The Stone City

Words Made to Last

Thursday, December 08, 2005

Hair of the Dog

The usually thoughtful Kevin Drum has put the cart before the horse and calls "giddap":
It's obvious that the "level playing field" [GM CEO Robert] Wagoner is talking about would include the government taking over healthcare costs for GM's employees. And presumably, the only way to do this would be for the government to also take over everyone else's healthcare costs as well. In other words, universal healthcare.
Yes, let's fix underfunded health benefit plans by... making them fifty times bigger! Why didn't I think of that? After all, it's worked so well for General Motors! And we, the taxpayers, will still have the additional satisfaction of extending healthcare to the unemployed, and to those already retired -- so our burden will be that much heavier than anything GM ever bore.

More generally, GM's real wages [including the value of its benefit promises] have proven to be higher than the value of the cars created. This is disastrous for those counting on those promises, and for anyone feckless enough to still own any GM stock. Of course they want to be bailed out. By the magic of government, we could possibly fund this, to save those harmed by their [mostly non-culpable] failure of foresight. For one company.

We can never do this for an entire country. What a society creates is its own to spend, and no more. [At present, we are living a couple percent in the red thanks to a flood of cheap money from China. Let us assume that this is not sustainable.] GM's system was broken: it made promises that could not be kept. But Germany's system is equally broken, and there will be no bailout for them. Why should America plunge lemming-like into the same trap?