Why War is Insanely Profitable... Just Not for You

0:00 Israel says it's continuing to launch strikes against Iran. Iran has tonight launched retaliatory strikes on Israel. The United States has officially entered the Israel Iran war. Since the turn of the century, there hasn't been a single year that the US wasn't involved in a foreign conflict. That might sound hard to believe. After all, politicians constantly pledge to bring the troops home or that they want global peace. But that's not entirely true. When we look at the real winners and losers, another story emerges. Because while all the world agrees that war is a tragedy, a small group of people are quietly making huge profits. In the days following Israel's attack on Iran, shares in defense giants like Loheed Martin, RTX Corp, and Northrup

0:46 Grumman surged. And this isn't some isolated reaction. It's part of a broader pattern. When Russia invaded Ukraine in 2022, blocked stock jumped by 35%. July 5th, when Israel unexpectedly raided the West Bank, prices jumped again by almost 30%, netting billions for the company's biggest shareholders. In fact, 2024 was one of the most profitable years ever for US defense companies, increasing sales by 30%. But while their earnings soared, most Americans were dealing with the opposite. Inflation remained stubborn, interest rates high, and household budgets were under real pressure. At the same time, priorities were made clear, military spending went up, but domestic programs were slashed by $63 billion.

1:32 Clearly, war is making someone rich. Just it isn't ordinary people, and certainly not those fighting in the military. It may seem obvious why companies get rich on conflict. But peel back the layers and a bigger picture emerges. A system designed to keep the money machine flowing. Here's why war is insanely profitable, just not for you. Today, 13% of the US budget goes to the military. At a first glance, that might seem like a necessary thing. After all, governments always needed to protect their citizens from foreign threats. But zoom out, and a different picture begins to emerge. Over time, a deeply interconnected system has developed. one that brings together defense contractors, policy makers, lobbyists, and the medias. This system doesn't just

2:18 respond to threats. It shapes how those threats are perceived and how the government reacts. To understand how this works, you need to look at one of the most powerful and least understood forces in the modern world, the military industrial complex. Here's how it works. Companies like Loheed Martin, Rathon, Northrup Grumman don't operate like normal businesses. They don't sell to everyday people or compete on an open market. Instead, they sell straight to the government. And if there's one thing the US government does a lot, it's buying weapons. In 2023, they spent over $877 billion on their military. That's more than the next nine countries combined. And of that, over half went to private defense contractors. Whoever is able to win these contracts can make

3:04 huge profits. And like any business, they depend on demand. But in this industry, demand increases when conflict does. And that demand doesn't just come from war zones. It's shaped by how the media reports on them. Just this week, Trump called for a CNN reporter to be fired over her coverage over the US air strikes on Iranian nuclear sites. But here's where it gets interesting. A left-leaning outlet ran the headline Trump unloads on reporter in wild rant. It focused on his personal attacks and language emphasizing outrage and drama. Whereas a right-leaning outlet said Trump continues to blast New York Times and CNN over weaponizing intel. This version framed the media, not Trump, as the problem and cast him as defending military credibility. Same event, two

3:49 completely different narratives. And that's exactly why I use Ground News, today's sponsor, as it shows exactly how stories are framed depending on their political lean side by side. You can see how the left emphasizes one angle and the right another, and how the truth might sit in between. Their blind spot feature is also key as it flags stories that are being ignored entirely by either the left or the right, so you're not just getting half the picture. If you want to stay informed without being manipulated, scan the QR code or go to ground.news/invisible for 40% off the Vantage plan. That's what I use and I highly recommend it. The link is in the description. In a healthy open market like the restaurant industry, companies compete by trying to deliver better products at lower prices. If one restaurant makes tastier,

4:35 healthier, or cheaper food, customers reward them with their business. But the defense industry is different. These companies aren't competing to feed people. They're competing to sell weapons. And the outcome they're optimizing for isn't customer satisfaction, it's conflict. The more unstable the world becomes, the more contracts they win. Loheed Martin saw sales jump by 14% at the start of 2024. All thanks to demand for its missile systems in Israel. And that's not an exception. Following the Ukrainian war, the US government issued 80 billion in additional defense contracts, all going straight to the pockets of private corporations. These companies profit from war, instability, and fear. That in itself isn't that tough a pill to swallow. There are countless examples of

