going to cost us $7,200.

00:06:49.060 It could have been $300.

00:06:50.380 My wife's going to call me and say, babe, it's going to cost $7,200. 0.78

00:06:53.800 Then I go back and say, bro, what is this $7,200?

00:06:56.140 Oh, well, you know, we can probably do it for $600.

00:06:58.160 What happened all of a sudden?

00:06:59.180 You see how somebody else goes?

00:07:00.720 They're like, oh, overcharge them.

00:07:02.120 Don't worry about it.

00:07:02.680 They don't check it anyway.

00:07:03.460 It's not their money.

00:07:04.220 Keep charging them.

00:07:04.880 That's kind of the best analogy to give you to tell you how Raytheon, Northrop Grumman

00:07:09.480 views Department of Defense.

00:07:11.400 So now let's look at U.S. government spending.

00:07:13.060 When you look at U.S. government spending, what percentage goes, where here's a top spending

00:07:16.360 by category and agency, 21% goes to Social Security, 14% help, 13% Medicare, 13% income

00:07:22.500 security, 13% national defense, and roughly 50% of that entire budget goes straight to contractors.

00:07:28.600 So imagine $900 billion, 50%, 450 goes straight to the contractors.

00:07:32.300 So you may say, well, Pat, that $900 billion, how do we compare to other countries?

00:07:35.900 Here's what U.S. compares to other countries when it comes down to our budget.

00:07:39.000 Ready?

00:07:39.380 United States spends more on defense than the next 10 countries combined.

00:07:43.440 That's China, Russia, India, Saudi Arabia, UK, Germany, France, South Korea, Japan, Ukraine

00:07:49.320 combined.

00:07:50.720 That's how much we spend.

00:07:51.980 And who makes money?

00:07:52.980 Look at the top 10 companies, how much they get from us.

00:07:55.500 This is just the contract that we have right now with these guys.

00:07:58.320 Lockheed Martin, $45.6 billion.

00:08:00.620 That's the obligation we have to them.

00:08:02.300 Raytheon, $25.7 billion.

00:08:03.820 General Dynamics, $22 billion.

00:08:05.580 Pfizer, $16.6 billion.

00:08:06.960 Boeing, $14.4 billion.

00:08:08.320 Northrop Grumman Corporation, $13.81 billion.

00:08:10.780 Humana, $7 billion.

00:08:11.980 H2 Corp, $6.5 billion.

00:08:13.640 L3 Heros Technologies, $6.5 billion.

00:08:15.880 BAE Systems PLC, $5 billion.

00:08:18.480 So again, if you're a pro-military like I am, you may say, but Pat, what's wrong with

00:08:21.960 that?

00:08:22.100 This is why America is so safe.

00:08:23.420 This is why nobody attacks us.

00:08:24.620 This is why we're doing...

00:08:25.140 Okay, I'm with you there.

00:08:26.100 But let's look at how the stocks of some of these companies have done compared to S&P 500

00:08:31.440 since 2000.

00:08:32.420 20-something years?

00:08:33.380 Let's see how they do.

00:08:34.200 If you look at this chart here, look all the way at the bottom.

00:08:37.200 You see that navy blue color?

00:08:38.420 That says 96.15%.

00:08:41.000 That's how S&P 500 has done from 2000 till today.

00:08:45.480 General Dynamics, the stock has gone up 548%.

00:08:50.640 Raytheon, 574.

00:08:52.620 Boeing, 736%.

00:08:54.860 Northrop Grumman, 1,160%.

00:08:57.800 And last but not least, all the way at the top, Lockheed Martin, 1,510% return on investment.

00:09:04.120 So when I saw this, I said, okay, I want to see who has the most shares in these companies

00:09:08.820 and what their incentives would be.

00:09:10.160 So let's take a look to see if there's any trend on what companies invest the most in

00:09:13.140 these companies.

00:09:13.880 All right, so if we look at the top 10 shareholders of Raytheon, all the way at the top, State Street.

00:09:17.840 Then it's who?

00:09:18.340 Vanguard.

00:09:18.840 Then it's who?

00:09:19.380 BlackRock.

00:09:19.900 Surprised?

00:09:20.560 All three are the ESG group.

00:09:22.700 So think about it.

00:09:23.580 They even had their hands in military.

00:09:26.400 So these guys are running our military.

00:09:29.540 You think they want more war?

00:09:31.580 You think they want more conflict?

00:09:32.940 Do you think they want a president that's a president of peace with no war going on?

00:09:37.540 Or do you think they want a president that creates more havoc, proxy wars, because there's

00:09:42.340 more contracts for these guys to make money?

00:09:44.780 I'm not speculating.

00:09:45.920 I'm simply asking an innocent question.

00:09:48.280 Let's look at Boeing.

