Wednesday, June 3, 2009

Illustrations on Health Care

There were two events this week that really show what a government healthcare system would look like.

The first is the crash of the French airliner in the Atlantic. The interesting thing to me about that crash is that I just learned that damages from airlines for crashes, even resulting in fatalities, is limited to around $200k by international treaty. This treaty was passed in the early 20th century in order to promote the growth of an international airline system. It seems to have do extremely well at that, but interestingly it also seems not to have limited pressure on airlines to fly safely. If you listen to people opposing limits on liability for doctors you would expect that similar limits on air carrier would cause us to have accidents all the time, but in fact it's much safer to fly than drive and I learned about these limits only because of a very, very rare fatal crash. Comair has the worst safety rating of any North American carrier, having lost 2 planes out of 5 million. I'll go ahead and state that I would be willing to go to a doctor with such an atrocious safety record.

The second is Obama's takeover of GM. I think any reasonable observer would instantly come to the realization that his gutting the rights of top priority lien holders in favor of the UAW reflects the fact that the government takeover gives favor to parties favored by the government. We can also see this in the fact that he has already assured the Mayor of Detroit that GM's headquarters will remain there, regardless of the business sense of that. It also makes sense to question what now happens to non-government owned automakers. Can Ford fairly get fleet vehicles bought by the fed? Will the UAW negotiate terms to the independently held Ford the same as to their own automaker? If they don't and Ford takes them to court, can we expect the Federal Government to fairly hear the case that the UAW discriminated in favor of a company they jointly hold with the Federal Government? There were local utilities a decade or two ago that tried to get into the TVA's market, but were rebuffed because TVA drastically cut their prices long enough to hold them out. TVA lost money during this time, but they're a Federal agency so we were there to bail them out. Can we reasonably exclude GM from following the same pricing plan? When the government is setting safety, emissions, or fuel economy standards, would it make sense for them to look at what their line of cars already produces? How closely can we expect this to be tailored? Currently the standards are different for light trucks. How about a different standard for cars that have exactly the same weight and interior volume as the Chevy Obama?

This is the ultimate in vertical integration, and it should raise exactly the same red flags as a "government option" in healthcare.

1 comment:

evanda said...

Apparently no adverse effects on ford yet:
http://blogs.wsj.com/washwire/2009/06/09/us-revs-up-purchases-of-fuel-efficient-cars/