GM and the collapse of social security

A story on NPR this morning did the usual superficial media story on the impact of GM's announcement that they would reduce the workforce by 25,000. The host and guest discussed the obvious and made the statement "GM cannot solve it's problem without increasing the unit volume against which it can distribute its health care and pension costs."

I'm not an auto industry analyst, but I think that means they need to sell more cars. These health care costs were described as adding $1500 to the cost of each GM vehicle.

Whether that is too much or not enough isn't so important...clearly GM isn;'t selling enough cars...What I found interesting is that GM's decade-long workforce reduction plans have resulted in a state where there are 3 pensioners for every 1 worker. Clearly, the welfare state is found in a microcosm at GM. Perhaps there are instructive lessons to be learned about how such a system functions...or doesn't...right there in good old detroit. And when politicos start dissin' the conversation on Social Security in good old DC, maybe there's a parallel they should study in the heartland.

It's quite simple I think. People like fiction. Leaders are, by definition, people who don;t let fiction drive their decisions. Most people are not leaders...Leaders bring honesty about the consequences of decisions. Leaders are found among every social and economic class. Honesty about social welfare systems goes like this:

If more people in an organization (a company...a social system) are net consumers of resources (financial, intellectual, natural) then over time, people in other organizations (companies...countries) who are net producers will have control over the net consumers' resources.

Producers have the power.

To whom shall we grant the power over of our social system's resources? The people of GM have, unintentionally, granted control of their destiny to everyone but themselves...arguing who is to blame is inconsequential...everyone who is to blame will feel the consequences.