Diane Rehm had an interesting program this morning on the automotive industry, http://wamu.org/audio/dr/08/12/r1081203-23014.asx. These were the guests:
David Shepardson (DS), is Washington reporter for The Detroit News. He covers the automotive industry, regulatory affairs, and environmental issues.
Stephen Moore (SM), is a member of the Wall Street Journal's editorial board and former President of the Club for Growth.
Robert Scott (RS), is an international economist and director of international programs at the Economic Policy Institute.
Larry Burns (LB), is vice president of Research & Development and Strategic Planning for General Motors.
About 05:30 into the program DR asked SM if any of these plans would work. The WSJ has editorialized for a bankruptcy option. The $75.00 benefits and salaries was brought up.
RS talks about the above myth. He said bankruptcy worked for the airlines but probably will not for the auto companies. If the companies go bankrupt the public will quit buying cars from Big 3. The $75.00 comes from the benefits to retirees.
DR calls SM on it (09:25). He concurred that the $75.00 figure refers mainly to retiree benefits. He thinks the problem may be insoluble. He suggests that in bankruptcy the retirees could look to the Pension Benefit Guaranty Corporation (a federal program) to pay these pensions. Maybe have the taxpayer take over this obligation ($75 billion which will be more than the $34 billion the auto companies are asking for). GM will have the same labor costs as the Japanese with no defined benefit pension. If GM goes under the other two companies (because they share the same suppliers) are also likely to go under.
At 14:32 RS says the worst off states (Michigan, Indiana and Kentucky) would lose 900,000 jobs if GM goes under. They would lose 2.5 to 9% (Michigan) of all jobs. We are in the middle of a deep recession with three workers looking for each new job created. This program is cheaper than trying to create jobs from whole cloth.
Stephen Moore (WSJ editorial board) does not agree that 3 million jobs will be lost. He figures the number would be closer to a million jobs. He also believes at 19:10 that the auto companies will be coming every few months for another handout.
DS: Profitability argument?
RS (20:00): What they really need is a restructuring plan with a board that encourages the companies work together with all stakeholders (like the Japanese).
DS: Some ads are offering to sell a vehicle, and get a second vehicle for $1.00 or free. Detroit is not very good as selling small cars.
SM: We should not have corporate welfare programs.
Should the Auto Companies Be Allowed To Go Bankrupt?
By OldSouthEndBrdy - Posted on December 3rd, 2008
Tagged:
...Guaranty Corporation for their retirement, and allow the auto companies to get out from under their pension plans?
...have to come out of the PBGC if they took over the retirement plans for UAW members. I have not found it yet, but did find this interesting link, http://www.uaw.org/ret/history.cfm, referring to the beginning of a pension plan for UAW employees. I bet many here wish that such benefits had stayed the same, or never happened.
Supporting a clearly failing company with public money is the very definition of stupid.
No private company should be given public money at any rate.
Bail out GM and the rest, and they will still produce cars that get 18mpg on average, while supporting retirees with impossible pension and health-care plans. In other words, they will still be failures, but now they will cost us even MORE money.
GM is a failure. Let it fail. Its assets will be bought up at dimes on the dollar, and somebody will put those assets to work here in the USA.
Whatever happened to Capitalism? As soon as you Capitalist dweebs started taking losses, you ran to the government for your 100% Socialism like little bitches. Shame on you. You are scumbags of the highest order (well, a notch below the scumbag bankers who have setup about $4.7 trillion of their own bailouts).
Think - the government is funded (ha ha) by the taxpayers. By denying the auto industry a huge loan, you are suggesting that we not put out a burning chemical plant by dowsing it with money.
The auto industry was dysfunctional years ago. It failed to fix itself, and now it must do what all failing businesses do: fail quietly and let someone who can make a go of it step up to the plate.
.. http://mjperry.blogspot.com/2007/09/uaws-choking-health-care-obligations.... 721,025 retirees and surviving spouses for the UAW plus 200,000 middle-class salaried employees. That is 922,000 retirees that would hit the PBGC for up to a max of $4,500/month if 65. That would come out to $49.788 Billion a year. Of course, there would be no problem with health care. That would all just fall to Medicare anyways (except for those who retire before 65). Supposedly the PBGC is funded from the corporate larder, but that may not be as true as it once was.
... http://www.pbgc.gov/about/operation.html. The current corporation pays benefits to only 631,000 retirees at present. If it has to take on the responsibility for all the present retirees (or their survivors) from the auto industry that will be over 921,000 more. We'll get a chance to see how this government corporation works under pressure.
The newly elected Democrats will never allow the automakers to go bankrupt, because they could flush the UAW in a bankruptcy. Since the labor unions got them elected any bail-out is for the UAW not the Automakers.
This should point out the need for universal healthcare
Pink Slip
Schnikies, no! If anything, this points out the need for every person to control his own wealth, investments, and health care.
Had all these retired auto workers saved from each paycheck, invested in their own retirement plan independent of their employer, and selected and paid for the healthcare plan of their choice, they would be far better off than they are having relied upon someone else to manage their lives--and livelihoods-- for them.
then it should be good enough for the UAW.
