1. Donald H. Rumsfeld, “DoD Acquisition and Logistics Excellence Week Kickoff—Bureaucracy to Battlefield Remarks”, Speech at the Pentagon, Sept. 10, 2001. & U.S. Department of Defense, Office of the Inspector General, “Audit Report: Internal Controls and Compliance with Laws and Regulations for the DoD Agency-Wide Financial Statements for FY 1999”, (Report No. D-2000-091), Feb. 25, 2000.

2. U.S. Department of Commerce, Survey of Current Business, Sept. 2002, Table 5, p. 30.

3. Charles E. Wilson, “For the Common Defense, A Plea for a Continuing Program of Industrial Preparedness,” Army Ordnance, Vol. XVI, No. 143, March-April, 1944. See other discussions of Wilson’s proposals in: John M. Swomley Jr., “The Growing Power of the Military,” The Progressive, Jan. 1959. See also Walter J. Oakes, “Toward a Permanent War Economy,” Politics, Feb. 1944.

4. Address by President Dwight D. Eisenhower, “The Chance for Peace”, April 16, 1953.

5. New York Post, Dec. 16, 2003; Atlanta Journal-Constitution, May 7, 2002; Daily News of Los Angeles, Jan. 16, 2003; Cincinnati Enquirer, Oct. 31, 2002; San Diego Union-Tribune, Feb. 22, 2003; San Francisco Chronicle, June 2, 2003; The Bond Buyer, Aug. 1, 2002 [Chicago]; Houston Chronicle, Apr. 6, 2003; The Bond Buyer, Jan. 5, 2004 [Philadelphia].



1. U.S.Census Bureau, Current Housing Reports, Series H150/01, American Housing Survey for the United States:2001, Washington,DC, 2002. Table 2-7, p. 56.

2. U.S. Department of Agriculture, Household Food Security in the United States, 2002, Food Assistance and Nutrition Research Report No. 35, Washington, D.C., 2003. Table 1, p. 7.

3. US Census Bureau, American Community Survey, Ranking Tables: 2002, Percent of People Below Poverty Level.

4. Urban Institute, A New Look at Homelessness in America. Feb, 2000.

5. US Census Bureau, Current Population Reports, Health Insurance Coverage: 2001. Washington, D.C., 2002.

6. Philadelphia Inquirer, “Getting medical coverage to all”, March 13, 2003.

7. Rebuild America’s Schools. 

8. Association for Manufacturing Technology, The Economic Handbook of the Machine Tool Industry, 2003-2004.

9. Federal Highway Administration, Traffic Congestion Factoids:

10. Tom Riddell, “The $676 Billion Quagmire,” The Progressive, October 1973.

11. Senator Robert C. Byrd, Putting the President’s $87 Billion for Iraq in Context, September 29, 2003. 

12. Department of Defense, Office of the Under Secretary of Defense, National Defense Budget Estimates For FY 2004 , March 2003. Table 1-5, (Figure used is Procurement + RDT&E)

13. Ernest Fitzgerald, The Pentagonists, (Houghton Mifflin, 1989), pp 213-214.

14. Center for Defense Information, CDI Weekly, Vol. 7, Issue #1, Jan. 9, 2003 and F-22 Fact Sheet. &

15. Senator Robert C. Byrd, The Growing Cost of America’s International Arrogance, September 5, 2003

16. National Science Board, Science and Engineering Indicators 2002, Table 6-9. & U.S. Census Bureau, Annual Survey of Manufactures, 2001, Table 1.

17. AFL-CIO Housing Investment Trust, 2002 Annual Report, p2.

18. SAR = DoD Selected Acquisition Report, Summary Tables, Sept. 30, 2002:  & PAC = DoD Program Acquisition Costs By Weapon System, Feb. 2002:

19. Union of Concerned Scientists, “Renewing Where We Live” 

20. American Society of Civil Engineers “Report Card for America’s Infrastructure: Drinking Water”:

21. Federal Highway Administration “2002 Status of the Nation’s Highways, Bridges, and Transit” :

22. Association Of State Dam Safety Officials, “Testimony before the Subcommittee on Veterans Affairs, HUD and Independent Agencies, Committee on Appropriations, U.S. House of Representatives” , April 16, 2002:

23. John E. Ullmann, Engineering estimate.

24. “Price of Safe Water for All: $10 Billion and the Will to Provide It” New York Times, Nov 23, 2000.

