The Daily Signal - How a Weak Defense Industrial Base Harms US Military

Episode Date: September 6, 2024

The U.S. military is only as strong as its ability to procure needed weapons systems and other defense materials, and right now, America’s defense industrial base is sorely lacking, experts say. “Unfortunately, like the armed services themselves, they have been neglected,” Robert Greenway, director of the Center for National Defense at The Heritage Foundation, says of the U.S. defense industrial base.  Instead of producing all of our defense materials at home, the U.S. has outsourced some military production, but “there are some things we don't want in the hands of our adversaries, and there's some things, many things, we don't want under their control or influence,” Greenway says.  Foreign production of defense materials is not only a risk from a national security perspective, it also takes economic opportunities away from the U.S., says Richard Stern, director of the Center for the Federal Budget at The Heritage Foundation. “When we're talking about what's good for the defense industrial base, we're also talking about what builds high-quality, high-paying jobs in the US, what allows the U.S. to be the most productive and advanced country on the planet,” Stern says.  Greenway and Stern recently traveled to Texas, one of the few states that have managed to build up strong military production capabilities. The Lone Star State, according to the research experts, can and should serve as a model for expanding defense production across America. Greenway and Stern join “The Daily Signal Podcast” to explain why the defense industrial base is so critical to U.S. military strength, and how increased production will serve all Americans through economic stimulation. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the DailySitville podcast for Friday, September 6th. I'm Virginia Allen. The U.S. has a big problem. Our military strength is not what it once was. And in large part, this is due to a weak defense industrial base. The military can only be as strong as the defense industrial base. But the government has put up a lot of barriers like red tape that have stifled that defense material production. Robert Greenway is a former member of the National Security Council and currently serves as Director of the Center for National Defense at the Heritage Foundation, and Richard Stern is the director of the Grover M. Herman Center for the Federal Budget at the Heritage Foundation. They both recently traveled to Texas to look at a model for how defense production can be done

efficiently and how veterans can be the ones who are creating those materials that serve our military on the front lines. They join us here on the show today to not only discuss the problem of a weak defense industrial, base, but what Texas is doing and how that model can be repeated across the states to strengthen our military. Stay tuned for my conversation with Robert Greenway and Richard Stern after this. This is Rob Lewy from The Daily Signal. In today's media landscape, it's more important than ever to have a trusted source of news and conservative commentary. That's why we are asking for your support. Your donation helps us continue our mission of delivering accurate, factual reporting on the issues that matter most to you. Whether it's $5 or $500, every contribution makes a difference.

Visit dailysignal.com slash donate to help us keep Americans informed and fight for conservative values. The Daily Signal is your voice for the truth. Well, I'm so pleased that we have with us now, Robert Greenway and Richard Stern. Gentlemen, thank you so much for being here. Always a pleasure. Thanks for having us. Yes, definitely. Thank you for having us on. Well, Rob, as we jump into this conversation about the U.S. defense industrial base, I'm wondering if you can just share essentially what is that and why is it important and why is it so closely tied to U.S. military strength? So it's a great question. In essence, the defense industrial base is our capacity to build the things, ships, the planes, the tanks, the weapons and the ammunition required to sustain and maintain the world's, most elite military organization to protect and defend American interests at home and abroad. And that industrial capacity was central to us achieving the strength that we now enjoy, and it's

going to be critical. Unfortunately, like the armed services themselves, they have been neglected. And so we have had to outshore some of that capacity. And our goal, I think, is to be able to chart a path to get that back in the United States so that we can have the economic growth that's associated with it and the benefits they're in. And also to restore the strength of the United States military. And Rob, why not outsource that production of those goods? Well, there are some things we don't want in the hands of our adversaries, and there's some things, many things we don't want under their control or influence.

And so the degree to which any of these capabilities in these commodities are created or manufacture abroad, they're more vulnerable. Now, there's a market forces at work, and I'll let Richard talk to those. But in the end, there are some things that are so critical that we must, we must. must maintain the capacity to produce them ourselves and ensure that they're within the United States hands or certainly within those of our partners and allies, not our adversaries and certainly not within their reach. Richard, what is that effect on the U.S. economy when either when we are producing our own

defense mechanisms here in the U.S. or when we're outsourcing, what's the effect? Absolutely. So I think piggybacking off of what Rob's point was there, you know, the economy is ultimately about production. The money is only as good as a stuff you can get your hands on for, right? The money can be printed by the Federal Reserve, unfortunately, but, you know, it isn't a roof over you had. It isn't the clothes on your back. And I think Rob makes a great point there, right, which is, you think through U.S. history,

we led the world back to freedom in World War I and World War II. We were only able to do that. In fact, both of those wars we walked into with some of the smallest kind of most backward militaries of the major powers on the planet. But we won those wars because we could be the arsenal of democracy. What was that a reference to our raw industrial capacity to produce those things? The U.S. had something like half of the world's manufacturing capacity at the end of World War II. And that's manufacturing across the board. But it gives you that kind of sense of the backbone, the strength of any economy, is that ability to produce things.