00:09:49.260 Number one, shareholder, Vanguard.

00:09:51.100 Then it's Newport.

00:09:51.880 Then it's BlackRock.

00:09:52.760 Then it's State Street again.

00:09:54.020 Let's look at Lockheed, State Street at the top.

00:09:56.840 Then Vanguard.

00:09:57.640 Then guess what?

00:09:58.520 BlackRock.

00:09:59.120 Let's look at General Dynamics.

00:10:00.880 You got Longview, Vanguard, Newport, Wellington, BlackRock, Capital Research, State Street.

00:10:06.700 A little bit concerning to see what these guys are investing.

00:10:08.700 I mean, what do you think these guys want to do?

00:10:10.220 You think they want their stock to do good or bad?

00:10:12.040 They're like, yeah, let's do better.

00:10:13.980 Remember, better ingredients, better pizza.

00:10:16.340 Papa John, more wars, more people dying.

00:10:19.360 Defense contractors.

00:10:20.740 Come on, guys.

00:10:21.340 Let's create more wars. 0.99

00:10:22.560 And low key, let's talk about peace.

00:10:24.220 But we need wars because we're going to make more money.

00:10:25.940 Pure speculation.

00:10:27.040 Not telling you that's what's happening.

00:10:28.260 And I'm just saying it's a good thing to speculate.

00:10:30.360 Now, watch this.

00:10:31.220 We look at how many contracts are getting somebody else to outbid them and how many of them have

00:10:36.040 no competition.

00:10:37.040 10 years ago, in 2012, 57% of contracts, negotiation, had somebody that was shopping them as a second

00:10:44.240 opportunity.

00:10:44.940 Today, that's down to 52%.

00:10:46.480 What does this mean?

00:10:47.260 You may say, Pat, that's not that big of a deal.

00:10:48.740 Okay.

00:10:49.160 I understand.

00:10:49.800 But you know what it means?

00:10:50.580 Whenever there's fewer and fewer and fewer competition, guess who's winning?

00:10:54.400 You're sitting there saying, look, guys, you have Austin and somebody else.

00:10:56.900 Who do you want to go with?

00:10:57.900 And we're both on the same team.

00:10:58.960 You know how they hear a lot of times people say, well, you know, it's no such thing as

00:11:02.080 Republicans and Democrats.

00:11:03.360 They're both on the same team.

00:11:04.760 No, the establishment is on the same team.

00:11:07.100 This is a form of an establishment within the defense contracting industry.

00:11:10.620 We're part of the same thing, guys.

00:11:12.000 You're going to give me the same price?

00:11:13.140 Let's just do the same thing.

00:11:14.020 Cool.

00:11:14.400 Who are you going to go with?

00:11:15.120 We'll go with you.

00:11:15.680 We'll go with you.

00:11:16.120 Good.

00:11:16.340 We're good to go.

00:11:17.380 Everybody made their money.

00:11:18.500 Final thought.

00:11:19.080 So now you may say, Pat, you don't sound like a capitalist.

00:11:21.060 I'm a capitalist.

00:11:21.920 No, no, you do not sound like a capitalist.

00:11:23.580 What's wrong with these guys making money?

00:11:24.940 I totally get it.

00:11:25.600 There's many ways to make money.

00:11:26.780 One thing I don't want to do to make money is I don't want to see more wars with people

00:11:32.000 dying for you to make more money.

00:11:33.420 I've actually lived through a war as a kid.

00:11:36.200 So when I watch a movie and in the movie I hear the whistling sound, I have an immediate

00:11:40.740 reaction.

00:11:41.760 Maybe you watch a whistling sound.

00:11:43.120 You're like, oh, it's just a movie.

00:11:44.280 To me, a whistling sound goes back to me being six years old, living in Iran.

00:11:47.820 One, five-second pause, you don't hear anything, and then boom.

00:11:53.500 Next one comes, boom.

00:11:55.560 What's telling you is the bomb is getting closer to you, and you actually knew when the

00:11:59.220 plane flew over, and then you look at your mom and your dad and you're crying and you're

00:12:03.020 hoping it left us, and they say, it's okay, we're not going to get bombed.

00:12:05.700 That brings back certain experiences as a kid, right?

00:12:08.700 I don't want to see people dying, and there's a lot of innocent people going through this.

00:12:11.500 Now, on the capitalism side, how do we correct this?

00:12:14.400 We didn't work companies.

00:12:15.560 Can we tell these guys to break apart?

00:12:17.400 No.

00:12:18.000 Why not?

00:12:18.460 Don't we have a monopoly law?

00:12:19.700 Yeah, monopoly law, if you Google it right, it'll say 50%.

00:12:22.460 But isn't that the law?

00:12:23.940 Let's enforce it.