Get rid of the overhead and sweetheart deals for the UAW hacks and let them live like the rest of us.
Otherwise make the Big three file bankruptcy so they can get out of these Union contracts that are raping America.
Also if universal healthcare is good enough for auto makers in Japan, Germany, South Korea, etc then it's good enough for us. (these countries have unions too)
Pink Slip
The current health system is thriving.
So you suggest we put millions of Americans out of work in a thriving industry in order to prop up a failing industry?
What's next cut off our arm to cure an infection in our finger?
MikeyA
The current health system is thriving.
Who is thriving? Insurance companies
Pink Slip
The current health system is thriving.
Who is thriving? Insurance companies
Pink Slip
Who is thriving? Insurance companies
Ain't that the truth.
Currently Dental Hygienists make the most money of any profession that requires an Associates degree.
Registered Nurses have been in the top 3 of future outlook for jobs for the last 5 years.
These are jobs that people can get without a bachelor's degree, can go anywhere in the country with, and make work and financial demands.
By no means are these rich CEO's or Doctors yet they are benefitting more from the American Medical system than anyone.
Does the prescription drug costs need to be reformed? Yes, but these are invariably linked to what Medicare and Medicaid charge.
MikeyA
Pink, you seem more than willing to give up some of the best healthcare in the world just to save CORPORATIONS money. When will Democrats get out of bed with the huge corporations?
Why Universal Healthcare DOES NOT WORK.
God forbid you need to have an MRI in Canada.
"Those surveys suggested Canadians waited, on average, 47 days for non-emergency MRIs in 2003 -- up from 39 days two years earlier."
Apparently, the articles say that the city of Pittsburgh has more MRI machines than the entire COUNTRY of Canada.
http://healthcare-economist.com/2008/02/11/pittsburgh-has-more-mri-machi...
http://www.lufa.ca/news/news_item.asp?NewsID=4414
http://allnurses.com/forums/f287/average-wait-simple-mri-canada-3-months...
As an American, I will never settle for what's good enough for the South Koreans, Germans, and Japanese.
Chrismyers,
You need to add a way to vote on posts. This statement by HelenWheales is the winning post of the day.
Neither will I Helen. But first we have to catch up. Currently we rank behind many countries that have universal healthcare, according to the World Health Organization
Pink Slip
The US medical system comes up with more treatments, medications, and procedures than any other country.
This is because our medical system offers the most training and the best compensation. Universal healthcare would remove both of those and eventually the motivation behind what creates actual medical results.
MikeyA
Universal healthcare would remove both of those and eventually the motivation behind what creates actual medical results.
How exactly?
Pink Slip
More patients means government bureaucracy. Government bureaucracy leads to waste. Waste leads means less money available which means less care allowed. Doctors, nurses, even the security guards don't work for free.
There is no way it works unless it's governmentalized. Governmentalization takes all the companies and does away with them under one banner. The without competition there's no need for a lot of the jobs. Off the top we can get rid of marketing, there's people out of work.
Well as long as we're taking over the insurance companies lets take over the drug companies and get that under control, more people out of work.
And since there's no need for competition between hospitals then we can get rid of the smaller urgent-care places because we already have a free emergency room, more people out of work.
I'd be willing to bet we're in the millions of unemployed americans already.
Plus there goes our medical schools. Without the high paying returns doctors get then there's less lure to getting high college loans. So medical schools drastically cut their med school staffs due to less students. Since most of our research is done at the med school level there goes the next big break throughs in medical research.
All to fund a industry that can't adjust to it's own needs.
MikeyA
Government bureaucracy leads to waste
So does corporate bureaucracy. In fact, Medicare (for instance) has much lower administrative costs than private insurance companies.
And since there's no need for competition between hospitals
Why wouldn't there be competition among hospitals? No one's suggested they get nationalized.
Plus there goes our medical schools
Says who? Why?
Without the high paying returns doctors get
Doctors aren't as well paid as you may think. Except for maybe specialists. You're creating straw-man after straw-man...
Pink Slip
A "threat to our political system"
How do you do it without putting people out of work or governmentalizing it?
MikeyA
Putting the government in charge would put MORE people to work in the bureaucracy! They'll need more people to sneer at you, file, shuffle, lose data, etc...
According to the World Health Organization--probably the only semi-respectable arm of the United Nations-- we rank 37th in health delivery systems, first in expenditure per capita, and 41st in life expectancy.
Considering what I know about the health insurance industry, I would argue that we've got more than a little catching up to do.
Universal health care is not the means to that end.
Social conditions can be blamed for a lot of our health woes: One one level, our prosperity. At the other, our poverty. People eat a lot more than they did even when I was a kid. My parents ate three squares a day, no snacks..pop and chips were treats. Today people seem to have to eat constantly....and what they eat in relation to calories burned is responsible for the majority of health problems in our country.
The prosperous eat out often. They can afford to stock their cabinets with snacks. The poverty stricken eat the foods that are cheapest, and those are often processed foods instead of REAL food.