And of course, from that comes technology, innovation, the invention of all of those things that not just good for defending the country and our allies and our principles, but are good for ensuring that everybody as a good quality of life can put food on their table. And so, you know, I think that's one of those things that's important here is when we're talking about what's good for the defense industry base. We're also talking about what builds high quality, high-paying jobs in the U.S., what allows the U.S. to be the most productive and advanced country on the planet and what will allow the U.S. to keep that edge for generations to come. I think a big question as you're talking is the what happened. How did we go from being so on point with this and producing

so much in World War II and the Cold War to where we are now? I'm sure you can both speak to that. I'll let you all jump in. Yeah. I think the first sense says, you know, long before China or a lot of other enemies we think of today decided to destroy the United States, the EPA and the radical left did. And so, you know, we've seen here as decades of crushing tax policy, of crushing regulatory policy that is quite literally put spotted owls and the prairie sage grass. I won't get into what that is. You don't want to know. Over the livelihoods of middle and low-income American workers and over the economic

and health and industrial vitality of the entire country. You know, I think an important stat on this one, right, is, you know, when World War II started, the U.S. was producing 70% not just of the crude oil coming out of the ground, but the refined gasoline, right? We had similar levels of production of all the automobiles on the planet, which is part of why we were able to immediately pivot to producing tanks and troop carriers and things like that and have the fuel for them and the largest Air Force on the planet. Interesting similar stat on that, of course, you could think of computer chips as being similar to oil today when you think through how missiles work and all these other systems.

the U.S. only produces 12% of all of the semiconductors, all the computer chips produced on the planet today, only 12%. And part of that is this story of crushing regs and tax policies, things that have not just made it easier to go abroad, but have begged producers to go abroad and build factories anywhere but the United States. So in other words, government red tape has, and regulations have killed that desire of American producers to actually even want to produce in the United States? Or even the ability to, let alone the desire. But yes. Wow. Wow. Rob, anything you would add to that? Yeah, Richard said it brilliantly. The only thing I would add is, since the end of the Cold War against the Soviet Union, there was a widespread belief that we no longer needed to make the continued

investment in our national security generally, in our defense specifically. And not just the United States, but our partners and allies. And so defense spending radically dropped and has been dropping ever since. The problem is threats from the now Russia, formerly the Soviet Union and the People's Republic of China, first and foremost, as well as other countries like Iran and North Korea, are now making it impossible for us to ignore. And so we've got to reverse that trend. And that investment begins with restoring the industrial capacity, which is also good for our economic growth and health and vitality. but it's also critical for the defense industrial basis. So we've got to change.

That's part of the reason we went to Central Texas last week. Yeah, talk if you would a little bit about that trip. You went down to Texas to see, okay, what is working as it relates to producing the goods and the materials in order to strengthen our military? Rob, what did you all find down there? Yeah, it was a really productive trip. Getting outside of Washington, I think, is always time well spent and looking at the success in Central Texas at the intersection of economic growth.

education, workforce policies, and of course, national security in the form of the defense industrial base, specifically the semiconductor industry, but not alone. So we went there and toured facilities at Tokyo Electron where they're making the equipment that goes into Samsung's facilities, both in Austin and now in Taylor, Texas. We also talked to the workforce and education development teams at state and local levels where vocational re-skilling and upskilling is taking place. And that's critical, obviously, if you want to to staff these facilities. And then as Richard can elaborate, we looked at what the policy recipe was that made for this success and how can it be replicated elsewhere. And just one other thing.

As is the case in many parts of the United States, there's large military installations in Texas. And in this case, Fort Cavasso's formerly Fort Hood, a lot of the veterans separating from service they are looking for jobs. They have the unique attributes and skills necessary for workforce employment. And there's a number of programs and institutions dedicated to retraining and training these veterans for placement in the industries that we just talked about. And so Texas State Technical College, Austin Community College, and programs like Stars, Taps and Skill Bridge and the GI Bill are being used to get our veterans into these jobs. And that obviously has as myriad benefits across the board. So tremendous success. And we worked with Representative Judge Carter from Texas 31,

