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By Root 949 0

” and it’s an attractive fiction to say the U.S. industry failed “to take on” the UAW. But why, in the face of a battle you know you are going to lose because the adversary can outlast you, would a management embark on such a short-term, self-destructive course? Better, then, to play along, keep the peace, and meanwhile figure out how to reduce manufacturing costs as a whole, offer more buyouts, and work more advantageous additions into new contracts. Ultimately, this long-term strategy was overwhelmed by the financial meltdown of 2008: more than $100 billion in “legacy costs” (primarily health care) over the previous years had simply left GM with insufficient cushion to weather a sharp downturn.

It’s a tragedy with no heroes, but also no villains. The UAW leadership probably moved as fast as they politically could. GM management used this close and trusting relationship to educate, to let people know what we needed and why. But the momentum of the rank and file, their steadfast belief that “more” was a historic right, their conviction that “no way is GM ever going to go broke,” meant that the bleeding couldn’t be stopped.

Health care costs grew and grew, accelerated, as always, by America’s unique “contingent fee” legal system, whereby the penniless victim can see justice done by hiring a lawyer who is willing to help “for free” in exchange for a percentage of a possible settlement. Noble intent, but that’s not how it turned out. In a classic example of the law of unintended consequences at work, “medical malpractice” (along with “personal injury” in general) became an ever more powerful branch of the legal profession, with active solicitation—in fact, aggressive searches—for possible new “victims” who could be lucratively “assisted.” Trial lawyers like to point out that all this is untrue, that only a small portion of America’s health care bill is accounted for by settlements, but, while technically true, that misses the point. A vast multiple of the actual settlement cost is devoted to the constant defense of suits, the defensive posture the medical profession has had to adopt, the outrageously high insurance premiums even a small family practitioner is forced to pay, the needless duplicative diagnostic testing used to confirm and reconfirm the initial diagnoses, the presence of third-party witnesses in examining rooms to testify to the doctor’s innocence in later allegations of misconduct.These wasteful procedures and their attendant costs are all due to our (unique to America) “contingent fee” legal system, which results in our health care being the most expensive in the world while at the same time not necessarily the best.

Then there’s the American media! With relatively rare exceptions, these men and women are well left of center, with over 70 percent of the profession cheerfully declaring themselves “liberal” in surveys. Products of a higher education system that is itself riddled with professors who are anything but conservative, most journalism majors receive a massive dose of anti–free market, anti–big business programming in college. I recall my own days at an esteemed institute of higher learning; even in business school, most professors believed and taught that there must be “a better way” than free-market capitalism. (Many people on the left, otherwise perfectly smart, sincerely believe that the only reason socialism failed miserably everywhere it’s been tried is that the wrong people were in charge.)

A compounding factor is that, unlike in Europe, where an “economics correspondent” typically has a degree in economics, the journalism student in the United States merely learns “journalism” : how to write, how to interview, how to develop sources, journalistic ethics . . . all good and legitimate skills when superimposed on some specific background in the area being covered. But that’s never the case here. And so we have people reasonably adept at writing and interviewing not only reporting but actually opining and pontificating on corporate or financial matters of which they have only the most superficial