Monday, March 30, 2009

UAW: good or bad for the free market?

The question is posed in a very specific way. Unions are not a free market component, but in America they are a neccesary evil. They protect against corrupt corporate tycoons. They make sure that bonuses are not AS extreme as those of non-union shops. But, are Unions being used by the Obama administration as leverage to get nationalized healthcare. That's a conspiracy theory!

If you say that the auto industry is a cornerstone of the fabric of America then it's a small leap to say that if the auto industry is to survive then the cost of the labor must go down. If the a large of labor cost is health care then it stands to reason that the largest advocates for national health care will be the unions. The large desire to keep the car industry afloat, without the use of bankruptcy courts, and with consessions from unions will require the removal of health care earmarks on the auto industries balance sheets. If national health care is provided at a pivital time when all the "moons are aligned" then there may be chance to see the national health care at the the forefront of the administrations "bailout" campaign. A democratic president, house, congress, plus public momentum, a failing economy, and an industry in distress from foreign labor costs, what more can you ask for? It reminds me of the Patriot Act and 9/11. We could very well see national health care in our life time.

The UAW may be good for the free market. It may cause corporations and the public to increase support for national health care, thus removing large liabilities from corporate ledgers and into the hands of those with a more user check book(the U.S. government). This may lead to a consolidation of government sponsored programs, an increase in oversight and fraud provention, and preventative measures for individuals. What if we tax "Octomom" 14x the standard rate and remove trillions from corporate balance sheets. Unions around the country would have a larger coffer to support retirees. Corporations could grow faster. Labor costs would be reduced. Both sides of the aisle would get to make money.

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