00:00Israel says it's continuing to launch strikes against Iran.
00:03Iran has tonight launched retaliatory strikes on Israel.
00:07The United States has officially entered the Israel-Iran war.
00:11Since the turn of the century, there hasn't been a single year that the US wasn't involved in a foreign conflict.
00:18That might sound hard to believe.
00:20After all, politicians constantly pledge to bring the troops home, or that they want global peace.
00:25But that's not entirely true.
00:27When we look at the real winners and losers, another story emerges.
00:31Because while all the world agrees that war is a tragedy, a small group of people are quietly making huge profits.
00:38In the days following Israel's attack on Iran, shares in defense giants like Lockheed Martin, RTX Corp, and Northrop Grumman surged.
00:47And this isn't some isolated reaction. It's part of a broader pattern.
00:51When Russia invaded Ukraine in 2022, Lockheed's stock jumped by 35%.
00:57July 5th, when Israel unexpectedly raided the West Bank, prices jumped again by almost 30%, netting billions for the company's biggest shareholders.
01:07In fact, 2024 was one of the most profitable years ever for US defense companies, increasing sales by 30%.
01:14But while their earnings soared, most Americans were dealing with the opposite.
01:18Inflation remained stubborn, interest rates high, and household budgets were under real pressure.
01:24At the same time, priorities were made clear.
01:26Military spending went up, but domestic programs were slashed by $63 billion.
01:32Clearly war is making someone rich, just it isn't ordinary people, and certainly not those fighting in the military.
01:40It may seem obvious why companies get rich on conflict, but peel back the layers and a bigger picture emerges.
01:46A system designed to keep the money machine flowing.
01:49Here's why war is insanely profitable, just not for you.
01:54Today, 13% of the US budget goes to the military.
01:58At a first glance, that might seem like a necessary thing.
02:01After all, governments always needed to protect their citizens from foreign threats.
02:05But zoom out, and a different picture begins to emerge.
02:08Over time, a deeply interconnected system has developed.
02:12One that brings together defense contractors, policy makers, lobbyists, and the medias.
02:17This system doesn't just respond to threats.
02:19It shapes how those threats are perceived, and how the government reacts.
02:23To understand how this works, you need to look at one of the most powerful, and least understood, forces in the modern world.
02:29The military-industrial complex.
02:32Here's how it works.
02:34Companies like Lockheed Martin, Raytheon, Northrop Grumman don't operate like normal businesses.
02:39They don't sell to everyday people, or compete on an open market.
02:43Instead, they sell straight to the government.
02:45And if there's one thing the US government does a lot, it's buying weapons.
02:49In 2023, they spent over $877 billion on their military.
02:54That's more than the next nine countries combined.
02:58And of that, over half went to private defense contractors.
03:02Whoever is able to win these contracts can make huge profits.
03:06And like any business, they depend on demand.
03:09But in this industry, demand increases when conflict does.
03:12And that demand doesn't just come from war zones.
03:15It's shaped by how the media reports on them.
03:17Just this week, Trump called for a CNN reporter to be fired over her coverage over the US airstrikes on Iranian nuclear sites.
03:25But here's where it gets interesting.
03:27A left-leaning outlet ran the headline, Trump unloads on reporter in wild rant.
03:32It focused on his personal attacks and language, emphasizing outrage and drama.
03:37Whereas a right-leaning outlet said Trump continues to blast New York Times and CNN over weaponizing intel.
03:42This version framed the media, not Trump, as the problem, and cast him as defending military credibility.
03:48Same event, two completely different narratives.
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04:26In a healthy open market, like the restaurant industry, companies compete by trying to deliver better products at lower prices.
04:33If one restaurant makes tastier, healthier, or cheaper food, customers reward them with their business.
04:39But the defense industry is different.
04:41These companies aren't competing to feed people.
04:43They're competing to sell weapons.
04:45And the outcome they're optimizing for isn't customer satisfaction, it's conflict.
04:50The more unstable the world becomes, the more contracts they win.
04:54Lockheed Martin saw sales jump by 14% at the start of 2024.
04:58All thanks to demand for its missile systems in Israel.
05:01And that's not an exception.
05:04Following the Ukrainian war, the US government issued 80 billion in additional defense contracts,
05:09all going straight to the pockets of private corporations.
05:12These companies profit from war, instability, and fear.
05:16That in itself isn't that tough a pill to swallow.
05:19There are countless examples of industries, which in some way benefit from a spike of something bad happening in the world.
05:25But with this, it's a little different.
05:27These companies don't just sit back and wait for conflicts to happen.
05:30They spend billions every year lobbying the government with one objective in mind, selling weapons.
05:37In 2022 alone, the defense sector spent over $130 million on lobbying in Washington.
