Belief in Excellence leads to stability and optimism

By Professor Periklis Gogas

Dr. Periklis Gogasis a frequent contributor to The Business Thinker magazine. He is a Professor of Economic Analysis and international Economics, Department of International Economics and Development, Democritus University of Thrace, Greece

The economic crisis of recent years has led many of the Greeks to come closer to economics looking mainly for the causes that led to the prolonged crisis and the structural problems of the Greek economy. Many times, this criticism leads us to exaggerations or even wrong judgments, as it is based on an impression of the potential and dynamics of the Greek economy, which has been cultivated for decades within the Greek society, mainly by the politicians and journalists but it does not correspond to reality.

Is Greece a small and poor country, with an oversized public sector, whose economy is based exclusively on the agricultural and tourism sector? Are the Greeks lazy people that produce nothing? Are wage cuts the only way to make our country more competitive?

These are just some of the questions that concern us (Greeks) and which Dr. Periklis Gogas professor at the Democritus University of Thrace, addressed with his books “Economics for Beginners” and “Modern Greek Myths”. With these books he provided the opportunity to all of us to come closer to economics and seek answers to a series of critical questions that concern us both for the past and for the future of the Greek economy and consequently of our country in general.

Dr. Periklis Gogas is Professor of Economic Analysis and International Economics at the Democritus University of Thrace. Most recently he was a Visiting Professor at the Ross School of Business at the University of Michigan. He also teaches Finance, Banking and Forecasting at postgraduate level at the Aristotle University of Thessaloniki, the International Hellenic University, the Hellenic Open University and at Neapolis University Pafos (Cyprus) .

He received his PhD from the University of Calgary, his Master’s degree from the University of Saskatchewan and his Bachelor’s degree from the University of Macedonia. He has presented research seminars at the European Central Bank, at the Ross School of Business at the University of Michigan , Temple University , at the Mobile Media Association of New York. He is also an evaluator of research and academic programs in Greece, Italy, Cyprus, Croatia, Poland, Kazakhstan, etc.

His research interests include Macroeconomics, Finance, Banking, Machine Learning, Artificial Intelligence, Econometrics and Complex Networks and he is an Associate Editor for the “Journal Economic Asymmetries” (Elsevier ), the Journal of Banking and Financial Technology ( Springer ) and other editorial board. scientific journals.

His research work is published regularly in scientific journals such , the Journal of Money Credit and Banking, Journal of Banking and Finance, International Journal of Forecasting, International Review of Economics and Finance, International Finance, Journal of Forecasting, Physica A, Computational Economics, Economic Modeling, Open Economies Review.

Mr. Gogas, in your book “Modern Greek Myths” you describe twenty myths about our country, which, however, the vast majority of Greek society considers as reality. Why were these myths cultivated? What have they served over time?

I think it is the result of a social and national introversion that came to create a feeling of inferiority for Greece and the Greeks. Of course, some of them are also international, but the vast majority are endogenous. We believe and take it for granted without even considering it any further that we are, for example, a small, underdeveloped country that produces nothing and generally a small “detail” on the world map and economic world.

Perhaps it was an easily accepted excuse that was cleverly spread to cover up the failures of our politicians. If we all believe that we are small, insignificant, underdeveloped, we do not produce anything and we are lazy, it is a very good excuse not to ask for something better and it justifies every failure of our politicians and all of us personally.

The truth is very different. Greece was before the crisis in the 19 most prosperous countries in the world and after the crisis we fell to 29 in a total of 200 countries. Even if we do not take into account the population, in absolute numbers the Greek economy is among the 45 strongest in the world.

I confess that by reading your books, the reader reconsiders a lot. What is the truth, after all? Do you think that the answer to this question may coincide with the causes that led us to the memoranda and all that it has followed since?

That is the main goal of that book. To revisit the idea we have for ourselves because without believing in our strengths we will not be able to do well and achieve the best for ourselves. Our difference with the USA, for example, is that they believe that they are the best in everything. In the economy, wealth, democracy, justice, institutions, etc. Of course, in some of these they are good, but in others they are far behind. But belief in superiority leads to stability and optimism for their future. It leads to a conscious effort to stay on top -real or not- and that serves them good in the long-run.

The big issue is that if you do not identify what the real problem is, how can you find a solution? When you feel that everything is bad, you do not have the courage to fix anything. You are in despair. You do not know where to start and you usually give up. That’s why we have to find exactly where we are lagging behind. What are the structural problems and real impediments in increasing our prosperity. No, everything is not bad, no all is not broken. We have one of the best democracies on the planet. A beautiful country, many dynamic companies that are world leaders and a highly educated human capital.

Recently, the current Government has been heavily criticized for the development model it has been following since the beginning of its term and, in particular, for the way it manages the crisis caused by the effects of the coronavirus. What do you think about how this situation is managed so far by the government? And, at the same time, how do you rate its performance, financially and developmentally?

These are two different issues.

On the subject of the pandemic, I think the government handled it well until last September. Then many mistakes were made unjustifiably, such as the opening of schools, which aggravated the problem, while almost everyone was accustomed to distance education. Many mistakes were made for a narrow political – and I mean micropolitical – interest of specific ministers of the government. They tried to look good and relax the measures in the sphere of their influence in order to gain some electoral benefit. Nonetheless, this was done to the detriment of public health and the economy by extension. We saw many regressions in the measures that as a final result had in the eyes of the public the loss of credibility to all measures.

