Sunday, November 23, 2008
GM, Wal-Mart, disappearing pensions and health care
by Larry Geller
Katy Rose posted a comment to my recent auto crisis article which deserves greater visibility than a mere comment would get:
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?
I did write about Wal-Mart’s coalition here but did not follow up. (sigh!) There’s so much to follow and so little blogging time…
Along the way I’ve remarked that considering all the money corporations give to politicians as
bribes campaign contributions, you’d think they could get universal health care in a wink. It would not only take health care expenses out of the corporate budget but it would sweep the issue off the table during labor/management negotiations. Now that corporations are feeling better about the benefits of “socialism” for themselves, perhaps they’ll allow a little “socialism” for everyone.
The New Yorker article that Katy links above is an interesting read, with background from the 19
The article is dated August 2006. More than two years ago the author wrote that…
America’s private pension system is now in crisis. Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish. General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises.
So back then GM was 40-50 billion behind in its pension obligations. There’s that casual use of “billion” again, like it was 49 cents or something. You’d think this would have caused people to get upset big time back then. But no. Maybe GM figured it could escape its obligation or get bailed out or something. You know, tell the government it was too big to fail. Would we have laughed then? Now we know. Only the little guy is allowed to fail.
There is no rush to bail out the automakers. This can be left until the next administration comes in. Although I’m prepared to be disappointed, still, I hope that Obama will work something out that takes care of the little guys. You know, Joe and Jane Automaker.
This is depressing. Please go read the New Yorker article Katy linked to, stay informed, and see you later.
I still can’t get my head around this concept that corporations can just blow off the pensions that they presumably) agreed to in a labor contract- why is a contract not a contract...
People break contracts all the time if it is economically feasible for them to do so. That is one of the special properties of Anglo-American contract law. I think the real question is, why did we leave this important social security function to the market place and the contract law system at the outset?