Friday, September 22, 2006

[Hello all--this is Tom Hilton, from If I Ran the Zoo. Many thanks to Steve for the tremendous honor of guest-blogging here. And what Skimble said--have a safe and pleasant trip!]

Following up on Skimble's post about why Republicans are bad for business, I'll recommend Malcolm Gladwell's New Yorker article on dependency ratios. (It's not nearly as eye-glazing as it sounds; trust me on this.) The basic premise of it is that any economic system depends on a good ratio of people producing to people being supported. Here, today, that is particularly applicable to health care and pensions.

Gladwell tells a heartbreaking story about UAW president Walter Reuther wanting industry-wide pensions for auto workers (to spread the risk as widely as possible), and GM CEO Charlie Wilson--fearing the combined unions' power--instead offering a fairly generous pension to GM workers. That was fine as long as there were lots of workers for every retiree, but increasing life expectancy and productivity innovations meant, respectively, more pensioners and fewer workers supporting them. Perversely, GM's pension burden meant that increasing productivity--making more cars with fewer workers--put it in a worse and worse financial condition.

And the moral of the tale:
Under the circumstances, one of the great mysteries of contemporary American politics is why [current GM CEO] Wagoner isn’t the nation’s leading proponent of universal health care and expanded social welfare. That’s the only way out of G.M.’s dilemma. But, from Wagoner’s reticence on the issue, you’d think that it was still 1950....

...if you pooled the obligations of every employer in the country, no company would go bankrupt just because it happened to employ older people, or it happened to have been around for a while, or it happened to have made the transformation from open-hearth furnaces and ingot-making to basic oxygen furnaces and continuous casting. This is what Walter Reuther and the other union heads understood more than fifty years ago: that in the free-market system it makes little sense for the burdens of insurance to be borne by one company. If the risks of providing for health care and old-age pensions are shared by all of us, then companies can succeed or fail based on what they do and not on the number of their retirees.
That's the bottom line: the current 'system' (or absence thereof), in which each business is wholly responsible for its own healthcare insurance and pension plan, is hurting business.

Skimble notes the beginnings of a shift in business, from reflexively supporting Republicans to supporting the party that is actually good for (most of) their interests. I think we're on the brink of a similar shift, toward embracing benefits systems (like single-payer healthcare) that rationally spread the risk among the largest possible pool; and I think once business is pushing it, that's when we'll finally get healthcare for all Americans.

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