With respect to the economic policy now, I saw that since 2019 with the election of the new government it was completely anachronistic and “inspired” by the decade of 1950. It may have been good for that era but clearly not anymore.

· Zero VAT was imposed on construction, as if that was our problem. The infrastructure of the country is of high quality with so many billions invested by the EU.

· But VAT and other taxes on universities, which are by definition the center of development and prosperity of any developed nation, have remained constant.

· Why not make all research funds for the universities tax-free? so that our “best minds” do not go to study and research abroad?

· Why Ph.D. students have still to pay taxes on their minimal incomes?

· Of the €100 that we will bring to the country from a European research program, more than half go to fees and various taxes. Money that can finance our research through laboratories and payments to doctoral students.

· No provision for innovation spin-offs from universities or other high-tech companies.

· Why not provide a 5-10 years zero-tax period to every high-tech company that will come to invest in Greece?

· At the same time, provide to any new incoming large investment with a guaranteed stable tax system for the same period. You know, from my business experience as a Financial Director at

a multinational corporation, I can tell you that the main motivation and driver to invest in another country for such a company is not the tax rate, but the stability of the tax environment. That is why countries with much higher corporate taxes have no problem attracting investment from many large companies. We focused on reducing rates that for someone who makes a long-term investment is not an incentive as these tax rates can change overnight.

We still believe that tourism is the most important component of our GDP and it is not. It constitutes only 6% -7% of our GDP. We also believe that we are an agricultural economy which is also not true as the primary sector accounts for only 3% of our GDP. The truth is that similarly to any developed industrial country, 80% of our GDP comes from the services sector and relate to activities such as: banking, insurance, transportation, telecommunications, internet, software , health, education, entertainment, etc.

My example is GrandTheftAuto (GTA). For those of you who do not know, it is a very successful computer game. What you probably do not know is that the total sales of this game reach $6 billion. Yes, 4% of Greek GDP from just one game. This game is, of course, a product of the services sector.

I would like to dwell a little more on the Health sector, as there are many who argue that the pandemic has come to reveal the enormous problems of health systems worldwide. After all, are health systems the biggest “victim” of the coronavirus? Is the way in which our country responded satisfactory?

Many people will be surprised -again- but out health system is according to the World Health Organization (WHO), the 7th best in the world. It responded very well to the pandemic, despite the problems and shortcomings that were created after an almost decade-long cuts because of the debt crisis. That is why we must support it in order for it to remain good and of course to become better. People take for granted some things they have but it is good to recognize them and be appreciate them. Not all countries have free health care. In the US if you call an ambulance you may have to pay from $1,000 to $5,000 for your transfer to the private hospital to which it belongs and there if it is not covered by your insurance (if you are insured) you will have to pay thousands of dollars for simple things like a broken leg.

Therefore, it is very natural for something unprecedented like a pandemic we have never seen before to create many problems to a health system. These are not normal time and needs that we try to meet. But our top and highly skilled doctors and nurses do their best.

Are you optimistic about the future, especially in a period that coincides with the gradual opening of activities? What is considered the most appropriate mix, based on the current data of the Greek economy, in order for the country to achieve a stable development course?

I am optimistic yes. I estimate that this crisis will be followed by a growth of 6% -8% in the next 6 months. This is the case, for example, in the United States,

which is ahead of vaccinations and has returned faster to opening the economy. The big difference in relation to the debt crisis is that we did not have any destruction of the productive potential of the country, both human and natural capital. We just pressed “pause” for about a year. It is like a car that, while travelling, finds an obstacle in its path, like a heard of sheep that we may encounter on a small Greek country road. In that case we will reduce spped and even stall. But once the herd is gone, we can very easily return to the speed we had before. The situation, though, was not the same in the recent debt crisis. In that case the car was severely damaged and lost speed. Thus, it was very difficult to get to where it was before. In short, we have a strong economy, which now, in contrast to the debt crisis, can borrow at very low interest rates, even negative in some cases. Thus, the return to growth rates will be easy

THE ROI OF THE B-2 SPIRIT STEALTH BOMBER -A Transformative and Impactful Public Private Partnership-

By George A. Haloulakos, CFA, MBA

George A. Haloulakos, CFA, is a university instructor, author and entrepreneur. His published works utilize aviation as a teaching tool for Finance, Game Theory, History and Strategy.


The Northrop B-2 Spirit Stealth Bomber is one of the most transformative and impactful Public Private Partnerships (PPP) since the Apollo Manned Moon Mission. This article utilizes Finance to quantify the total economic impact of the B-2 in terms of ROI (Return on Investment). Contributions and spin-off benefits arising from or associated with the B-2 demonstrate how this game-changing capital asset has altered national defense policy, the political economy and military technology. The B-2’s multi-decade legacy

bridging the 20th and 21st centuries casts a long shadow that warrants our appreciation in this unique economic reappraisal.