who has been at the forefront of ensuring that we've got no policy obstacles to allow this sort of economic growth to occur and to get veterans into those critical jobs. Is it a model that can be duplicated? They're doing it well in Texas, not only that production side, but getting those veterans into those job positions, creating that pipeline. Do they have a secret sauce for how this can be done elsewhere? Well, Richard can elaborate on some of the obstacles and impediments there, but I think what Texas has found that leadership at the federal, state, and local levels, all of them are committed to one work together, which doesn't happen organically, as you know, and two, are committed to the

outcome, which is the development of the infrastructure necessary to support industrial growth, and to get the workforce trained in order to do it. We've been spending a lot of money in the United States, state and federal money towards four-year college degree granting institutions. And that's come at the expense of workforce training. And so a lot of retooling, I think has to be done. And a lot of healthy introspection is required to re-apportion those resources so that we can get the workforce we need. Not everybody's made to fit or wants to be in a cubicle, but I think a lot of people want

to be on the work floor making things with their own two hands. An industry requires it. And so I think what we've seen in Texas is a commitment at every level to make this happen, in spite of the many obstacles which are often present. But a commitment to collaboration, public and private at all levels has been successful there. And that's what we went to look at in central Texas and see what could be replicated. But Richard, I think, can elaborate in even greater detail. Yeah, Richard, if you would, talk about how this can be duplicated.

No, of course, thanks. And I think to Rob's excellent point on that, you know, so Congressman Carter and his great staff spent the time to organize this, to tour us through to make sure that we could talk to these community and state leaders who have been putting this model together. And I think, you know, for this audience and as conservatives, no surprise that we would think that Texas and the people of Texas are leading the way showing a vision back to the kind of productive American dynamism that we always talk about in the history books of the country. But, you know, I think part of what was on display in Texas, and frankly, true to Texas's history the whole way through, is you have federal policies that have crushed that spirit, that have

tried very intentionally to destroy that kind of beautiful organic creation that comes out of the market system. And here you have Texas fighting back, fighting to keep their culture, to restore that American dynamism, things that the Tokeville talked about when he came in the 1840s and toward America. So, you know, part of what we were seeing there was that. You know, I always stress as you know, but the federal government is actually one of the largest banks in the country. Of course, they cheat, they print the money, but they make trillions of dollars available for things that are favored by DC politicians. So they're not there to be productive. They're not things that help build the country.

And as we were just talking about, as Rob pointed out beautifully, the government has made an enormous amount of money available if you want to go get a four-year degree. Now, a lot of those are useful. I mean, and certainly you can go get a degree in engineering and go get a job in one of these plants. And there are all kinds of other degrees that are useful. I got a degree in economics. I'm told that's useful at times. But we all know a lot of that money goes to things that are basically akin to. to gender fluid basket weaving degrees. And while the government is stealing money from hardworking

Americans to induce other people to get degrees that are worthless, to take on student debt they can't pay for, if you want to take that money and go learn how to weld, there's not a lot of money available. If you're an employer and you want to have an apprenticeship program, there's not money available. In fact, if you are an employer, so these companies we were talking to, if you want to put your own money on the table to pay for worker training, guess what? It's mostly treated as income to the worker and taxed as income to the worker under income taxes and payroll taxes. A massive tax barrier that you only see quite literally when an actual company wants to spend their hard-earned money to train somebody to do an actual job that promotes, you know, produces something of that

to the rest of the community. A barrier you don't see on government-run schools, you don't see on government dollars. So, you know, what we saw in Texas, right, is this work for both the private and the public sector there to undo the tidal wave of this federal pressure to waste resources on things that are not productive. Yeah. In other words, there needs to be a motivation to actually get people into these jobs because, as you all have explained, there is a shortage there of actual hands to do the work. What are the top few skill sets needed? Is it welders? I mean, if we're putting people into those practical training programs, what is the main shortage? Well, what I'd say is it's actually, it's probably dozens of kind of individual jobs, if you think,

through this. But, you know, when we were there, you know, they spent time showing us actually a lot of these things of doing. And someone's welding, but it's also just machine shop work. It's work producing dye molds and carving materials that you make molds around. We saw elaborate circuit boards where people are walking through industrial software where you have tens of millions of dollars of machinery that all have to work together, how you operate the software systems that tell you that the machines are working properly or not. You know, it's things like that. Again, it's not a lot of this is something that there isn't and it wouldn't make sense, frankly, to have some four-year college degree do it.

