No Profit in Peacetime.

Cold-war politics dictated that the United States maintain a standing army, navy, and air force equipped with modern weapons. But no profit existed in making weapons during peacetime — even the purchases of the U.S. military proved too small to support many of the major defense companies. Manufacturers anticipated and planned for peacetime lulls in their production, but ultimately the government had to support defense contractors with constant new orders or subsidize them directly with cash payments. Reasoning that it never hurt to have state-of-the-art equipment, the government pursued the policy of continually developing and deploying new weapons systems. This policy also kept most of the major manufacturers' production lines primed in case of emergency. Near the end of his presidency, in 1961, Eisenhower cautioned Americans about the growth of this new sector of the economy, which he called...