NOTE: This research article is based on the author’s longtime experience as a Special Situations Analyst (“Buy” side and “Sell” side), subject expert in Finance and later as a published author on military aviation. As such, insights offered here are largely based on primary research by the author supplemented by other authoritative sources listed in both the text and References section of this article.

This article is organized as follows: First, we present our observations derived from evaluating the total economic return on the B-2 Spirit that takes into account both quantitative and qualitative considerations. Second, is a review of basic Finance principles used in analyzing the B-2 Spirit as a capital asset deployed as a Public Private Partnership (PPP). Finally, we make the case on how the B-2 has been a transformative and impactful project in a variety of venues.


> As a Public Private Partnership, the B-2 Spirit generated economic added-value 3-times greater than its cost thereby yielding a net return 2-times the original investment. Concurrently, the jobs connected with the B-2 project created a 2.7 fold increase in employment. Such spending and employment multipliers are consistent with other historic aerospace capital projects, notably the Apollo manned mission.

> The B-2 Spirit was a game-changing asset in terms of national defense policy, resource management and the structure of military/aerospace industry. Northrop was transformed from a respectable company into a global brand while increasing in equity value by 5-fold in the 1981-2020 time frame.

> The changes in the aforementioned venues have altered the metrics used in evaluating the worthiness of military capital assets thereby impacting the public perceptions and/or appreciation of projects like the B-2 Spirit.


Production and deployment of the B-2 Spirit was a major technology driver for the US aerospace industry with further advances in computers, software, composite materials and precision guided munitions. Much like the Apollo manned spacecraft program of the 1960s, there were enormous spin-off benefits for civil, commercial and personal applications in new materials, telecommunications, medical technology, engineering, science and other such related areas.

One example is further advancement in computers associated with the design, development, testing, production and deployment of the B-2. Computer technology has been an integral part of America’s economic expansion since the early 1980s because of the enormous productivity that cascaded throughout the economy from increased computer applications in both the consumer and industrial sectors. Another example is how B-2 related design and development work has been a process driver for other major military and commercial aircraft programs. Due to its “flying wing” design, there were control and stabilization difficulties that required “fly by wire” and “computer generated artificial stability” technologies developed for the B-2 that were also transferrable to other aircraft that helped improve safety and operating efficiency.

How did these aforementioned “qualitative” benefits translate into added-value? Using Finance formulas developed from doing investment research and valuation of publicly traded military/aerospace companies, we can estimate added-value in terms of income/spending and employment.

> Income/Spending Multiplier

The income/spending multiplier is mathematically expressed as:

1 / (1-MPC), where MPC stands for Marginal Propensity to Consume (explained further in the ensuing paragraphs).

With the military/aerospace sector, the historic average MPC we have observed is 0.667. This yields an Income/Spending Multipier of 3.

This is arrived at by: 1 / (1-0.667) = 1 / 0.333 = 3

With the final cost of the B-2 program estimated at $45 billion, the implied added-value in terms of income/spending would be $135 billion. This is arrived at by multiplying ($45 billion) x 3 = $135 billion.

Since a 3x multiplier applied to a final cost of $45 billion yields gross added-value of $135 billion, this 3-fold increase translates into a Return on Investment (ROI) of 200% or a Net Added-value of $90 billion. This is arrived with a 2-step process.

Step 1: Calculating ROI in Decimal Form

ROI = [(Added-value) – (Final Cost)] / [Final Cost)]

ROI = [$135 billion – $45 billion] / [$45 billion]

ROI = [$90 billion] / [$45 billion]

ROI = 2.00

Step 2: Converting ROI into Percentage Form

An ROI of 2.00 translates into 200% (which is calculated by multiplying the decimal value x 100%, or (2.00) x (100%) = 200%

> Employment Multiplier

With the military/aerospace sector, the historic average employment multiplier we have observed is 2.7 times. In other words, for every 1,000 aerospace jobs created, this has the effect of generating an additional 2,700 jobs as part of the supply chain and/or infrastructure. In early 1987, the B-2 program as whole employed 40,000 workers throughout the USA. On this basis, and using the aforementioned 2.7 employment multiplier, this implies that the B-2 Spirit program created total employment of 108,000 workers. This is arrived at by multiplying (40,000) x (2.7) = 108,000

Moreover, these are high-income jobs. In the preceding section we noted that such jobs had a Marginal Propensity to Consume of 0.667 which means such workers on average would spend approximately 0.667 out of every one dollar (US$) thereby creating an income/spending multiplier of 3. Thus, we have quantified that the B-2 Spirit created a 3-fold return as measured by income and 2.7 times increase in employment. But these are just numbers. While they quantify added-value in Finance terms, we have also highlighted the

corresponding qualitative benefits arising from the B-2 Spirit that have continued to yield forth positive returns by advancing the frontiers of knowledge and human progress in the same tradition associated with the Apollo manned moon mission of the 1960s. Estimating a monetary value for such benefits would further increase the added-value in Finance terms.


The B-2 Spirit dramatically altered the landscape for national defense policy, resource management and the military/aerospace industry structure. Its highly advanced technologies created a capital asset with significantly greater firepower, survivability and accuracy that meant fewer bomber aircraft were required versus previous generations that had hundreds and even thousands of such assets on alert.