25. “China Tests German-Made Fast Train; Deal Awarded” New York Times, January 1, 2003

26. Rebecca Sayre, Union Of Concerned Scientists; see also UCS, “Clean Vehicles”:

27. Administration for Children & Families, “Head Start Program Fact Sheet, FY 2002”:

28. Global Plan to Stop TB Phase 1: 2001 to 2005, page 15.

29. National Education Association, Schools in Need :

30. George Runner, “California Needs to Compete for Key Military Jet Contract,” Los Angeles Times, Nov. 2, 1997.

31. US Dept of Labor, Bureau of Labor Statistics. Occupation Projections and Training Data, 2002-3

32. Cited in I. F. Stone’s Weekly, May 10, 1965.

33. Franklin C. Spinney, Statement Before The Subcommittee On National Security, Veterans Affairs And International Relations, Committee On Government Reform United States House Of Representatives, June 4, 2002.

34. “Tax Questions For Military’s Contractors”, New York Times, Feb. 12, 2004.

35. Common Cause, “An Expensive Bill, Cheap Talk”, November 6, 2003.

36. Franklin C. Spinney, “The Real Cost Of Spending 1% More Of GDP On Defense”, Defense Week, Sept. 5, 2000.

37. National Defense Budget Estimates For FY 2001, Table 6-10;. & Bureau of Economic Analysis, National Economic Accounts, Fixed Assets Tables, Table 1.1 [Current-Cost Net Stock of Fixed Assets and Consumer Durable Goods],

38. S. Melman, After Capitalism, (Alfred A. Knopf, 2001) pp. 99-100.

39. D. Irving, The Destruction of Dresden, (Holt, Rinehart & Winston, 1964). Compare the photographs of bombed Dresden with those of Hiroshima and Nagasaki.

40. Christopher E. Paine, “Countering Proliferation or Compounding It?”, (Natural Resources Defense Council, May 2003), Table 1, p. 18.

41. Ibid. Figure 5, p. 11.

42. Ibid. p. v.

43. R. McNamara, The Essence of Security, (Harper, 1968); A. Enthoven and W. Smith, How Much is Enough?, (Harper and Row, 1971).

44. On the idea of “control” as seen by statisticians: W. A. Shewhart, Economic Control of Quality of Manufactured Product, (D. Van Nostrand, 1931), Chapters 1, 2; L. H. C. Tippett, Technological Applications of Statistics, (Williams and Norgate, 1950); on the developing literature, Journal of Quality Technology; on the idea of control of complex industrial systems, see S. B. Littauer, “Technological Stability,” Transactions of the New York Academy of Sciences, 1950.

45. Cited in A. E. Fitzgerald, The High Priests of Waste, (Norton, 1972),      p. 35.

46. U.S. Census, 1992 Census Of Manufactures: General Summary, Table A; Final Reports, Industry Series: 34E, 37A &37C, Table 5a.

47. S. Melman, “The Rise of Administrative Overhead in the Manufacturing Industries of the United States, 1899-1947,” Oxford Economic Papers, 1950.

48. A scientist once employed in defense industry has reported the following:

“When I left government my DoD [Defense Department] clearance followed me in a matter of days to a few weeks. I also happened to need AEC clearance. This took nine months and had to be done twice because after the investigation was completed it was found that for one or two years during the war the investigation had been made by Army Intelligence instead of by the FBI, and AEC rules had been changed to require that everything be done by the FBI. So the whole business started all over again, doubling the time and expense and involving the FBI people going back to the same people they had talked to earlier and shamefacedly asking them the same questions.”

