It looks as if Detroit may get its bailout after all.
If a reluctant Congress approves, the Big Three automakers could get $15 billion in short-term loans, following in the footsteps of banks and brokerages that are receiving $700 billion in public assistance.
Like many taxpayers, I’m angry at having to come to the rescue of greedy and incompetent corporate executives, but they seem to have us over a barrel.
Without the Wall Street bailout, the credit squeeze might have cost even more Kentuckians their jobs and savings and left the state with an even bigger budget deficit. A Detroit meltdown could wash away thousands more Kentucky jobs, from the Corvette plant in Bowling Green to the Ford plants in Louisville and dozens of parts suppliers across the state.
How did we get into this mess? Corporate greed and incompetence, for sure, as well as some irresponsible consumers. But I keep thinking that we could have avoided this crisis if government had been doing its job for the past eight years — if not the past quarter-century.
While we’re fixing the economy, it would be useful to have some sober discussions about the proper relationship between business and government. For decades, some politicians and big-money special interests have reduced that discussion to simplistic sound-bites: Business good. Big business better. Government bad. Government regulation very bad.
Government doesn’t create wealth, business does. Capitalism is the world’s best economic system because of human creativity, entrepreneurial spirit, enlightened self-interest and the nimbleness of business people to respond to the market’s needs.
But for capitalism to succeed over the long haul, it needs a fair and healthy marketplace where government sets some boundaries and enforces rules. Business people are the first to say that their job is to make a profit for their owners, not watch out for society’s best interests. That’s government’s job.
The Wall Street meltdown can be traced to greed and abuse made possible by deregulation and lack of government oversight. And if government had pushed harder for tough fuel economy standards — or helped fund innovation the way Japan has done with its automakers — the Big Three and the rest of us would be in a lot better shape now.
Honestly, I’m almost as concerned about government “oversight” of the auto industry as I am about government’s apparent lack of oversight of the financial services industry, which is getting nearly 50 times more money with few strings attached.
Government isn’t suited to running a business; it’s too bureaucratic and political. Of course, some would say the same about big corporations, especially public corporations more focused on short-term gain than long-term sustainability. Anyone who has ever worked for a big corporation knows why the comic strip Dilbert is so popular.
Some government regulation is essential; otherwise, our air and water would look like China’s and investors would have even less confidence in the safety of our financial system than they do now. But examples of overregulation are easy to find. Just ask any health care professional who deals with the well-meaning but nightmarish federal privacy law known as HIPAA.
As the nation feels its way toward a new relationship between government and business, a good subject to consider is health care.
Unlike in most industrialized nations, our health care system is left largely in private hands. Health care costs have traditionally been borne by business, although, as those costs have risen dramatically, companies have shifted more of them to workers.
The United States spends 16.5 percent of gross domestic product on health care — much more than any other nation — and that figure rises every year. Yet we have an inefficient system where an estimated 47 million people are uninsured and many families are just one serious illness away from financial ruin.
Why should businesses bear that burden? If government took more responsibility for managing health care with private providers, many people think both quality and coverage could be improved. Freed from those benefits burdens, companies could be more competitive globally. Plus, think of the entrepreneurial potential that could be unleashed if so many workers weren’t tied to jobs they hate by fear of losing health care benefits.
Of course, any attempt at change will be vigorously opposed by the health care industrial complex, which profits from the current system’s inefficiency. It will raise fears about “socialized medicine,” even though public-private systems such as Medicare, while hardly perfect, have worked well for decades.
Like many Americans, I’m uncomfortable with government trying to manage big business. But if government would use this opportunity to learn how to do a better job of governing, we might be spared more corporate bailouts in the future.