> Stronger National Defense

The B-2 Spirit strategic bomber provides an unmatched combination of heavy payload, long range and stealth on a single platform. Moreover, since it is one of the most survivable aircraft in the world, the B-2 is able to fulfill the necessary tasks for a successful strike mission: surprise, suppression and evasion. This is because the B-2 is able to reduce detection with its low observable technologies coupled with composite materials and aerodynamic flying wing design that gives the aircraft the ability to penetrate complex, sophisticated adversary defenses. As such, this puts the adversary’s high-value, heavily defended targets at risk since the B-2 can reach any point in the world within hours.

Here are few metrics that affirm the aforementioned capabilities. The B-2 Spirit can fly at high subsonic speed and reach an altitude exceeding 50,000 feet. Its intercontinental range enables the aircraft to fly 6,000 nautical miles without refueling and 10,000 nautical miles with a single refueling. With a two-person crew (a pilot and mission commander), the B-2 can deliver a payload of 20 tons with pinpoint accuracy.

In sum, from a defense policy perspective, the aforementioned characteristics enables the B-2 to offer increased efficiency, firepower and flexibility versus prior generation bomber aircraft. This enables the US Air Force to fulfill

strategic defense capabilities with fewer aircraft, thereby freeing up capital for other projects. The next section provides further clarification.

>Efficiency Gains in Resource/Asset Management

To fully appreciate how the B-2 Spirit has altered resource management, that, in turn, has affected both national defense and the political economy, it is worth reviewing how the advanced technologies of the B-2 have streamlined the resources required for combat missions. Our comparison will examine the number and type of aircraft required for Standard, Precision, Precision plus Stealth strike missions versus the B-2. In this comparison, Standard refers to conventional gravity bombs while Precision refers to laser guided bombs. Precision plus Stealth is the use of laser guided bombs with the Lockheed F-117 Nighthawk, a stealth attack aircraft that requires forward basing due to limited range (approximately 1,000 miles) and a much smaller payload versus a strategic bomber. The B-2 is Stealth, but unlike the F-117 has intercontinental range plus a very large payload.

Standard or conventional gravity bomb missions typically require 32 bombers (B-52 or B-1B), 16 escorts, 12 aircraft for suppression of adversary’s defenses and 12 refueling tankers. Precision strike missions require 16 bombers (B-1B or B-52), 16 escorts, 12 aircraft for suppression of adversary’s defenses and 11 refueling tankers. Precision plus Stealth uses 8 strike aircraft (F-117 Nighthawk) and 2 refueling tankers.

Note the numbers and use of different bomber aircraft to align the aircraft payload capabilities with the type of bomber weapons used for a strike mission. Also noteworthy is the absence of escort and suppression aircraft when Stealth is deployed.

In comparison, two B-2 Spirit stealth bombers can accomplish the SAME as each of these types of bomber groups described above! Since the B-2 has a significantly greater success rate in accuracy and survivability, this means fewer capital assets (human, physical and financial) are at risk while providing superior capabilities in projecting our nation’s firepower when needed. This staggering comparison is even more amazing when the B-2 combat record is examined with other US Air Force bomber aircraft

whose service life intersected with the B-2. [Source: Beyond the “Bomber”: The New Long-Range Sensor-Shooter Aircraft and United States National Security – The Value of Stealth chapter. By Lt Gen David A. Deptula – USAF (Ret) 2015.]

> B-2 Achieves Higher Success / Lower Risk Combat Record

For our purposes of “comparable analysis” we have utilized strategic jet bomber aircraft whose service lives have intersected during the past 50+ years. In this comparison we have included the B-52, B-1B and FB-111 as each of these bomber aircraft have service lives that have either dovetailed or intersected with the service life of the B-2.

B-2 Combat Performance in 1999 Balkans War

(1) The B-2 destroyed one-third of all Serbian targets in the first eight weeks of the war with just six (6) B-2s making non-stop global flights from Missouri to the Balkans with refueling.

(2) Over the course of the war, the B-2 flew just 50 out of 34,000 (or less than 0.15%) of the total sorties by NATO (North Atlantic Treaty Organization) strike aircraft, but hit 11% of the targets, including a crucial bridge over the Danube River in Serbia that had stymied all other NATO strike aircraft for two weeks!

The B-2 posted greater operating efficiency versus the B-1B in this same venue while using an equal number of aircraft. By comparison, six (6) B-1B aircraft flew 2% of total NATO sorties (or 13-times more than the B-2) while dropping 20% of the ordnance. In other words, on an apples-to-apples basis,

an equal number of B-1B aircraft (six) had to fly roughly 6-times more sorties than six B-2 bombers to match the B-2’s combat record of hitting 11% of all targets. Yet, only the B-2 was able to hit the aforementioned crucial bridge over the Danube which had eluded all other NATO strike aircraft. thereby affirming the B-2’s efficiency advantage.

