Ceci n'est pas une plan

President Obama says,

We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

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So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So in other words, Medicare is broken and will bankrupt us, therefore we must expand Medicare-type programs to cover a lot more people. This reminds me of the old joke about the basketball player who asks his coach, "Why is the basketball round?" The coach answers, "You have actually asked two questions. The first is, 'Why?' The great philosophers of the world have been unable to answer this question, so I can't help you. The second question you've asked is, 'Is the basketball round?' The answer to this is 'Yes.'"

I am going to go out on a limb here and venture a prediction that serious healthcare reform will not happen before the 2010 elections. There is simply no politically-acceptable way to pay for it, and after trillions of dollars shoveled into "stimulus" and bailouts, the public's appetite for deficit spending is going to bottom out.

Liar Liar Pants On Fire

Fast food restaurants know that government regulations relating to obesity will probably hurt them all, but given sufficient time to think, Taco Bell and Subway would eventually conclude that a ban on hamburgers was in the national interest. Likewise it should come as no surprise that Jeff Immelt, the CEO of GE, likes the idea of Cap-and-Trade:

"I think the science, as a CEO I’m not an environmentalist – just purely as a CEO that has to make a payroll – things like that," Immelt continued. "The science is compelling, so it’s a question of when and not if there’s going to be something done on carbon. Give us some certainty and let’s go."

What is compelling to Immelt is that the number one effect of CO2 regulation will be to force the shutdown of billions of dollars of coal and oil-fired power plants and the construction of billions of dollars of new facilities. Large industrial power consumers will also likely be forced to undertake new "green" investments to remain viable. Whatever the Democrats' anti-wealth agenda takes away from Immelt & co. personally will be paid back a dozen times over when the force of law creates large new markets for GE's products.

Picking up the thread from my previous post, there is a great misconception that Big Business is somehow uniquely aligned with the GOP. If the Republican Party is at all the party of business, it is the party of small businesses, on whose shoulders the weight of government bears hardest.

This is a prime example of what economist Arnold Kling calls "progressive corporatism," which is a taut way of saying that big business quickly finds accomodation with big government. The way I think of it, they are like two teenagers who fight over which one gets the car on Friday night, while both agreeing that paying for gas is the least their parents could do.

Government Motors At Last

The GM endgame now comes clearly into focus: The sick man of Michigan will declare bankruptcy, the government will buy it, and Big Business and Big Government, whose relationship could formerly be regarded as a series of flirtations that occasionally turned adulterous, have finally filed for divorce from the American citizenry and announced their intention to marry. More disturbing unions have been seen, though not since Catherine the Great paid a visit to the royal stables.

And what will we get for all this? We know little about the future, but that GM will shed American jobs for years to come is a near-certainty. They have already committed to close a number of plants, and Obama's plans to force Americans into smaller cars will deprive American automakers of their primary profit center. We are getting well to the point where it would be cheaper to simply write every GM employee a check for a hundred thousand, tax-free and call it quits.

My sole point of cheer in all this is that just as our president's once-tender sensibilities about military tribunals and offshore detention of suspected terrorists emerged his first 100 days greatly toughened, so the rather sticky business of running GM may prove similarly clarifying. For no American company so thoroughly embodies the vision of European-style social democracy as GM, and for that it is coming now to its logical end.