Saturday, November 22, 2008


The auto crisis as symptom of failed corporate-government alliance

by Larry Geller

Bush (remember him?) is apparently in Peru talking up the benefits of free markets: “Our nations must maintain confidence in the power of free markets,” he said.

Never mind that “free market” means the government will bail out the catastrophic failures that it has made possible by removing regulations on its favorite businesses. With the unresolved financial crisis still upon us, now the automakers are lining up at the public trough for their taxpayer-funded bailout. It’s not a simple thing, though, because the jobs, pensions and healthcare of auto workers and their families are involved. They are at risk because of “free marketeers” like Bush (not to let Clinton off the hook either).

Here’s a discussion by Kevin Zeese, The Auto Bailout Shows the Failure of Corporate-Government More than the Failure of Detroit. I’ll snip out part of the article discussing health care, since I think that is one of the things we’ll have to push Obama to fix:

The Causes of the Auto Crisis

Corporate-government created the three major causes of the auto industry crisis: health care, the credit crunch and low efficiency cars.

Health care is an out of control cost where double digit annual price increases are more common than rare. While other industrialized nations have controlled the cost of health care, the United States has not. President Truman called for a single payer national health insurance plan many decades ago, but the Congress has been unable to show the will to face-up to the issue because of the power of the health insurance and pharmaceutical industries. While health insurance is on the Obama-Kennedy agenda, they are still not challenging those industries as they should and not confronting the real problems.

Every business small and large has struggled with paying the health insurance costs of their employees. It has held back hiring and holds back wages. A mega-corporation like General Motors sees those problems amplified. It would not be unfair to describe General Motors as a health insurance provider who happens to make cars. GM spends $5 billion annually on health care for 1.2 million people – only 150,000 of whom work for the company. GM, Ford and Chrysler have a combined unfunded retiree health care obligation of more than $90 billion. Health care adds $1,500 to the cost of each vehicle. This reality alone makes it virtually impossible for GM to have a successful economic model and it is not something GM can fix. Health care is a major problem not only for the auto industry, but the airline and steel industry as well as businesses of all size. The failure of Congress to face up to single payer health care is becoming a threat to the American economy.

Please check out the full article for more on the automakers’ crisis.

[Kevin Zeese is Executive Director of the Campaign for Fresh Air and Clean Politics ( whose projects include Voters for Peace (www.VotersForPeace.US., True Vote (www.TrueVote.US and and Climate Security ( He is also president of Common Sense for Drug Policy (]


Good points Larry. I remember when the big three auto makers were lobbying so hard for NAFTA, for 'free markets.' But allas, here they are lobbying for socialist government funding and intervention to stay afloat. In the meantime they have been turning out JUNK. We could have long ago had safe hydrogen burning engines in these cars, but we don't by design. Instead we have cars from the likes of Ford with plastic parts in the engines, engineered to breakdown and require more service. These guys are bunch of scumbags. I started buying Honda's and Toyota's years ago. I love my reliable Toyota.
Aloha, Brad

Here's an interesting article from 2006 by Malcom Gladwell about the historical roots of GM's financial crisis:

It boggles my mind that US corporations - and small businesses for that matter - are not on the front lines demanding a single-payer health care system. I can't quite figure out why they're not. Sadly, I don't think we're going to get it until they do.

I know that a few years ago Andy Stern was pulling together a coalition of unions and big corporations like WalMart to create a united front for health care reform, but I'm not sure where that went or what they've been up to. At the time, I got the sinking feeling that single-payer was off the table for the group from the get-go.

Do you know anything about that Larry?

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