This is not meant to denigrate the B-1B, a most versatile and powerful strike aircraft, but rather to illustrate that the advanced technologies associated with the B-2 enable it to be more efficient because it is able to do more with fewer sorties at lower risk. The B-2 requires a two-person crew versus three for a

B-1B. Therefore in the example given from the 1999 Balkans War, six B-2 bombers placed 12-crew members in combat while six B-1B bombers placed 18-crew members (or 50% more) in combat. This affirms not only a higher efficiency rate for the B-2, but lower attrition risk since fewer crew members are needed for a mission.

As of this writing, both the B-2 and B-1B have experienced zero combat losses. However the same cannot be said for the other bomber aircraft used in this comparision. The B-52 and FB-111 both experienced losses in combat with lower accuracy versus their aformentioned successors. While these two bombers performed admirably in high-profile missions, their success was tempered by the loss of aircraft and combat personnel. This provided the incentive for further advancement in technologies to increase the success rate while lowering the attrition risk to both aircraft and crew. The outcome was development and deployment of the B-1B (initial operating capability reached in 1986) and the B-2 (1997). But before these advanced aircraft could be deployed, the B-52 and FB-111 shouldered the burden of long-range strike missions that carried high attrition risk. Two such long-range strategic bombing missions are given as examples for this paper in which these aircraft were essentially the “tip of the spear.”

Operation Linebacker II (US Christmas Bombing vs Vietnam 1972)

For eleven days, 207 B-52 bombers launched continuous aerial bombings on North Vietnam. While this mission led to resumption of eventual settlement talks, 16 B-52 bombers (each carrying a crew of 6) were shot down by the enemy for an aircraft loss rate of 7.7%.

Operation El Dorado Canyon (US Airstrike vs Libya 1986)

This strike mission featured 18 FB-111 bombers (each carrying a crew of 2). Nine (9) of the 18 FB-111s (or 50%) released their ordnance on target. One FB-111 was shot down by the enemy for an aircraft loss rate of 5.6%.

As a reminder that it is the portfolio or mix of different types of aircraft that generates the highest probability of successful, accurate strikes with the least risk (the central theme of my book CALL TO GLORY), it is worth noting that in Operation Desert Storm (1991), B-52s flew 1,620 sorties while delivering

40% of the weapons dropped by coalition forces and with zero combat losses. The FB-111 strategic bomber was not used in Operation Desert Storm but two variants of the airframe, the F-111E and F-111F, were deployed with great success. The tactical F-111 variants were credited with delivering approximately 80% of the war’s laser-guided bombs and destroying over 1,500 enemy tanks and armored vehicles. As part of a mixed force, the F-111 variants had zero combat losses.

> Northrop: Transformed From Respectable Company to Industry Leader

Although just 21 B-2 aircraft were built, thereby implying a unit cost of $2.1 billion, the enormous success of this capital project transformed Northrop – the primary contractor – from a solid, respectable company in the military/aerospace sector to an iconic global industry brand. Moreover, it helped to fulfill the potential as envisioned by its legendary founder, Jack Northrop. Financially, Northrop’s industry reputation was based on its success as a manufacturer of light-weight, economical fighter aircraft (notably the T-38 and F-5) which for decades have served as trainers as well as assets sold to overseas US allies while also used by the US Air Force and US Marine Corps. Northrop’s legacy as an innovator in aerodynamic design can be traced directly to its entrepreneurial founder, Jack Northrop, who created the flying wing that would eventually become the company’s global brand identity. Beginning in 1929 with the Avion Experimental #1 and continuing throughout the 1940s with the N-M9 Flying Wing, XP-79B Flying Ram, XB-35, YB-49 and the YB-35, Northrop laid the foundation for what would become the B-2.

Since the flying wing concept was based largely on intuition rather than analytics, the early pioneering variants of this design relied on very skilled test pilots to make it work. By the 1980s computer and fly by wire technologies were developed to resolve control and stabilization issues that plagued the early variants. This transformed the flying wing from a novelty into a formidable combat asset. As a technology driver, the B-2 not only changed the role of the strategic bomber but its technical advancement elevated Northrop into an industry leader. The financial success of the B-2 Spirit as a Public Private Partnership enabled Northrop Corporation to acquire the Grumman Corporation in 1994, thereby becoming Northrop

Grumman Corporation.

Despite the inherent cyclical nature of the military/aerospace industry and its eventual consolidation, the success of the B-2 Spirit and its accompanying synergy not only enabled Northrop to acquire Grumman, but achieve a very successful investment record as a publicly traded company. Beginning with 1981, when Northrop was officially awarded the contract to build the B-2, and the ensuing four decades ending in 2020, the stock increased in value by 5-fold from $61 to $305. This investment record, driven in large part by the success of the B-2, appears poised for even higher flight as Northrop Grumman was selected as the prime contractor for the B-21 Raider, the next generation stealth bomber! [Sources: Northrop Grumman Public Company Documents and]


The financial and operating success of the B-2 Spirit had a further significant effect in terms of how very large scale military capital projects are evaluated. Earlier we quantified how the B-2 has superior accuracy and survivability versus prior generation strategic bomber aircraft, thereby translating into lower risk and greater efficiency. This has created a seismic shift in how such capital assets are valued and deployed. Prior generations of bomber aircraft were built in much larger quantities to fulfill various global mission requirements while allowing a wide measure of error for attrition risk.