It makes more sense to find an employer, have them show you that precise thing, and frankly, have those employers be able to decide, you know, we need five more people over here, we need 10 more people over there. It's not something at college or the federal government, surely, can make that kind of nuanced practical decision-making on. And, you know, I would say this as well, right, a lot of the countries who manufacture more than us, at least proportionately, who have been in this game a lot longer, they have larger governments, in some ways they have worse regulations. But you know what they don't have,

they don't have regulations and tax policy that is aggressively antagonistic to private work to produce things and to train people and find people good employment. So while I might gripe about the size of their governments and their interventions in the economy, they are at least done with proper intentions. I think one of the most damning things, frankly, that was on full display there, was just how much federal policy is not just large and reckless and intrusive, but is intentionally antagonistic. It has been largely been put into place by politicians who loathe the private sector, who loathe innovation, who loat the manufacturing. And that is part of why we're in the process we are in as this country. That's part of we want the Texas to see how to undo.

So, Rob, what is the path forward? Well, I think a number of things. Now that we've seen what works, our job, I think, is to identify that policy recipe that reduces obstacles and impediments as Richard identified, but also shows and displays in hard numbers what the economic growth and potential is, both from just straight up economic basis, but also from the national security enterprise and the defense industrial base to help show and highlight examples of what works and why and be able to make the recommendations for federal, state, and local levels to model what's been done in Central Texas and to make the argument themselves, equipping them with the facts necessary to do so and showing them that success is possible. Despite the impediments, these things were done,

they can be undone. And they have to be for us and for local communities to restore that economic vitality and the defense industrial base at the same time. And conservative policies correctly applied can produce the same results. And our job, I think, is to advocate for those and to recommend the solutions so they can be applied. And in the end, I think, this, can and does show what can be achieved when state, federal, local governments work with private enterprise to align the workforce to industry and everyone benefits as a result of it. And our national security does as well. And I think that's our job is to advocate for example, our programs like we saw in central Texas to be applied at different areas of the country for the greater good.

What's the main opposition that repeating what is happening in Texas is going to face across the country. Who's going to be throwing those yellow and red flags and saying, well, we can't do this because X, Y, and Z? Well, you know, I'll tell you for sure. And I run into this all the time in the broader tax and regulatory space. You know, you have people, this is going on right now with tax proposals put up by Project 2025 and, you know, boilerplate conservative policies. Right now you have all these people that go out in public and say, they're trying to kill off endangered animals or they're just trying to have tax cuts for the wealthy, for the, you know, the maligned shareholders of these companies. But, you know, what's going on here is you're looking

at people who, frankly, I think, get a sense of purpose from injecting themselves into a story where they see themselves as a hero fighting for people that they perceive to be oppressed. And the reality, all they're doing is fighting against efforts to give people good paying jobs, to produce the products that are enrich everybody's lives. You know, I think it's an interesting example here. And there's one part of this, right? The production of lumber products in the United States is up 10%, only 10%, since the EPA was created a half century ago.

The U.S. population is up 70%. The number of households is almost doubled. You want to know why house prices are so expensive. That's partly why, right? because we have made it next to impossible to produce those basic components. And that's just two by four isn't plywood to go into housing. Now think about this, right? Rob and I were able to see this brand new plant that they're working on in Tyler, Texas,

Samson, billions of dollars in investment. Now, this was a field that they bought through money they had hard earned, that they are putting all of this work into, that these liberal groups we talk about will pick up the phone, call a lawyer of Manhattan and get legal action against the site. Why? Because maybe there's some animal that could possibly live on this field somewhere. And because of that, billions of dollars of investment get shuttered. Construction companies who put everything they had, risking their livelihoods in working on this project, now have to sit there on their equipment waiting for a lawyer

or Manhattan to decide their fate. And it means that we don't have these computer chips, whether it's for hospital equipment that would save Americans' lives or to be put into missiles that defend America, this is what happens. And so I think these are people who think they're doing the right thing. And I genuinely believe that they think that, but they haven't stepped on the ground. They haven't seen what's going on. And frankly, they haven't done the homework to understand the reality of how many people they're harming and what the outcomes are from the processes that they go through. Rob will give you the last word. Any final thoughts? All of what Richard said is 100% true.

What we saw in central Texas is working, and it can work in other places. There are obstacles and impediments to it, but if we succeed in replicating what Texas, Central Texas, in particular, is done, we can see the convergence of economic growth and opportunity for Americans. We can see educational workforce changes and adjustments made to supply not just a defense industrial base, but industry and manufacturing in general. And as a result of it, restore our defense. industrial base and our national security. All of these things intersect. All of them did in central Texas. Our hope is that we can work with those that we saw on the ground there and replicate that

success elsewhere. It's sound conservative principles restoring positive economic growth and prosperity. Gentlemen, thank you both so much. Really appreciate your time today. I do want to take just a second here and ask you about a piece of current event news. And that is over the weekend. And tragically, we learned that there were six Israeli hostages who were killed. One, an American Israeli Hirsch Goldberg, they were found in one of the Hamas tunnels. And obviously, very, very emotional response from this, strong feelings, both for Americans, for Israelis. Rob, let me come to you first.