49. Business Week, July 17, 1971.

50. Comment by Congressman Aspin in New York Times, Aug. 29, 1972.

51. Seymour Melman, The Permanent War Economy, (Simon & Schuster, 1985) p. 44-45. & H. Romaine, “Henry Durham: People Threatened to Kill Me If I Testified,” Earth, Oct. 1971.

52. New York Times, Dec. 6, 2003.

53. S. Melman, Pentagon Capitalism, (Mcgraw-Hill, 1970), Chaps. 2-4.

54. Emergency Loan Guarantee Legislation.



1. International A.N.S.W.E.R., “A Century of U.S. Military Interventions”.

2. Vietnam: The Definitive Documentation of Human Decisions, ed. Gareth Porter (E.M. Coleman, 1979), vol. 1, p. 95. This volume contains the full text of the February 16, 1946 letter by Ho Chi Minh.

3. “Iraq Said to Have Tried to Reach Last-Minute Deal to Avert War”, New York Times, November 6, 2003.

4. Idem. See also, Seymour M. Hersh, Chain of Command 175-6.

5. S. Melman, Pentagon Capitalism, pp. 143-144.

6. New York Times, Jan. 8, 2002.

7. “Footprints In Steppes Of Central Asia”, Washington Post, Feb 9, 2002. 

8. Digital Globe, June 13, 2002:

9. National Public Radio, “Morning Edition”, November 7, 2003

10. Idem.

11. “Pentagon’s Request for Iraq Includes Money for Troops and Rewards”, New York Times, October 5, 2003.

12. S. Melman, Pentagon Capitalism, (McGraw-Hill, 1970), Chapter 6, in Permanent War Economy, p. 170.

13. In February 1973 we learned of the resurgence of guerrilla operations in the Philippines. The New York Times (March 26, 1973) reported: “The military situation bears a striking resemblance to the early day of Vietnam. The guerrillas roam freely through the countryside, with support from local villagers, and with a vast intelligence network connected by runners and walkie-talkies. The army, a replica of the United States military forces, and with all American equipment, uses conventional tactics.”

14. N. Chomsky in his important volume For Reasons of State, (Pantheon Books, 1973), pp. 84-86, has defined with exacting detail the mechanism whereby the destruction of the NLF-supporting population base became an explicit military objective of the United States.

15. S. Melman, Pentagon Capitalism (McGraw-Hill, 1970) p. 142.

16. New York Times, “Insurgents Use Rockets on Donkey Carts to Hit Sites in Iraqi Capital”, November 22, 2003.

17. Sara Corbett, “The Permanent Scars of Iraq”, New York Times Magazine, Feb. 15, 2004.



1. Since 1986, I have been a fairly close observer of departure of industrial firms and facilities from the United States to foreign locations. While I can’t say how many such events I took note of, I am fairly sure of one characteristic: in no single case did the proprietors of an industrial enterprise claim that they were making the move outside the United States, that is, “outsourcing” in order to save the profitability of their enterprise. In every instance that came to my attention the management indicated that the removal from the U.S. to a foreign location was to serve the goal of greater profitability. I underscore this consideration because during the last two years I have watched numerous processes of deindustrialization in the United States – and as reported in the trade and general press – and in no single instance was there a claim that the move was done in the service of retaining profitability. In every instance it was announced as serving the cause of greater profitability and capital accumulation.

2. The domestic production data are contained in : U.S. Census Bureau, Annual Survey of Manufactures, Value of Product Shipments: 2001, Washington, D.C., 2003. The data on imports and exports is contained in: United States International Trade Commission (USITC), Trade Dataweb, U.S. General Imports, U.S. Total Exports.

