Barack Obama Otold the Detroit Economic Club that “the auto industry is on a path that is unacceptable and unsustainable“ because of its fuel inefficiency and the high costs of health care for employees and retirees. He proposed to let the government take on some of those costs if the industry would produce more efficient vehicles.
On one hand, this is a politically smart exchange. Detroit claims that these healthcare costs are the reason why they are losing out to Toyota in sales, in fuel economy, and arguably in quality and design. There is little doubt that those costs are high, certainly higher than for companies based in nations with national healthcare and fewer retired American workers.
On the other hand, I have a hard time believing it would cost that much to increase fleet fuel economy. I suspect that the intransigence of the Big Three has more to do with historic and financial ties to the oil industry and a lack of imagination that also explains their falling marketshare globally and domestically. They keep producing cars that people wanted last year, with fuel and maintenance demands that match those of yesteryear, and then want the government to bail them out. The days when “what’s good for GM is good for America” are long gone, and there’s no need for taxpayers to subsidize Detroit’s failure.
A plan like this would be necessary to get legislation passed, but Obama passed up two important opportunities by proposing this plan this early and in this much detail. First, if he wins, he’ll now have to negotiate from an opening position that already gives Detroit most of what it wants. Taking a tougher stand, and demonstrating a willingness to negotiate subsidies in broader terms would have left him a tougher negotiating stance and probably wouldn’t alienate anyone who isn’t alienated by the more detailed proposal.
Second, he missed a chance to leverage this into a push for comprehensive health insurance reform. The costs of retired auto workers are also problems in the other blue collar industries with a history of effective unions. Airlines, steel, and mining are the examples that come to mind of industries which have used retiree benefits as key negotiating points and key arguments in decisions to move operations abroad. Dealing with GM’s costs but not Bethlehem Steel is not the visionary approach I’d like to see from Obama. I know he’s capable of more.
We need national healthcare. We need it because it’s immoral that we allow working Americans to die of untreated disease, and it’s immoral to think that working Americans have to rely on emergency rooms for their primary care. It’s also inefficient. Emergency room care is expensive care. People who can get routine care from a primary care doctor head problems off before they need an ER, and have a better quality of life. We also need national healthcare because the system we have is making American companies less competitive.
Bridging between society’s need for insurance against illness and our need for insurance against a changing climate could have made a powerful hook for Obama’s speech. Obama could have used auto industry support to lay the groundwork for a national healthcare plan in exchange for their commitment to fuel economy standards.
That might not have allowed the level of detail he offered, but it would have highlighted the principles involved more clearly. To my way of thinking, those principles are what matter most this early in the campaign. It would demonstrate a commitment to environmental concerns, economic competitiveness, social justice, and the need to for policies to benefit all involved.