\jeff{krimmel}

Bush Is Right About GM and Ford

I will let the first paragraph of this Reuters article speak for itself:

President Bush said General Motors Corp. and Ford Motor Co. should develop more appealing products rather than look to Washington for help with their heavy pension burdens, The Wall Street Journal reported Thursday.

Exactly. President Bush hit the nail on the head with this one. It is not the federal government’s responsibility to prop up domestic businesses that fail to compete well in the marketplace. American taxpayers deserver better than that.

The government doesn’t get a free pass on this front, however. One of the big reasons GM and Ford are having such serious financial troubles? Health care costs.

The newspaper said while neither GM nor Ford has sought a bailout, they have dropped hints they would welcome government help in areas such as coping with rising health care and pension burdens and the high costs of developing fuel-efficient vehicles.

Now this is an area in which government can help domestic businesses. The new Medicare Part D prescription drug benefit is shaping up to be a complete disaster, and this result certainly doesn’t help businesses with non-negligible health care costs. The government should have realized that a huge payout to pharmaceutical and health insurance companies wasn’t going to help business in other sectors, and in fact, the new plan is increasingly hurting these other businesses.

In addition to worsening the health care crisis, the government is refusing to work on providing the leverage necessary to accelerate the market’s adoption of renewable and alternative energies. While the government should not be subsidizing businesses that fail to compete in the marketplace, it should be providing the appropriate incentives to ease the transition to newer, safer energy sources that will benefit everyone.