From these two sets of data, it is possible to calculate the percent of the U.S. market served by imports. Shipments data for Apparel and Leather from U.S. Census, Manufacturing, Mining and Construction Statistics, “NAICS Historic Timeseries”, Shipments Table: . NAICS Codes for: Machine Tools (Cutting): 333512; Machine Tools (Forming): 333513; Automobiles: 336111; Iron & Steel: 331111; Farm Machinery: 333111; Construction Machinery: 333120; Mining Machinery: 333131; Oil & Gas Machinery: 333132; Textile Machinery: 333292; Semiconductor Machinery: 333295; Office Machinery: 333313; Computers & Peripherals: 334111, 334112, 334119; Broadcasting & Wireless: 334220; Audio & Video: 334310; Semiconductors: 334413; Electromedical Aparatus: 334510; Apparel: 315; Leather Goods: 316.

3. Seymour Melman, Our Depleted Society (Holt, Rinehart & Windston, 1965)

4. For a review of the development of the post-industrial line of argument see: Daniel Bell, The Coming of Post-Industrial Society, (Basic Books, 1973), pp. 36, 37, 461, 462.

5. “Exporting America: The List”, Lou Dobbs Tonight,

6. International Herald Tribune, “Mazda net doubles as sales surge in Europe”, Nov. 6, 2003

7. These contrasting data on the Mazda and Chrysler firms, together with comments by Japanese and American observers, were broadcast by CBS Evening News on April 30, 1981.

8. Gretchen Morgenson, “Explaining (or Not) Why the Boss Is Paid So Much”, New York Times, Jan. 25, 2004.

9. Idem.

10. “China Isn’t Hijacking Jobs: Blame multinationals and a savings-short U.S.”, Business Week, Oct. 6, 2003.

11. New York Times, “House of Gas”, Oct. 26, 2003.

12. New York Times, “Bubble Beneficiaries” Aug. 25, 2002.

13. U.S. Census Bureau, Money Income In The United States: 2000, (Washington, D.C., Sept. 2001). Cat#P60-213, Fig. 4, p. 11.

14. Annual Survey of Manufactures, Value of Product Shipments, 2001. & USITC, Trade Dataweb, NAICS code 336111.

15. Jane Slaughter, “Auto Union Embraces Two-Tier Wages” Labor Notes, October 2003.

16. U.S. Bureau of Labor Statistics, Hourly Compensation Costs For Production Workers In Manufacturing, 30 Countries Or Areas, 40 Manufacturing Industries, Selected Years, 1975-2001. Aug. 2003, p. 118,

17. USITC, Trade Dataweb. U.S. General Imports, NAIC Code 336111.

18. National Machine Tool Builders Association, Economic Handbook of the Machine Tool Industry, 1980/81, p. 250.

19. Michael Boretsky, U.S. Technology: Trends and Policy Issues, U.S. Department of Commerce, Oct. 1973, Table 21.

20. Special Calculation by Dr. Greg Bischak, Senior Economist, Appalachian Regional Commission.

21. Sebastian B. Littauer, “Stability of Production Rates as a Determinant of Industrial Productivity Levels,” Proceedings of the Business and Economics Statistics Section, American Statistical Association, Sept. 10-13, 1954.

22. Seymour Melman, Decision-Making and Productivity (John Wiley, 1958).

23. Decision-Making and Productivity p. 114.

24. Ibid., ch. 10. The management policies of Standard changed with mergers into Leyland and British Motors, and the sale of the tractor factory to Massey-Ferguson.

25. Association for Manufacturing Technology, The Economic Handbook of the Machine Tool Industry, 2003-2004, pp E3-E4. Unfortunately, the age of machine tools beyond 11 years has not been reported, making it impossible to know the percentage of tools that are truly antiquated, being 20 + years old.

26. Ibid., pp. A-2. and After Capitalism, p. 54.

27. After Capitalism, p. 62.

28. Singer N.V., 2002 Disclosure Statement And Report, (April, 2003), p. 29.

29. Katherine Beck, “Going Global” Boeing Frontiers Online:

30. Business Week, “The New Cold War At Boeing”, February 3, 2003.

31. Mercury News, “Levi Strauss Tightens Belt”, April 9, 2002 & Business Week, “Is It China’s Fault?” Oct. 13, 2003.

32. “As Factory Jobs Vanish, Sweet Talk Could Turn Tough”, New York Times, October 12, 2003.