Here is how the production numbers of the bomber aircraft cited in this paper compare: 744 B-52s, 76 FB-111s, 100 B-1Bs and 21 B-2s. Of these bomber aircraft, the estimated number currently in service as of this writing are: 58 B-52s, 45 B-1Bs and 20 B-2s. The FB-111 was retired in the early 1990s.

Historically, the standard metric for evaluating such aircraft is operational readiness or mission capability rates. As a practical matter, simpler or less technically complex aircraft have lower maintenance. Lower maintenance requirements tend to create higher readiness or capability rates. Although the last B-52 was produced in 1962, there have been several capital upgrades that have extended the life of the airframe while enabling it to remain at a higher mission capability rate versus the B-1B and B-2. Latest published mi

Latest published mission

2% for the B-1B and 60.47% for the B-2.

Applying these mission capable rates to the aforementioned aircraft fleets currently in service, implies that 38 out of the 58 B-52 bombers are available for immediate deployment versus 21 B-1Bs out of 45 and 12 B-2s out of 20. While the B-52 does not have the same low-level capability as the variable, swing-wing B-1B nor the stealth of the B-2, its utilitarian airframe has enabled the B-52 to remain a valuable asset because of its relatively higher operational readiness rate and its adaptability into a stand-off, long-range platform for missiles, drones and electronic countermeasures plus other varied roles such as maritime surveillance. The universal acceptance of the mission capable rate metric has continued to be a major reason for the B-52 remaining in active service.

In the case of the B-1B, its noticeably lower operational readiness can be attributed to excessive wear-and-tear associated with its ongoing long-range missions in the War on Terror since the early 2000s. The B-2, an inherently more complex aircraft than either the B-52 or the B-1B, has the second best mission capable rate among the trio of strategic jet bombers. However, due to its significantly higher survivability and accuracy, the strict application of this metric is less meaningful due to its stealth capability.

Earlier we quantified how two (2) B-2 bombers were capable of fulfilling the same missions that would otherwise require 8-to-16 times more bomber aircraft (16 to 32 B-52s or B-1Bs, respectively, for conventional gravity bomb and precision strike missions). This staggering comparison reflects the higher survivability and accuracy associated with the B-2’s stealth. Thus while the mission capable rate is important in evaluating the value of a long-range strike aircraft, it is far less meaningful in the “Age of Stealth” since fewer aircraft are required.

The current operational readiness of the B-2 means that 12 such aircraft (out of 20) are immediately available for combat. Yet it is unlikely that all aircraft would be needed simultaneously as the B-2s historically have met or exceeded expectations versus all prior generation strategic bombers while

involving no more than 10% to 30% of the B-2 fleet in any given mission.

Here are three examples. In 1999 during the Balkans War, six (6) B-2s flew non-stop from Missouri to Yugoslavia (and back) while recording the highest efficiency including destroying high-value targets that had eluded all other strike aircraft. During the War on Terror in March 2011, two (2) B-2s were involved with Operation Odyssey Dawn to enforce the “no-fly” zone in Libya. In January 2017, two (2) B-2s attacked the adversary’s training camp in Libya. In each of these examples, less than one-third of the B-2 fleet was required for combat, while still having a respectable 60.47% operational readiness! Moreover, since the B-2s, like all other aircraft, have a series of specific missions that are carried out as part of a “mixed” force, this also underscores the likelihood of not having to actively use all B-2s at once. In sum, the B-2’s stealth makes the mission capable rate metric less relevant versus prior eras in which much larger bomber fleets with higher operational readiness were needed. The B-2’s stealth gives it higher survivability and accuracy, thereby negating the need for vastly larger aircraft fleets whose vast size was the margin of error due to higher attrition (i.e., higher risk to aircraft and crew).

While the mission capable rate is less relevant when evaluating the B-2 as a capital asset, a key or immutable factor in making the B-2 valuable is the extended useful life of the airframe. The longer an asset is in active use, the higher its Return on Investment. Given the enormous costs associated with designing, developing and producing an airframe, a longer useful life means costs can be spread over a longer time period. The transcendent if not transformative nature of the B-2 stealth bomber has made this aircraft a fungible asset (i.e., transferrable from one generation to the next) thereby enabling it to remain a frontline, go-to weapon now entering its fourth decade of service! Given that Northrop Grumman was selected as the prime contractor for the next generation stealth bomber, the B-21 Raider, it can be inferred that the accumulated experience and investment associated with the B-2 was the foundation for this contract. In other words, an imputed or implied added return on investment (in the form of a new capital project) has been derived from the B-2, which helps to make comparable future stealth projects equally if not more financially successful.


We have shown that from 1981-2020 the Northrop B-2 Spirit as a Public Private Partnership has been an economic powerhouse as measured by Income, Employment and Return on Investment while being a major technology driver across a wide number of venues. The combat success of the B-2 as measured by accuracy, survivability and efficiency has altered national defense policy in terms of resource management and strategy. All of this helped elevate Northrop into a global industry leader while increasing its equity value by 5-fold in terms of stock price. This is not to suggest it has been a smooth, easy path especially with an industry known for prolonged economic cycles. To be sure there were numerous challenges to overcome and setbacks along the way. Much has been written about those challenges by others and we would commend the reader to review the many articles and books to get a detailed account on such matters. Our purpose here has been to utilize Finance – which explains how capital is employed to create added-value and is the language of business – to gain insight and develop context for evaluating very large military capital projects like the B-2 Spirit. We see the B-2 as not only a viable if not invaluable national security asset but a technology driver that has helped advance the future.

