Sunday, December 14, 2008

Competitive Disadvantage

MEET THE PRESS is a kind of wellspring of talking points, god bless 'em. I started watching towards the end of the election cycle and now I rarely sleep past 8:30am on Sundays. This morning I managed to catch David Gregory's first show as host, and he was good enough to keep out of the way, except when he was asking tough questions about Blagojevich. 

But I'm indebted to Democratic Congresswoman Jennifer Granholm for a perspective I lacked. No direct quoting, but she was arguing with some fellah with the unlikely name of Mitt Romney about the amount of money that union-negotiated benefits tack on to the cost of a car. The talking point is, I believe that cars would be $1900 cheaper if it wasn't for those darn health and pension benefits. Greedy workers! Bankruptcy would allow the auto companies to back out of commitments to THOSE leeches! (I'm both paraphrasing and extrapolating here... Romney stopped at the money and left the accusations alone.) 

So how, HOW, do the foreign automakers manage to avoid those costs? Well, Granholm points out that those other countries have universal health care, so that burden is removed from the shoulders of business. I'll add if we were willing to knuckle down and fund Social Security rather than gut it, people wouldn't rely on business for their pensions. 

Finally, at least in Japan, the car industry is subsidized by the government. Therefore, if we're concerned about the gap between what American automakers spend per unit versus what our overseas competitors spend, one solution is to stop fighting the Democrats and be willing to socialize things a little. I suspect the more attractive option to right-wing thinkers is a decade-long crippling depression. Just like it was in the thirties.

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