33. “Layoffs by Carrier Corp. Strike Syracuse in Heart”, New York Times, Oct. 7, 2003.

34. “Greenville vs. Mexico”, Grand Rapids Press, Nov. 23, 2003.

35. Thomas F. O’Boyle, At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit (Alfred A. Knopf, 1998), p. 33.

36. Business Week, “Is Your Job Next?”, pp. 50-60.

37. Why North Carolina? North Carolina is perhaps the only state that has been keeping track of factory closings. While state data is commonly available on employment, the database created and published by the Employment Security Commission of North Carolina, that records details of individual factory closings in their state is truly unique. Their database is compiled from surveys of newspaper accounts of plant closings statewide, and from reports submitted directly to the Employment Security Commission. The fact that this database is such an exception, and that no similar database exists at the national level, means that gauging the extent and pace of deindustrialization, (factory closings) is severely hampered.

38. David Firestone, “A Chief Exporter, and Not at All Pleased About It”, New York Times, Feb. 23, 2001.

39. Bureau of Labor Statistics, State at a Glance, North Carolina: Manufacturing:

40. “A Chief Exporter, and Not at All Pleased About It”.

41. Employment Security Commission of North Carolina, Announced Business Closings and Permanent Layoffs, Note: the data are not comprehensive and do not meet the Labor Market Information Division standards for accuracy. Staff in the Employment Security Commission neither analyze nor evaluate the accuracy of these reports.

42. Idem. Note: This chart of factory closings is compiled from best available data and may understate incidents of factory closings.

43. “As It Tries To Cut Costs, Wall Street Looks To India”, New York Times, Oct. 8, 2003.

44. “Is Your Job Next?”, Business Week, Feb. 3, 2003; “Bracing for the Blow”, New York Times, Dec. 26, 2003.

45. Forester Research as cited in “Is Your Job Next?”, Business Week , Feb. 3, 2003.

46. Rachel Konrad, “American Computer Programmers Face Ultimate Insult: Training Overseas Replacements”, San Francisco Gate, Aug. 10, 2003.

47. “Workers Asked to Train Foreign Replacements” USA Today, April 6, 2004.

48. “As It Tries To Cut Costs, Wall Street Looks To India”, New York Times, Oct. 8, 2003.

49. Ibid.

50. John C. McCarthy, Forrester Research, “3.3 Million US Services Jobs To Go Offshore”, Nov. 11, 2002:,1317,15900,FF.html

51. “As It Tries To Cut Costs, Wall Street Looks To India” New York Times, Oct. 8, 2003.

52. Ian Vasquez and John Welborn, Cato Institute “Reauthorize or Retire the Overseas Private Investment Corporation” Foreign Policy Briefing, 2003.

53. Louis Uchitelle, “A Missing Statistic: U.S. Jobs That Went Overseas,” New York Times, Oct. 5, 2003;

Computer World “State Agency Cancels Controversial Outsourcing Deal”, Nov. 25, 2003. & Tata Consulting Website:

54. “Jobless Count Skips Millions” LA Times, Dec 29, 2003. See also, D. Dembo and Ward Morehouse, “The Underbelly of the U.S. Economy: Joblessness and the Pauperization of Work in America”, Council on International and Public Affairs, (Apex Press, 1997).

55. Robert E. Scott, “The High Price of ‘Free’ Trade”, Economic Policy Institute – Briefing Paper,

56. Keith Bradsher, “Chinese Builders Buy Abroad”, New York Times, Dec. 2, 2003.

57. Ibid.

58. Ibid.



1. U.S. Department of Housing and Urban Development, American Housing Survey, 1998, Washington, D.C. ; AFL-CIO Housing Investment Trust, Annual Reports, 1993-1996, Washington, D.C.; New York Times, Apr. 28, 1998; For Method that produced $369 billion estimated cost for severely depleted U.S. housing, see S. Melman, After Capitalism, (Alfred A. Knopf, 2001) p. 150.

