Thursday, August 25, 2005

Base Closings (BRAC) : Rumsfeld's Real Estate Deal

Sec. Rumsfeld wants to close or downsize 800 military bases in 50 states. He says this will save $ 2.5 billion per year. That is an insignificant amount when one looks at the FY 2006 Defense budget of $ 600 billion-less than 1/2 %. Iraq and Afhganistan cost over $ 6 billion in ONE MONTH. Communities around the nation are going to lose a significant amount of business. The military payroll alone will be reduced by 26,000 people. The private business's that serve those bases will suffer proportionatley and will have to downsize also. In Keynesian terms, all those bases were net winners for local communities and the federal tax roles. The so-called savings turns out to be a loser in the bigger picture.

Strategically closing the bases seems to go againt the Homeland Security mission. Those bases are logistically and psychologically valuable. Opening inflammatory occupying bases in the Middle East and closing homeland response strike bases in the US doesn't make sense.

So base closings don't make sense in net economic or a military sense. Maybe the real reason for the closures have nothing to do with US efficiency or security. Suppose the real reason is the greatest transfer of wealth since the Indians sold Manhattan for some trinkets. Here is how it would work. After the bases are closed, the prime real estate would be sold to politically connected- investors at " fair market value". " Fair market value" in government terms always ends up being below market prices and only insiders know the price and terms.

In my state of California a few years ago, Sen. Diane Feinstein and her money-grubbing husband Dick Blum almost sold the Naval facility at Long Beach to the Chinese- Blum would have got a commission. Only when the public became aware of the pending deal was it killed. Sen Barbara Boxer, our other Senator kept silent during the whole scheme.

Feinstein, Blum, Madeline Albright, George I and Frank Carlucci of Carlyle Group and other major players in the windfall of Iraq and Afghanistan contracts will certainly take part in this new legal swindle.

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