Just as people need to be responsible for their own health and make choices accordingly, they should be responsible for their own health care and make choices accordingly.
The insurance AND health care industries could stand to be reformed, but not put under government control...
I hold the government responsible for furthering and festering poverty in this nation through a welfare system that allowed men to abandon women and children without bearing responsibility, nor shame. It subsidized the birth of babies as an income generating model (Louis Farrakkhan's words).
The government created the problem like a bull in a china shop. I wouldn't send the bull back in to clean up.
Helen, it's your very anti-government stance that's put our country in the pickle it's in. To paraphrase PJ O'Rourke, conservatives say government doesn't work and then get elected and prove it. There's a difference between advocating for big government and effective government.
Pink Slip
Five stars for HelenWheales.
Here's the way I'd fix healthcare.
At the state level or lower (yes our counties and cities could even do it) instead of penalizing small businesses with an unfair tax, give them the option to be taxed.
Any business that pays for a basic healthcare plan for it's workers doesn't get taxed. Those that don't get taxed. That money is rolled over into a seperate trust (free of politicians hands) that trust pays for a BASIC healthcare for lower income workers. It is up to the workers to get additional coverage (which they never do cuz a new car is more important to them). The coverage comes from bids from major insurance companies (lowest bidder just like all other gov't contracts).
So those who make the lowest incomes yet work are covered by a basic coverage. We have just considerably lowered the largest section of the population not covered by medical insurance(18 to 28yr olds).
The elderly still have Medicare. Children still have Medicaid. And we have GREATLY reduced the tax burden on the rest of the country... if we keep the same funding on those two programs then their coverage will expand. But if we instead take that extra money, again put it into an interest bearing trust, we reduce the tax burden on not just this year... but next year as well. All while keeping healthcare privatized, competing, and thirving and it has NOTHING to do with the car companies.
MikeyA
Halliburton and Bechtel are not "all other gov't contracts". What you're talking about would be monopolized by a few industrial players and the price would NOT be the minimum.
Again, leaving us to the tender mercies of ANY insurance company is insane. THEY are the problem, by placing profits at a much higher priority than any service. The profit motive here is what's standing in the way of a universal diagnostic service. By making basic care part of a government system, the rest of the service industry is free to use the profit motive to innovate as you so love.
All health care is rationed. Rationing always happens by PRICE or by AVAILABILITY. We just happen to ration ours by price. Universal care will ration the other way ... but basic service will still be rendered, and we don't have to wait for little problems to turn into big problems, which become MANDATORY to fix in Emergency Rooms, and are thus hugely expensive.
"Halliburton and Bechtel are not "all other gov't contracts"."
It takes an IG of a government branch to accept a contract without bidding. Is the process perfect? No. But there is oversight. In those cases where a contract is accepted without bid it is normally short term and due to an extenuating circumstance such as - already established relationship or - little to no other contractors can meet the need.
MikeyA
Oversight that results in no redress whatsoever, just isn't oversight. Halliburton and Bechtel have made astonishing billions off of the U.S. taxpayer. We can't bring them to justice since they effectively own the current Presidency. And there's no guarantee that the same thing won't happen with the President-Elect. Just by looking at his list of largest donors, we can see who he really works for.
So-called competitive bidding for our national health care will be equally fraudulent. Again, leaving the nation to the insurance companies is a huge mistake.
Of course, THIS is yet another huge mistake:
The Disastrous Daschle-Obama strategy to "fix" health care
http://directorblue.blogspot.com/2008/12/revealed-daschle-obama-strategy...
That's the bureaucracy-ONLY approach that you are so set against. It only makes sense to be against such a plan.
Toyota opens new plant in Ontario---good for 1,200 jobs. One of the main reasons Toyota chose Canada? Healthcare costs.
Canada's other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States.
Pink Slip
A "threat to our political system"
Notice how it says "national" health care system.
Again I challenge anyone to find how we could have a "universal health care system" without creating a government bureaucracy.
MikeyA
We already have a huge bureaucracy, in the interface between hospitals and insurance companies. Why are you A-OK with that monstrosity -- since it helps make the USA the #1 in the world for per-capita costs -- yet are opposed to a government one?
nm
MikeyA
MikeyA-
There is one competitive element you have forgotten to mention:
The competition between maximizing company profits vs the attempts to actually provide you coverage and care. It is in the insurance company's best interest to minimize costs and maximize profits, which includes making decisions on what they won't cover, what claims they reject, and what barriers they put in place in order to not fill claims. They have major incentives all along the line to NOT actually fund the best care.
I think that the need for universal care will only become more heightened in the future, as economic pressures on private businesses to compete on a global scale magnify needs to minimize costs all along the supply chain. I also think that, as the insurance companies continue to pinch doctors on both ends, from limiting how much they will compensate doctors to skyrocketing malpractice, at some point medical professionals may choose to organize and push back. And frankly, there isn't a whole lot we could do about it.
They have major incentives all along the line to NOT actually fund the best care.
All the more reason to find ways to INCREASE COMPETITION.
MikeyA