5:20 industries which in some way benefit from a spike of something bad happening in the world. But with this, it's a little different. These companies don't just sit back and wait for conflicts to happen. They spend billions every year lobbying the government with one objective in mind, selling weapons. In 2022 alone, the defense sector spent over $130 million on lobbying in Washington. That's over $350,000 every single day. Lobbying is influence. And what's all this money buying? You only need to look at the White House personnel to get an idea. Mark Esper was a Secretary of Defense during Trump's first term in the White House. his job before that, vice president of government relations at Rathon, basically their top lobbyist in Washington. And this isn't an exception.

6:08 Over 50% of senior Pentagon officials go on to work for defense contractors after leaving government. Their objective, get the government spending big on private sector defense contracts. And it's not just direct lobbying that these companies engage in. They've become deeply embedded across the political system. From campaigns to think tanks to media outlets, it becomes a self-reinforcing loop. Defense companies fund politicians. Then those same politicians vote to expand military budgets. The companies go on to win massive contracts and are then able to send even more money to politicians. And if a war actually breaks out, then that's the jackpot. Over the last few decades, this process has driven an explosion in military spending. Adjusted for inflation, the US was spending about $400 billion per year on its military at

6:54 the start of the 2000s. Today, that number has nearly doubled to 700 billion. It's become such a regular feature of US budgets that most people barely notice it anymore. And when they do, it's often justified with familiar arguments that a strong military keeps the country safe, and defense contracts create jobs, weapons manufacturing supports local economies. And to be fair, there is some truth in that. The defense industry employs over 2 million people, about 1% of the country's labor force. And in certain regions, defense contracts are a major source of economic activity, and politicians are quick to highlight those benefits when defending budget increases. But that doesn't change the underlying dynamic. When profit is tied to conflict, the incentives start to bend in dangerous directions. If stability leads to lower

7:40 earnings and instability unlocks massive revenue, then the system is effectively rewarding chaos. Which brings us to the present day. This cycle isn't abstract or theoretical. It's playing out in real time. Right now, tensions between Israel and Iran are boiling over. Iran is launching drone strikes on Israeli positions. And Israel is striking back with targeted air raids. The US is intervening, deploying carrier groups and air defense systems to the region under the banner of deterrence and regional security. And the result, defense stocks are again surging. Rathon, the maker of the interceptors used in Israel's Iron Dome, jumps 18% in just a couple of weeks. Palanteer, a data analytics firm specializing in military technology, saw its trading volume triple overnight as investors

8:27 piled in, anticipating fresh government contracts. And this just goes on. Every missile launched, every troop deployed, every overseas base maintained sends defense companies profits higher. And it's not just the US. As global defense spending hits record highs, arms exporters from France, China, and Israel are also seeing massive gains as countries rush to rein more in a volatile world. But beyond the headlines and the stock market surges, there's a quieter consequence of this system, one that affects almost everyone, yet rarely makes it into the conversation. War and the military infrastructure built around it is insanely expensive. About 16th of the US budget is now spent on the military, making it the biggest category of government spending. The average US citizen now spends over $2,800 every

9:15 year just to pay for the military. And the consequence of this spending isn't just theoretical. Every dollar that goes to fund a weapon system is a dollar that could have been spent on lowering healthare costs, fixing crumbling infrastructure, or supporting working families. It's part of why despite living in the richest country on Earth, many Americans struggle to afford basic necessities. From housing to education to prescription medication. The structure of military spending has created an economic loop where public money consistently flows to a handful of firms and shareholders. Ordinary taxpayers fund the contracts, defense companies collect the revenue, and more often than not, the wealthiest profit. The reality is that the system has quietly evolved to serve the interests of a small, well-connected group at the expense of everyone else. Most people

10:03 see war as a last resort, something that happens when diplomacy fails. But when you look at the incentives behind the decisions, the picture changes over time. A network has formed. None of the actors need to push for conflict, but all benefit when tensions rise and budgets grow. What's framed as national security often operates as a reliable economic engine. So when wars keep happening, at the same time, companies keep winning. This isn't geopolitical, it's structural. And as long as those incentives stay in place, so will the cycle.