Want a great analogy to the inevitable fate of government-run health care? Look no further than the American automakers. At the beginning of the week, analysts and ordinary Americans alike were shocked to discover that Ford Motor Company, the only American automaker which did not take federal bailout cash, reported a profit of $997 million during the third quarter.
Sure, if you look at how government spending has caused a small increase in Gross Domestic Product, it could be argued that some of Ford’s success comes from the government’s Cash-For-Clunkers program. According to the Wall Street Journal, however, there’s a whole lot more to Ford’s unexpected earnings than that — in fact, the answer to why Ford made money is fairly simple: when General Motors did something, Ford did the opposite.
Before parsing those implications, though, it’s worth examining Ford’s recent spate of good news because there has been precious little of that from Detroit in recent years. The company’s turnaround actually began three years ago with decisions that amounted to zagging every time that General Motors zigged, which was remarkable for a company whose strategy for decades was to follow GM.
When General Motors kept its CEO (the recently deposed Rick Wagoner) a few years ago, Ford brought in a new one, Alan Mulally from Boeing. While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size. (Another Ford brand, Volvo, appears close to being sold.)
The zig-versus-zag pattern continued when General Motors bet big on home mortgages through GMAC and then sold control of the financing unit, which now is on government welfare, just like General Motors itself. Ford avoided home mortgages and held onto its finance arm, Ford Motor Credit, choosing instead to mortgage all its assets to raise money to fund its turnaround effort.
So what, pray tell, does this have to do with health care reform? Well, Ford’s success is due to the same opportunity presented by federalism — it saw what a counterpart was doing wrong, and did the inverse. If we were to provide the individual states with more freedom to enact the type of health care reform they deem best, the entire nation could become a test facility that would end up making every state’s system better.
Think about it for a moment. Two weeks ago, we discussed here at America’s Right the pitfalls of Maine’s Dirigo Health System. Frankly, it’s a complete failure, and in a system which permits the states a certain degree of freedom, those states should be able to look at Maine, see it for what it is, and adjust their plans accordingly. It’s the beauty of federalism. It’s the basis for the “thousand sparks of genius” remarks made by Ronald Reagan in his seventh State of the Union Address.
And it’s an integral part of the alternative health care reform bill proposed by House Republicans. That’s right, not only does the GOP alternative open up the private insurance market to interstate competition and permit small businesses to pool employees for better buying power, the bill actually gives more power to the states to enact reform as best fits their individual needs.
Plus, the GOP bill does so at 230 or so pages instead of the 2,000-plus pages being pushed by the Democrats. And, even better, the Congressional Business Office has scored the Republicans’ bill at only $61 billion over the first ten years of the plan. Contrast that with the $1.055 trillion price tag given to the Democrats bill by the same CBO, a price tag that the New York Post found would actually be about half the total cost, and would end up stealing $1.8 trillion from taxpayers.
So, it comes down to a decision for America: $1.8 trillion and rising costs for American families, or $61 billion and reduced premiums and deficits?
Seems like a no-brainer to me. If only the no-brainers on Capitol Hill would agree.