2. John E. Ullmann, “Rail Passenger Woes: ‘No Policy’ As Policy”, Journal of Transportation Law, Logistics and Policy, Summer 2003, V. 70 #4. pp. 442-459.

3. It is not my purpose to argue the preference among the four simulations whose results Dr. Bischak has presented. I do see it as my responsibility to call attention to the maximum possible job gain that can calculably result from implementing the Civil Engineers’ program. I believe that this largest employment addition should be debated in terms of the alternative scenarios that Bischak has presented. There is no magic wand or single universally desirable alternative among the possibilities he has sketched out.

4. One of Wassily Leontief’s basic works is Input-Output Economics, (New York : Oxford University Press, 1986). The Columbia University library includes many studies done by Leontief and others using his methodology in the U.S. and other countries.

5. “Basic Failures by Ohio Utility Set Off Blackout, Report Finds”, New York Times, Nov. 20, 2003.

6. Idem.

7. New York Times, Nov. 19, 2003.

8. “Ignoring a Forest for the Tree Trimming”, New York Times, Nov. 24, 2003.

9. Idem.

10. New York Times, Nov 19, 2003.

11. Ibid., Nov. 24, 2003.

12. Ibid., Nov. 20, 2003.

13. Bureau of Labor Statistics, “International Comparisons of Hourly Compensation Costs For Production Workers In Manufacturing, 2002” USDL: 03-507.

14. New York Times, (International Business), Feb. 17, 2004.

15. “Low-Skilled Jobs: Do They Have To Move?”, Business Week, Feb. 26, 2001.

16. “Retro Trend: New Balance Commits to Increasing Its U.S. Factory Capacity”, Gale Group Business and Industry - FN, April 7, 2003.

17. “Sole Survivors: Why Some U.S. Factories Are Still Making Footwear.”, Gale Group Business and Industry - FN, April 7, 2003.

18. “As Japan Recovers, An Unlikely Source Gets Credit: China”, Wall Street Journal, May 4, 2004.



1. New York Times, June 23, 2004.

2. Economic Policy Institute, “Overtime Rights in Peril”:

3. “Bush signs repeal of workplace safety rules”, USA Today, Mar. 21, 2001.

4. Center For Budget and Policy Priorities, “Poverty Increases And Median Income Declines For Second Consecutive Year”, Sept. 29, 2003:; and U.S. Census, Poverty in the United States: 2002, Sept., 2003.

5. U.S. Census, Historical Income Tables – Households, Sept. 2002, Table H-2:

6. U.S. Department of Agriculture, Household Food Security in the United States, 2002, October 2003, Table 1, p 7.

7. U.S. Conference of Mayors, A Status Report on Hunger and Homelessness in America’s Cities, 2002

8. Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2005 to 2014”, Jan. 2004, Summary Table 1, p. xii.

9. League of Conservation Voters, “2003 Presidential Report Card”, Jan. 2003:

10. Dr. Mnatsakanian is also author of “Nature Protection in Russia, From Gorbachev to Putin” (440 p., in Russian) Full text download available at: 

11. Dr. Ruben A. Mnatsakanian, Environmental Legacy Of The Former Soviet Republics, (Centre for Human Ecology, Edinburgh: Scotland, 1992) .

12. Ibid., pp. 175-182.

13. Rashid Alimov, “Radioactive Waste Threatens Moscow”, Bellona, June 18, 2003:

14. Rashid Alimov, “Radioactive waste to be dumped near Dimitrovgrad’s water wells”, Bellona, Nov. 6, 2002:


Appendix A: National Employment and Income Effects From a Shift in Federal Priorities

1. See ASCE Report Card, Sept. 2003, . Additional estimates of investment needs for low-income housing and railroad electrification were prepared by Seymour Melman and John E. Ullmann.

2. See FY 2005 Historical Tables of the US Government Budget, U.S. GPO, Washington DC, 2004, Table 9.6.

3. REMI Policy Insight, version 5.3. Regional Economic Models Inc., Amherst MA, 01002. See