REFERENCES Mission Capable Rate for B-52, B-1B and B-2 Strategic Bombers for 2019-2020. May 19, 2020.

“B-2: Stealth at War.” Smithsonian Channel education video. 2013

Boeing Company. Public company documents (

Cardenas, Robert Brig Gen – USAF (Ret) – Honoree of the National Aviation Hall of Fame. Personal interview (November 12, 2015) on his test flight experience with Northrop YB-49 Flying Wing.

Deptula, David A. Lt Gen – USAF (Ret). Beyond the “Bomber”: The New Long-Range Sensor-Shooter Aircraft and United States National Security –

The Value of Stealth chapter. 2015.

Dornan, Robert K. Former US Representative (California). 1977-1983, 27th Congressional District; 1985-1993, 38th Congressional District; 1993-1997, 46th Congressional District. Telephone interviews (December 24, 2013 and January 20, 2014) on B-52, B-58, B-1B, FB-111 and B-2 strike aircraft.

Grant, Rebecca Dr. The B-2 Goes to War. Iris Press (New York). 2001.

Green, William (compiler) and Punnett, Dennis (silhouette artist). The Observer’s Book of Aircraft. Frederick Warne & Co. (London and New York). 1965.

Haloulakos, George A. (CFA Charterholder). Spartan Research and Consulting Archives: Case Files and Field Notes on Military/Aerospace Industry, Military Aircraft, Finance and Strategy. 1976 – 2021.

Haloulakos, Vassilios Elias Dr. (Aerospace Engineer – Scientist – Professor and Author). Ongoing personal interviews (1981-2019) on aerospace industry, stealth technology, strike aircraft and aerodynamic design.

Haloulakos, George A. (CFA Charterholder). CALL TO GLORY – How the Convair B-58 Hustler Helped Win the Cold War. ISBN: 9780692475454. UC San Diego Bookstore Publishing. 2015.

Haloulakos, George A. (CFA Charterholder). “The B-52 Stratofortress: The ACE of Heavy Bombers.” BUF BULLETIN. Vol. 22 – No. 4 – Issue 82. Fall 2014.

Haloulakos, George A. (CFA Charterholder). HIGH FLIGHT – Aviation as a Teaching Tool for Finance, Strategy and American Exceptionalism. ISBN: 9780100727380. UC San Diego Bookstore Publishing. 2014.

Lockheed Martin. Public Company Documents (

Malyasov, Dylan. “35 Years of Lethality: ASAF Celebrates B-1’s History.” June 30, 2020. “B52 Combat Losses in Vietnam.”

Northrop Grumman. Public Company Documents ( [Historic stock price data – split adjusted].

Orr, Verne Dr. – 14th Secretary of US Air Force (1981-1985). Doctoral dissertation on the development of the B-1 bomber (Claremont Graduate University) 2005. Dr. Orr helped procure the B-1 as USAF Secretary.

US Department of Commerce – Bureau of Economic Analysis (

US Department of Defense – Combat Records of Various Aircraft

Westwick, Peter Dr. STEALTH: The Secret Contest to Invent Invisible Aircraft. Oxford University Press (New York). 2020.

White, Rowland. Vulcan 607. Bantam Press (London) 2006.

Withers, Martin. DFC, LLB. Chief Pilot and Operations Director, Vulcan to the Sky Trust. Written correspondence / research interview (April 8 – May 7, 2014) on his experience in flying the Vulcan XM607 on its decisive strike mission that changed the course of the 1982 Falkland Islands War.


As the founder of a Fortune 500 company, I view the future in
terms of what it offers for business.

But I also see that the edge of our prosperity is wearing thin. Our manufacturing base is eroding, our technology is being used more fruitfully in other countries and our reputation for producing quality products has almost vanished.

The huge negative trade balance affects our future.

I am not here today to talk about technology and manufacturing directly. What I have in mind is the quality of our workforce and how it interacts with technological advances and manufacturing methods.

How do we achieve a skilled workforce that1 s dedicated and committed?

That will seek to eliminate inefficiencies?

That will be flexible in the face of rapid product changeovers?

That will be open to new ways of doing things?

That will renew America’s reputation for quality?

I cannot generalize about what everyone that reads this article should do. But I can tell you about what has worked for me while I managed JP Industries, Inc – that showed great promise for the future.

At J.P. Industries we had a philosophy called “Better Makes Us Best.”

Let me take just a couple of minutes to describe the background of this philosophy and then I will share with you some of our success stories.

“Better Makes Us Best” is a philosophy I have followed all of my life. I have overcome adversities throughout the years by believing the following:

By striving to perform better each day than we did the day before, and by setting realistic, attainable and yet worthy goals, we can be more successful and more fulfilled. Goals stimulate us to move forward. Goals are the yardstick by which we measure our growth and performance.

