There is a quote I’ve been reluctant to drop in the last two months even as I’ve been citing a whole lot of history that mirrors what we’re seeing today in everything from arms to food to global logistics.
“We must be the great arsenal of democracy. For us this is an emergency as serious as war itself. We must apply ourselves to our task with the same resolution, the same sense of urgency, the same spirit of patriotism and sacrifice, as we would show were we at war.”
President Franklin Delano Roosevelt’s “fireside chat” may not entirely apply today, but at its heart is the same sentiment and intention we see today.
I will not dive into the politics or minutiae of the war in Ukraine. You can find as much of that as you want elsewhere.
Instead I want to talk about two historic changes. One that happened before, one that is happening now, and why we should pay attention to how they are similar.
The quote above is from what is now known as the “Arsenal of Democracy” speech from December 29, 1940.
It was as much a declaration of foreign policy as it was a declaration of intentional excess. It staked a claim for the U.S. to be the on-demand arsenal of the free world — or at least our allies and those we wanted to make allies.
The U.S. had already started investing in critical commodities and defense after nearly two decades of intense post-World War I downsizing and outright neglect. It could hardly be done overnight.
It’d be years before Great Britain could host a force that could break the Nazi’s Atlantic Wall. Years before Russia had the arms needed to reclaim land in the Battle for the Caucasus or end the Siege of Leningrad, let alone drive to Berlin.
But as FDR popularized the term “Arsenal of Democracy,” we were shipping what excess we had and tooling up an entire nation for war.
The U.S. is shipping massive amounts of weapons to Ukraine today. A lot of European nations are depleting their arsenals as well for this cause. But it is what can be spared. A small fraction of what is to come.
The current pace is wildly unsustainable. The parallels to the past are unavoidable, along with what comes next: a flood of money into long-neglected militaries.
Countries very interested in retaining enough strength to repel aggression are involved in this proxy war. So far a lot of it has been older stock that we can spare that would have been phased out anyways. That is nearly gone.
Meanwhile, production cannot in any way meet demand for years to come. With that comes a wave of new procurement contracts. One built on promises of later production. One where the U.S. is positioning itself as the guarantor of a modern arsenal for all allies.
The Stinger missiles that are so prominent in Ukraine right now are out of production. Raytheon’s CEO Greg Hayes has just warned the world that all the donations cannot be replenished any time soon. Production, at best, may restart next year.
As Mr. Hayes put it, “We’ve been working with the DoD for the last couple of weeks, we’re actively trying to resource some of the material, but unfortunately, DoD hasn’t bought a Stinger in about 18 years and some of the components are no longer commercially available.”
The Javelin missiles we are sending are rapidly depleting as well. Back on March 25, U.S. Assistant Secretary of the Army for Acquisition, Logistics, and Technology (what a mouthful) — basically the top procurement official — cited both types of weapons as being possible to restock, but at cost and with effort to bring them up to speed.
As he put it, “I think, really, those are two opportunities for the Army to rapidly move ahead, the way Congress wants us to replenish those stocks.”
The money is already available — $3.5 billion is earmarked to replace donations to Ukraine. $13.6 total was set aside.
That is just that start of what needs to be committed today for what we want tomorrow. While procurement may accelerate for these older weapons, we’re also seeing a push to the future for their replacements.
The U.S. government is talking to just about everyone involved in a weapons program behind the scenes for a surge of spending right now.
We already know Raytheon is talking to the government about ramping up production.
Lockheed Martin is in talks with the Pentagon as well, specifically for procurement involving Ukraine and Europe, as it divulged in late April.
Boeing certainly won’t be a laggard. Nor Texas Instruments or anyone else that makes any components in the complex web of production that goes into modern weapons. Nor any of their much smaller producers, many of which are domestic.
The U.S. is tooling up for a wartime economy. Virtually none of these companies have changed their revenue or production guidance, but it is coming.
It will be a multi-year, escalating surge. It will mean export versions for some countries and money to accelerate production of replacements for older tech in the U.S. arsenal.
There has never been a better time to invest in both basic military spending and advanced tech since the fall of the Berlin Wall, and perhaps the end of World War II.
No one knows this better than Jason Simpkins. Jason and his readers are perfectly positioned for the surge in spending on both fronts.
He just dropped some new research that you should check out. And stay tuned for more from him. A lot is in the works. The present is mirroring the past. We know what that means, and Jason knows how that works.
