Economic Inequality - Some truths about Health Care Reform

I recently posted this message as a response to a Blog Post by Roger Ebert of the Chicago Sun Times.

What?

You don't read Roger Ebert Movie Reviews? Furthermore, you don't read his fantastic blog? I highly recommend it. My response was tailored to a specific individual, yet I think it's appropriate to share it with everyone. Feel free to comment on it as you want.

I did make one mistake below. I transposed Toyota and Nissan in the Family Care Segment Sales. Toyota is #1 and Nissan is #4, behind Ford.

Having worked in Manufacturing as well (I feel I had to answer), I can tell you why it's cheaper for Toyota or Nissan or others to manufacture their cars oversees and then import them. Legacy costs, as you briefly mentioned in your piece. These are the things that GM and FORD and Chrysler pay for when a worker retires. But, as union costs have escalated, some of the current worker's costs have also been rolled into this accounting process. So, a $22,000 car becomes a $28,000 car, and the Japanese beat it on price.

But, it is not true that all cars are manufactured oversees. Nissan, Honda and Toyota, respectively, number #1, #2 and #4 in the mid-size car segment (family car) all manufacture that car in the USA. So, how can they do so competitively and still pay the American worker their Health Insurance AND a competitive wage.  It's not just the lack of a union.

The answer to the question posed by the first paragraph can be found in the social fabric of the countries were these cars are manufactured - Japan, Korea, etc. They have a social contract with their citizens, and although the companies profit in the great materialistic way that big Capitalist companies tend to profit in, the employees have health insurance that is supported by the National State. They also have some sort of National Pension system that works in conjunction with the company's pension system (sort of like Social Security on steroids). It works so well for them, that the living wage can be a lot more competitive that what an American worker makes. I don't begrudge the American Worker anything. Either alone or through unions, the American worker managed to raise himself to the middle-class and achieve a status that even in the middle of the 19th century it was unheard of. Yet, that drive and that competitiveness did not translate in the boardroom where the CEO and the share-holders, only cared for profits and more money.

Someone stated in a post earlier that companies are leaving certain areas because of higher taxes. That is Government's fault. That is the burden that Partisanship in Washington has placed on all of us. As I have said, CEOs care little for the productive middle class who helped them achieve their results... I am not making an all encompassing statement, not all CEOs are the same, and yes, I think you should earn what you deserve. But how much is too much? Why do you need $20Mil to run a company? I bet I can do the same job for $500,000 and no bonus.

And to answer the question posed by the second paragraph, unions have not ruined America, I don't think that at all. Yet, somehow, in factories that foreign manufacturers have opened in the US whether unionized or not, they managed to build the same or better product than their equivalent American counterparts. Why is that? These are American workers at both places. It must be the underlying economic factors, both at the companies running the places AND in the society. (And please, don't give me any bull-crap about "Government Motors" and all that -- that just happened and does not apply in this situation).

Yes, we don't manufacture anything in this country, but whose fault is that? Each and everyone of us needs to look in the mirror before answering this question, even more so if you're a CEO or a share-holder. I don't advocate the buy-American line, but think about a culture that places such a high-value on the low prices one can find at the "low-price leader" Wal-Mart. How is Wal-Mart to compete AND make a profit for their CEO, board and share-holders without manufacturing everything oversees? Where there is no regulation, or GASP, they don't have to pay the workers "HEALTH INSURANCE PREMIUMS" or "401K (pensions)" and other benefits.

So what can the great equalizer, the Government, do for us? Lots of times I've pondered why they don't slap tariffs, on imported goods, from countries who willing game the system and flood the US market with cheap goods. And then there are times, such as last year when President Obama, did slap a tariff on unsafe Chinese Commercial Truck Tires. But the only way to expose trade imbalances and other such problems is to expose the inadequacies of our own system compared to what the other countries offer.

There are many points, and I won't go over them all, but in summary:

1. A fair and uniform corporate tax code.
2. A fair and uniform pension system (including a reform of Social Security).
3. A robust unemployment system that promotes retraining and values self-reliance.
4. A national retraining program as industries and technologies shift.
5. A National Health Care System - Heck, model it after Japan's for all I care. It can be as simple as what it's intended to be: If you have health insurance now, GREAT! Go your merry way, we're leaving you alone, don't even look here. If you lose your health insurance, because of a job change or unemployment, you pick-up a plan subsidized by the government until you get back on your feet.

Now, if we had these things, then you'd see how quickly we'd be able to compete with those foreigners, whether they be Japanese, German or Chinese.

Do I think any of this will happen, including health care reform? I doubt it. People are so misinformed and refuse to get themselves educated enough, by whatever means necessary to impact their own lives, let alone the world around them. How can we expect them to have intelligent opinions about such an important subject. No, it has to be "black" or "white". But it isn't. Sadly, not very much in life is...