What do we know about the death of these six hostages? So while hostage negotiations were taking place presumably in Cairo, and the IDF, the Israeli defense forces, were making progress towards a tunnel where hostages were believed to have been kept and they ultimately turned out to be accurate because they recovered the bodies of six hostages that were executed prior to their rescue. And this happened again while hostage negotiations were taking place. They were acting under orders that rather than allow the rescue of hostages, they were to be executed. includes, as you mentioned, a rather well-known and unfortunate ending of the case of Hirsch, Goldberg, Poland. And so he, as an American, joins the list of the most recently deceased and killed, executed brutally by Hamas terrorists. This resulted and caused a number of reactions. First, unfortunately, condemnation against Israel, paradoxically, the United Kingdom, for reasons known only to that,

decided to impose restrictions on 30 different munitions being exported by the United Kingdom to Israel. And again, the United States in the form of the current administration is blaming the Netanyahu government for being an obstacle to successful negotiations when the opposite is true. Hamas has rejected all ceasefire proposals to this point. Israel is not the obstacle that the terrorists of Hamas are. And ultimately, the negotiation process mutters along, but is unlikely to achieve an outcome because they are trying to obtain their survival. They're trying to ensure their survival.

And Israel's job, of course, naturally is to prevent a recurrence of the horrific attacks of October the 7th, re-echoed again as recently as this weekend. At the same time, we saw now two additional ships attacked in the Red Sea, causing an environmental disaster, and further disrupting global energy and trade markets impacting American commodity prices and inflation. And all of this to take place while, again, we're trying to reshaping. restored deterrence in the region, having experienced seven U.S. American casualties just three weeks ago by Iranian-sponsored attacks in Iraq and Syria. And the United States has not responded to any of these and not imposed costs, despite an American being brutally executed in a tunnel in Rafah over the weekend. All we've done is constrain Israel as opposed to blaming those responsible, which is Hamas and the Iranian

sponsors. Richard, I know that this is an issue that you're very passionate about. Are there ways that the U.S. can really exert pressure on Iran, on Hamas right now. Is there a way to do that financially, or do we need something much, much stronger than that? Well, what I would say is there are definitely ways to do it financially, but I would certainly support much stronger ways as well. And, you know, I appreciate you raising the issue and asking the question on it. You know, I'll tell you this, right? I mean, obviously, and I think to Rob's point in this, what we watched was the brutal murder of innocent people, people who have been wrapped up in something that, that they had no party to and that they had done nothing wrong to anybody on.

We watched her as a crime, plain and simple. And I think the other crime that's happened here, and I really do think it's a crime, is for nearly four years. We've watched an administration who not only does not expouse our values, does not care about our values, but actively aids those who do not believe in our values and aids them to the point of murdering Americans and murdering allies of the United States as well. Make no mistake. while this was happening X, formerly Twitter, was banned in Brazil for helping people there to

deal with an oppressive government that's violating their constitution. What we are seeing globally is liberty on retreat, is traditional Jewish and Christian values that center around a God that gave us free will on retreat, violently on retreat. And so, you know, I think the important thing here, and I think for all of us watching is, you know, at the same time that the UK is condemned, Israel, there are gains running around the UK who are migrants, who are brought there from the same part of the world, who do not share Western values, who are running around the country, quite literally raping and murdering people. There are studies in Sweden that projecting by the end of the decade that one in four women there will have been raped or sexually assaulted by these same

migrants. So, you know, my own view in this, right, is there are, of course, all manner of sanctions and other things that can happen. But it is, if government is going to exist at all, and you know and your listeners know, I'm usually not a fan of government, I usually think it steals some people. But the one job of a government is to enforce the rule of law and to keep us safe. And frankly, what we have been seen is Western governments failing that most basic task in duty of a government. It's time for that to stop in my way. Richard Stern, Robert Greenway. Thank you both for your time. Greatly appreciate it. Always a pleasure. Thank you.

Thank you. And with that, that's going to do it for today's episode. Thanks so much for joining us here on the Daily Civil Podcast. Be sure to hit that subscribe button so you never miss out on new shows from the Daily Civil, whether our morning interview edition or our afternoon, Top News. We'll see you right back here around 5 p.m. for the headlines that you don't want to miss on Top News. The Daily Signal podcast is made possible because of listeners like you. Executive producers are Rob Louis and Katrina Trinko.

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