05:44That's over $350,000 every single day.
05:48Lobbying is influence.
05:50And what's all this money buying?
05:51You only need to look at the White House personnel to get an idea.
05:55Mark Esper was the Secretary of Defense during Trump's first term in the White House.
05:59His job before that?
06:01Vice President of Government Relations at Raytheon.
06:04Basically, their top lobbyist in Washington.
06:06And this isn't an exception.
06:08Over 50% of senior Pentagon officials go on to work for defense contractors after leaving government.
06:14Their objective?
06:15Get the government spending big on private sector defense contracts.
06:18And it's not just direct lobbying that these companies engage in.
06:21They've become deeply embedded across the political system.
06:25From campaigns to think tanks to media outlets.
06:28It becomes a self-reinforcing loop.
06:30Defense companies fund politicians.
06:32Then those same politicians vote to expand military budgets.
06:35The companies go on to win massive contracts and are then able to send even more money to politicians.
06:41And if a war actually breaks out, then that's the jackpot.
06:44Over the last few decades, this process has driven an explosion in military spending.
06:48Adjusted for inflation, the U.S. was spending about $400 billion per year on its military at the start of the 2000s.
06:56Today, that number has nearly doubled to $700 billion.
07:00It's become such a regular feature of U.S. budgets that most people barely notice it anymore.
07:05And when they do, it's often justified with familiar arguments that a strong military keeps the country safe
07:10and defense contracts create jobs, weapons manufacturing supports local economies.
07:15And to be fair, there is some truth in that.
07:18The defense industry employs over 2 million people, about 1% of the country's labor force.
07:23And in certain regions, defense contracts are a major source of economic activity.
07:27And politicians are quick to highlight those benefits when defending budget increases.
07:31But that doesn't change the underlying dynamic.
07:34When profit is tied to conflict, the incentives start to bend in dangerous directions.
07:38If stability leads to lower earnings, and instability unlocks massive revenue,
07:43then the system is effectively rewarding chaos.
07:46Which brings us to the present day.
07:48This cycle isn't abstract or theoretical.
07:50It's playing out in real time.
07:52Right now, tensions between Israel and Iran are boiling over.
07:55Iran is launching drone strikes on Israeli positions,
07:59and Israel is striking back with targeted air raids.
08:01The US is intervening, deploying carrier groups and air defense systems to the region,
08:06under the banner of deterrence and regional security.
08:10And the result?
08:11Defense stocks are again surging.
08:13Raytheon, the maker of the interceptors used in Israel's Iron Dome,
08:17jumps 18% in just a couple of weeks.
08:20Palantir, a data analytics firm specializing in military technology,
08:24saw its trading volume triple overnight,
08:26as investors piled in, anticipating fresh government contracts.
08:30And this just goes on.
08:32Every missile launched, every troop deployed,
08:34every overseas base maintained,
08:36sends defense companies' profits higher.
08:38And it's not just the US.
08:40As global defense spending hits record highs,
08:43arms exporters from France, China and Israel are also seeing massive gains,
08:48as countries rush to ream in more in a volatile world.
08:51But beyond the headlines and the stock market surges,
08:55there's a quieter consequence of this system.
08:56One that affects almost everyone,
08:58yet rarely makes it into the conversation.
09:01War and the military infrastructure built around it is insanely expensive.
09:05About one-sixth of the US budget is now spent on the military,
09:08making it the biggest category of government spending.
09:11The average US citizen now spends over $2,800 every year just to pay for the military.
09:17And the consequence of this spending isn't just theoretical.
09:21Every dollar that goes to fund a weapons system is a dollar that could have been spent on lowering healthcare costs,
09:26fixing crumbling infrastructure, or supporting working families.
09:30It's part of why, despite living in the richest country on Earth,
09:33many Americans struggle to afford basic necessities,
09:36from housing to education to prescription medication.
09:39The structure of military spending has created an economic loop,
09:43where public money consistently flows to a handful of firms and shareholders.
09:47Ordinary taxpayers fund the contracts,
09:50defence companies collect the revenue,
09:51and more often than not, the wealthiest profit.
09:54The reality is that the system has quietly evolved
09:56to serve the interests of a small, well-connected group,
10:00at the expense of everyone else.
10:02Most people see war as a last resort,
10:05something that happens when diplomacy fails.
10:07But when you look at the incentives behind the decisions,
10:10the picture changes.
10:11Over time, a network has formed.
10:13None of the actors need to push for conflict,
10:16but all benefit when tensions rise and budgets grow.
10:19What's framed as national security often operates as a reliable economic engine.
10:24So when wars keep happening,
10:25at the same time, companies keep winning.
10:28This isn't geopolitical, it's structural.
10:30And as long as those incentives stay in place, so will the cycle.
