Don't cry for GM 

Too much ain't enough

Too much ain't enough
When General Motors announced last week that it was going to have to lay off 25,000 workers, many of them here in Indiana, the out-of-control cost of health coverage was said to be a major reason for GM's woes. In 2004, GM spent $5.2 billion on health care for its employees and their families. That was $400 million more than the automaker spent in 2003 - and $400 million less than they anticipated having to spend in 2005. It was reported that health coverage added $1,500 to the cost of every new GM automobile.
Although the potentates at places like GM and Ford complain about their profit margins, corporate profits in America have been booming. Between the first quarter of 2001 and the second quarter of 2004, corporate profits grew 40 percent. Compare this to the growth of wages and salaries over the same period: 0.3 percent.
Two weeks ago, Delphi Corp., the nation's biggest auto parts supplier, chimed in by saying that it was losing money because of the high cost of health benefits. And Bill Ford, chairman of the Ford Motor Company, gave a speech in which he complained that health care "is the biggest issue on our plate that we can't solve." The cost of health care in this country is a problem, all right. No, make that a crisis. The prices of everything, from doctor's visits to prescription drugs, keep going up while our ability to pay for these often life-or-death services keeps going down. Tens of millions of Americans have no health insurance at all. Since most people in the United States get their health insurance through the places where they work, the fact that big employers like GM and Ford claim to be hurting because of health care costs should, contrary to what Mr. Ford says, suggest a solution. If the spiraling cost of health care is cutting into corporate America's bottom line, you'd think that corporate leaders would have a real incentive for getting together and calling on the government to step in and take control of the situation. In the past, when faced with bankruptcies, automakers and airlines haven't been bashful about asking Congress for bailouts. Imagine what could happen if a group of CEOs from the Fortune 500 went to Congress demanding the creation of a national single-payer plan. Freed from the burden of having to provide their workers with health care, corporate profits would be enhanced - and every citizen would get the health care they needed. As Michigan Congressman John Dingell has pointed out, "If you look, you will find every country has national health insurance paid for by the government and not by the companies." But this makes too much sense. Although the potentates at places like GM and Ford complain about their profit margins, corporate profits in America have been booming. Between the first quarter of 2001 and the second quarter of 2004, corporate profits grew 40 percent. Compare this to the growth of wages and salaries over the same period: 0.3 percent. But it appears too much ain't enough for corporate America. While CEOs complain about the high cost of health care, their way of dealing with the problem is to cut workers' benefits and lobby Congress ... for tax breaks. U.S. corporations are currently getting more than $300 billion worth of tax relief, a total that, according to consulting firm Global Insight, amounts to over one-third of the total value of all U.S. profits. Last October, Congress passed yet another round of corporate tax relief. Adding insult to injury is the way this boom in corporate profits, coupled with the Bush Administration's war on taxes, has widened the gap between our nation's richest citizens and the rest of us. As David Cay Johnston demonstrated in his series, "Class Matters" in the New York Times, it is instructive to compare what happened to wealth during two eras of growth experienced by Baby Boomers. For every additional dollar earned by the bottom 90 percent of the population between 1950 and 1970, those in the top 0.01 percent earned an additional $162. Between 1990 and 2002, for every dollar brought in by the bottom 90 percent, that top bracket brought in an extra $18,000. In the 1930s, Franklin Roosevelt's New Deal saved American capitalism from itself by making sure corporate wealth was regulated through taxes that provided greater personal security and opportunities for people to buy into the system. A lot of American capitalists hated Roosevelt for this intervention. They got rich anyway - and helped create unprecedented American prosperity after the Second World War. Today the corporate class is richer still. And happier, too, with George Bush working hard to erase Social Security and every last vestige of the New Deal. At times it feels like we've returned to the age of robber barons, that time when a tycoon like Frederick Townsend Martin could say, "We are rich. We own America. We got it, God knows how, but we intend to keep it." Until, that is, the rest of us wake up and take it back again.

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David Hoppe

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