Election Outcome Is Good News For Defense Industry (From Forbes)

Although the defense industry tries to avoid taking sides in political races, there isn’t much doubt that this week’s Republican electoral surge is good news for the sector.  First, the GOP has a long history stretching back to the Vietnam War of supporting weapons spending more vigorously than Democrats do.  Second, Republicans are not likely to favor new entitlement programs that might squeeze military spending out of the federal budget.  Third, Republicans don’t trust arms control and the limits they impose on arsenals.  Fourth, Republican candidates these days are more likely to have military experience that enables them to grasp the value of industry programs.  Fifth, Republicans are more willing to put boots on the ground, in the Middle East and elsewhere.  Finally, Republicans will seek to loosen defense spending caps in the Budget Control Act that are the biggest threat to industry profits.  I have written a commentary for Forbes here.