U.S. health care and the auto bailout

http://blogcritics.org/archives/2005/10/23/133602.php

This blog post was written 3 years ago but it's amazingly relevant today.  Would we be discussing a bailout of GM and Ford today if national health insurance had been adopted just a few years ago?   

When we criticize the Big 3 for not being competitive, let's remember that all their competitors enjoy: (1) state-funded health care for their workers and retirees (except in China); (2) state investment in their companies; and (3) non-reciprocal trade regimes, which protect their home markets against U.S. imports. 

So, in that context, what is the economically "fair" thing for Congress and U.S. taxpayers to do? 

The issue of national health insurance is especially important.  If you believe pundits like Michael Barone, it's health care costs that are killing GM.  That is, if GM were not solely responsible for paying the health care costs of its current and retired employees, it would not need a bailout right now.  So why aren't we debating a system of national health insurance right now, instead of debating a bailout of the Big 3?  If we want the U.S. auto industry (and other manufacturers) to be competitive on cost in the long run, they must not be burdened with health care costs of their employees.  Or, if employers will continue to be responsible for paying the majority of their employees' health care costs, Congress must adopt radical reforms to drastically lower the $2 trillion annual cost of health care in the United States.

This is not to say GM and Ford don't need to make big cost cuts and other changes to remain competitive.  But those are all changes that good managers are able to make.  Even the most excellent managers cannot overcome the high cost of U.S. health care.

Unfortunately, the situation is now critical, as GM will run out of cash in a matter of 1-2 months, and its survival won't wait for a fractious and bitter national debate over health care reform.  If we're going to save GM and Ford, we have to do it in the next several weeks.  We'll have to talk about reforming our health care system later.  But talk about it -- and act -- we certainly must, for the sake of America's global economic competitiveness.