00:12:24.660 If they really wanted to enforce the monopoly law, iPhone right now, you know what the number

00:12:28.340 is?

00:12:28.600 At Google right now, what percentage of market share does iPhone own in America?

00:12:33.100 You know what the number is?

00:12:33.860 58%.

00:12:34.540 How come no one's calling an iPhone and Apple and saying, hey, you got a monopoly?

00:12:38.460 Have you heard a story of anybody approaching Apple right now to say you got a monopoly with

00:12:42.060 phones?

00:12:42.460 What's another competitor?

00:12:43.520 What do you own?

00:12:44.260 What are you watching this on right now?

00:12:45.460 An iPhone?

00:12:46.040 You know what the chances are?

00:12:46.720 Maybe a droid.

00:12:47.440 And maybe all your friends are saying, stop texting me with a droid and a group text.

00:12:51.260 You're green.

00:12:51.740 You need to be blue.

00:12:52.620 And you're being forced to change to iPhone because you're green.

00:12:55.260 You know what I'm talking about.

00:12:56.460 Well, I'm not going to switch.

00:12:57.740 Totally fine.

00:12:58.500 Guess what?

00:12:59.020 Apple has a monopoly.

00:12:59.920 No one's doing anything about it.

00:13:01.120 My concern is we need more phone companies, more contractors for people to compete with.

00:13:06.020 The only thing I can think about on how we can fix this is the founder mentality.

00:13:10.700 Let me explain to you what I mean by this.

00:13:11.880 So why do these guys not care?

00:13:13.840 Why do the employees at Department of Defense not care about the fact that I'm paying $10,000

00:13:17.880 for a $300 thing?

00:13:19.160 Here's why.

00:13:19.560 The individual I promoted to be the president of my company, the insurance company, is a

00:13:23.380 girl named Moral.

00:13:24.220 Moral Kishishinbekian.

00:13:25.800 She was my banker at Chase years ago at WAMO.

00:13:28.420 I hired her.

00:13:28.940 She's been with me for 13 years.

00:13:30.360 I kept telling her, I said, the day you treat the company's money like your own is the day

00:13:35.700 you're ready to be a C-suite executive.

00:13:37.540 And I kept saying this over and over and over again.

00:13:39.160 Which means some guys are like, how much is it going to cost?

00:13:40.960 Oh, it's fine.

00:13:41.460 $10,000, fine.

00:13:42.540 It's like, how much?

00:13:43.200 $10,000.

00:13:43.820 I got a couple other options.

00:13:44.860 This guy quoted $7,200.

00:13:46.160 This guy quoted $6,800 for the same exact thing.

00:13:48.560 And they would say, oh, well, you know, let me get back to give us 30 minutes.

00:13:52.560 They come back.

00:13:52.920 We can do for $6,700.

00:13:54.940 Bingo.

00:13:55.620 Saved the company $3,300.

00:13:57.520 She's got founder mentality. 1.00

00:13:58.900 Versus some other people are like, oh, just pay the 10 grand.

00:14:00.800 Who cares?

00:14:01.660 It's not our money.

00:14:02.540 Anyway, it's the company.

00:14:03.200 We can afford it.

00:14:03.940 No, you just cost us $3,300.

00:14:06.420 So how many of these employees working at Department of Defense have the founder's mindset?

00:14:10.280 None of them.

00:14:10.840 Why?

00:14:11.360 It's not their money.

00:14:12.060 It's your money they're spending.

00:14:13.040 So we have to figure out a way to change the comp plan on the way these guys are negotiating

00:14:19.260 on your behalf.

00:14:20.620 It's our country.

00:14:22.280 It's our money.

00:14:23.860 There's got to be accountability.

00:14:25.700 If there isn't any accountability with margins next to it, prices next to it, Congress can tell

00:14:31.900 every one of these companies, if you don't give us a price point on your products up front,

00:14:36.660 we ain't buying from you.

00:14:37.840 And they can figure out a way to cause these guys to give actual prices to not bully you,

00:14:43.440 the taxpayer.

00:14:44.280 That's one of the only ways I see us being able to hold these guys accountable.

00:14:48.500 All right, so if you got value out of this video, give it a thumbs up.

00:14:50.480 Subscribe to the channel.

00:14:51.340 If you got a solution on how you would fix this, comment below.

00:14:53.520 If you enjoyed this video, I got another video I want you to watch about how the military

00:14:56.560 is going to walk.

00:14:57.600 If you've not yet seen that, click here to watch that clip.

00:15:00.620 Take care, everybody.

00:15:01.300 Bye-bye, bye-bye.

00:15:01.700 Bye-bye.

Valuetainment - August 16, 2023

The Monopoly on War： How the Military Industrial Complex is Bankrupting America

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