My goal was to apply new technology to old manufacturing processes, to transform underperforming companies into profitable ventures. Some of the underperforming companies we acquired were in danger of losing supplier status with their customers. While that is no longer true — one division alone won 33 quality awards back then.

You can provide machinery and technology but if you lack employee commitment the formula won’t work. The buildings, the machines, don’t really do much unless people have the motivation, the desire and the know-how to do a good job. They turn it around. We provide leadership and creative management.

Some time ago, I wrote and published a book, describing the “Better Makes Us Best” philosophy, which was distributed free to all of our employees – over 8,000 people at the time.

That was important because it got the word out on the plant floor that we were serious about this philosophy. We wanted everyone to start thinking about how to be better. Then we backed up this effort by encouraging managers and supervisors to stimulate discussion at the plant level along the same lines.

We also asked our managers to file reports describing their efforts. The responses were gratifying. People actually began thinking about how they could perform their daily tasks better, about how they could improve working conditions, about how they could increase output and make better products.

They began to understand that job security is a two-way street. As a corporation, we provide jobs. The employees responsibility is to perform those jobs to the best of their abilities, to acquire training (which we provided) and to be flexible in the face of change.

I would like to interject here that one of the things our employees learned was economic literacy. That is important because the traditional employee in the United States is economically illiterate. He doesn’t understand how his performance affects the company or the economy. If he’s careless the company can lose a customer; that customer may go abroad for suppliers if he can obtain better quality parts overseas. But if that employee is careful, his company may win more business, achieving its security in the global marketplace — which, in turn, gives the employee job security.

Well, we built on the “Better Makes Us Best” philosophy the rewards were substantial. I would like to describe a few of our success stories.

I will begin by telling you what happened at the plant Atlantic, an example

A little over a year before our plant manager there decided there was a need for change – to meet the demands of the marketplace and remain competitive. We provided him with opportunities to review alternatives and he eventually selected a program the plant employees called “Real Participative Management” – or RPM, which was rather apt in the Transportation Products industry.

The crux of the program was actually an extension of “Better Makes Us Best” because it teaches employees to consider the needs of three groups:

* The investor: wants good returns on his (or her) investment;

* The customer: wants on-time delivery, high quality and cost efficiency;

* The employee: wants job security, better wages and fringe benefits and involvement in decisions affecting him (or her).

If the employees perform better each day, they influence all of these demands in a positive way.

And dramatic changes have occurred. In the six months’ time the plan has been operative profits have increased almost 100 percent at the plant; the cost of quality has decreased by 20 percent; and productivity has increased 20 percent.

Of course, one of the keys to these successes is having the proper management talent because while employees have the opportunity to influence management, the final decisions remain with management. You have to have in place or be willing to train management to have the proper attitude to influence these cultural changes within the organization. Our corporate philosophy has provided the framework for this to be true at J.P. Industries.

Another key to the program’s success is employee willingness to spend time in extensive training. Employee involvement requires education in learning to accept responsibility for change and improvement on a personal level. Again, I believe “Better Makes Us Best” provided the framework for our employees to move forward.

At another one of our plants in McConnelsville, Ohio, was operating on the team concept. We negotiated with the union to achieve a single classification for all of the 40 employees in the plant. Thus, all of them are salaried and receive the same benefits. Supervisors work as part of a team with everyone trained to perform the electrical, mechanical, set up, maintenance and operating jobs.

We provided the training –I think more corporations are going to have to take on the task of backing training programs for prospective employees if we are going to attain the kind of skilled labor we need in this country to compete in the global marketplace. In some cases in the future, corporations may even have to assume the responsibility for educating their employees in basic skills, either on their own or working with schools in their areas or regions. And I’m not just talking about vocational skills which can become outmoded more quickly than we’d like to think. I’m talking about basic skills of reading, writing, mathematics and geography.

If you can’t read, how can you operate computer controlled machinery? If you don’t know geography, how can you understand the global marketplace?

Getting back to McConnelsville, while we have experienced some start up problems with a new product line, we know our employees are dedicated. There has been no turnover. We don’t measure absenteeism because there isn’t any. Employees are working to help improve the speed of the line. And employees are working with management to set up their own shift schedules.

Now our Grand Haven, Michigan, plant begun the process toward employee participation. The managers and supervisors completed 18 weeks of training as a first step toward getting everyone involved.

I need to emphasize, however, that to accomplish this goal, you must provide direction from the top and be sure the proper atmosphere is communicated to cultivate acceptance because this is a scary idea for some employees «they have to learn how to want to be responsible. And you have to let them believe they can and should be.

We worked to help our employees understand that “Better Makes Us Best” is not distant or abstract. It begins as a personal and individual commitment that blossoms as people who believe similarly work together each day to perform better than they did the day before.

Employees working together who truly believe “Better Makes Us Best” can be a driving force in energizing the workplace across the United States.

This is my adopted homeland and I want to see America strong!

But it’s not just a personal desire; it is a belief that we can change the course of what is happening in our industries, in our manufacturing plants and laboratories. If we provide leadership, education and training – and the spirit to be better every day — we will remain competitive in the global marketplace.

The Business-Week magazine at that time in a whole page article wrote about our philosophy and the results and recommended that other companies adopt our approach.