A better auto industry bailout

PHOTO: General Motors HQ

I’ve written a letter to Congress asking them to not bailout the faltering American auto industry. I’ve also written a post explaining you why I think the same industry deserves its date with the dustbin of history.

I guess you could consider me an ardent opponent of any bailout of the Big Three. But sometimes an idea comes along that forces you to change your deeply held convictions. I want to thank Atrios for turning me into a bailout supporter with his brilliant idea:

…if we’re throwing around billions and trillions of dollars we might as well get something good. Instead of writing a big check to the auto companies or loaning them money we could, you know, enroll all their employees in the new national health insurance system.

There are a lot of rich organizations that are invested in the status quo, often to the detriment of our wider society. Our ridiculous copyright laws, the barriers against importing prescription drugs, cities totally designed around transportation by cars, cars designed without an eye toward fuel efficiency are some of the things that come immediately to mind.

But one of the biggest problems we have is that our health care system combines the worst of government intervention and market forces. Our government is not allowed to use its size to bargain for lower prices, therefor we pay – in taxes – exorbitant prices for medicare and medicaid patients. Meanwhile the market side is systematically denying insurance to millions while pushing up the costs on who it still covers. And unless you’re stupendously wealthy, or ready to sell your house and take out loan after loan, your insurance company has veto power over any treatment you might need.

This economic crisis gives us the opportunity to push all these entrenched powers aside. The status quo has led us to dire times, and we need to prepare ourselves to compete and thrive in a world where other industrialized nations long ago realized the benefits of universal healthcare, and energy efficient transportation.

Flickr photo by Ahren D


  1. Ian

    Completely missed the logical steps from A to B there.

  2. Ian

    So I figured maybe I would need to read the article you link to to make sense of this. Yeah… that site is horribly laid out.

    So, I would say the auto industry is separate from the health care industry, and should remain so in our government’s eyes. I think the issues are also completely separate from the ideological blogger viewpoint as well, but maybe that’s just me.

  3. Chris

    You’re right. I kind of left some big assumptions out of my post. I think it’s widely accepted that medical costs are drowning American industry and it’s especially bad for the auto industry that’s made guarantees to the unions about level of care.

    By moving medical care to the government, that frees up ~$12,000 per employee. The auto industry employs tons of people, so this would in essence be a bailout by different means. Plus, it could prove (or disprove) the promises of universal single payer coverage.

  4. Ian

    OK, so you suggest using the auto industry workers as a trial set for a national health care system? So you would still shift the burden of the auto industry’s problems to the taxpayer. I don’t know, I would rather just see our government hack through the bureaucracy associated with the health care industry and limit lawsuits against doctors and hospitals. Streamline the whole entire system and subsidize it. Set in place new laws about insurance companies being able to deny treatment. I think universal health care is a good idea, but I don’t know how it would pan out. Our government screws up everything it touches (Hurricane Katrina, Iraq, Afghanistan, Social Security, etc etc.) and I just don’t trust them to provide adequate, affordable health care for everyone in this country. I think a free market system could work fine but we have to figure out ways to cut down on the costs of health care, not just pay taxes through the nose for it. McCain’s idea was stupid cause it wouldn’t change the industry in any positive way. His plan wouldn’t treat the cause of the health care industry’s problem, it wouldn’t even be a band-aid on it. We need a fundamental retooling of how it all runs.

  5. Chris

    By moving to a single payer system you already are streamlining the process. Instead of dealing with a myriad of insurance providers, you have one. Medicare has already moved to electronic documentation while other insurance providers spend millions on preserving and shuffling around papers.

    Sure our government screws up a lot of things, but it gets a lot of things right too. Think about the planning and work involved in invading Iraq in the first place. We were able to take over an entire country in a matter of days. Some of our cities have incredibly complex and yet efficient public transportation. Somehow the government manages to send out Social Security checks. And so on.

  6. Ian

    Competition is supposed to drive the price down and provide innovation. Otherwise you have a monopoly and there’s no reason to have competitive prices or make a better product (in this case, cheaper more effective health insurance). You simply need regulation to ensure that the health insurance companies can’t focus so much on profit that they ignore the well being of their customers. I agree with you about electronic documentation, but that is more a hospital to hospital thing. The hospitals themselves don’t want to invest in a new electronic system. I think the pharmaceutical industry needs to be more regulated as well. I understand that profit drives drug development and companies invest incredible sums of money into developing drugs and deserve to be able to recoup that. Drug companies should not be allowed to repackage two existing drugs as one and get a new drug patent. They shouldn’t be allowed to lobby doctors, nor should they be allowed to advertise in mass media. A patient can’t prescribe themselves these drugs, they can’t go buy them off the shelves, thus they shouldn’t be advertised to. I’m not arguing for patient ignorance. I’m arguing against a hypochondriac culture and people who think that some magic pill will cure all their ills.

    The whole thing is a tricky balance to strike since you ideally wouldn’t have people profiting off of curing diseases at all, but if that were the case no one would do it.

    Also, I cannot believe you just praised our military strategy in any phase of the Iraq War. They don’t get credit for getting under 1% of the war right and failing to prepare for the other 99%. Iraq was a house of cards anyways since it was beat up from Gulf War 1 and drained of any vitality by sanctions. The plan to blow up Iraq had been complete for years, as there probably already exist plans for countries like Iran (I believe this has been confirmed). Regardless, you basically praised our government’s ability to trash something, not to make something useful.

    I’d commend some cities on their public transportation systems, but you have to admit it still takes an inordinate amount of time to travel a relatively small point to point distance. Its also not always so cheap to hop on the subway for say a few (5+) blocks. Regardless, this is local and state government, and not so much federal planning.

    Also, social security as it stands now won’t be around forever (Incoming Baby Boomers). Its already not a whole lot of money. I know every bit helps, but social security certainly isn’t something you can retire on. Not claiming it should be, just pointing out the obvious.

  7. Chris

    Competition should drive the price down, but here it doesn’t. The healthcare market is far from being competitive. As for innovation, most of that takes place as a result of government grants and University research. Drug companies spend twice as much on advertising as they do on R&D, and they’re allowed to profit immensely from the innovations made with tremendous help from the Federal government.

    Electronic documentation *is* a problem for insurance companies. They handle just as much of our personal data as hospitals.

    Regardless, you basically praised our government’s ability to trash something, not to make something useful.

    The military itself is an organization of incredible usefulness. Maybe a better way to put my point, we can trust our government to protect us and use devastating weaponry, but we can’t trust them to provide an alternative to private health insurance?

    It’s a silly argument anyways, since we already do through Medicare. The system is in place, it just needs to be scaled.