And Another Thing . . .

While I’m on the subject of potentially declining living standards: the news that General Motors is going to cut its benefits so it can save $1 billion a year should worry a lot more people than GM workers or retirees. This is a clear manifestation of the broken health care system in the US and the impact of globalization. GM needs to cut its benefits so it can stay competitive with other car firms who are based in countries where health care is a social program as opposed to an privately funded one. Approximately $1,500 of the cost of every car GM makes goes to benefits, so that’s like giving Toyota etc a $1,500 head start on profitability. No wonder Toyota looks set to become the world’s largest car maker in the not too distant future. Of course the larger picture is the crumbling of living standards that this means for the traditional ‘blue collar’ worker: the people who, in the 1950’s and 1960’s were able to achieve a share of the American Dream. Globalization has set in motion a ‘race to the bottom’ for the majority of workers whose jobs are no different from those now being performed more cheaply in places like China or India. And our politicians seem non-plussed as to what to do. The Democrats can’t figure out how to square free trade with protecting the disadvantaged/workers who are their traditional base. The Republicans don’t seem to care. Meanwhile the rest of us wait for help.