Not "Healthy" to Just Point Fingers in Bailout

Decades ago the American auto industry was feverishly reconverting their tank and machine gun operations back to the production of automobiles. Between 1940 and 1945, the American automobile industry produced $29 billion dollars worth of military equipment to defeat Germany and Japan and at war’s end the big three of the industry, GM, Ford And Chrysler, were gearing up to become the biggest and most profitable companies the world had ever seen. Their dominance and success became a staple of the American economy, but just yesterday, the top execs from these same three corporations, came a courting to the American taxpayer to help keep them afloat.

It is natural to search for one explanation for the downfall of these corporate giants and it would be nice if there was only one, but the complex world we live in is not so kind. Some emphasize how hard times have been brought on by labor costs, while others highlight the industry’s longstanding resistance to innovation and change. Regardless how one may frame their explanation, everyone seems to agree that the big three cannot survive without radical change and the real question for us and lawmakers is whether or not to extend them a corporate lifeline. In considering this question, while many seek to punish the big three as well as their union, the UAW, for the wrongs of the past, we mustn’t ignore the systemic causes and implications of their instability, or even failure.

The big three, like countless Americans, businesses and the United States government itself, have been hit hard by the rising cost of healthcare. When the big three were in their heyday in the 1960’s, it is unlikely that anyone foresaw the increases in healthcare costs we face today, with the price of each GM car including $1500 to cover these costs. This cannot be blamed on greedy unions and irresponsible executives, as the burden of healthcare costs extends beyond the big three to finance departments and kitchen tables across the country. These costs are a function of a wider problem that plagues numerous businesses and individuals – our broken healthcare system.

While the $25 billion bailout can’t do anything to control the healthcare costs for the big three, nor will their failure in its absence. The rising cost of healthcare in this country cannot be mitigated by negations in a bankruptcy court, by a change in leadership, or by building hybrids. The fact is that in 10 years, the cost of healthcare to American business had increased 140% and the big three are far from the only ones hurting. Moreover, if benefits were to be dissolved in the event of just one company going under, the nearly 2.5 million Americans who would lose their jobs would put incredible pressure on the strained public safety net, which is already burdened by its own healthcare cost woes.

As lawmakers consider their position on helping the big three, they would be wise to take note of one thing that the government can do to help them in the long-run without giving them a dime in handouts. Profound healthcare reform that addresses healthcare’s rising cost would be the greatest gift that Washington could give to the big three and the American economy as a whole. If a $25 billion bailout or the struggles of three hallmarks of American industry can’t get their attention on healthcare reform, what will?