The Obama auto deal

Sounds good to me.

The government takes a piece of the automakers’ retiree health care costs; in return the companies produce more fuel-efficient vehicles.

At first blush, I love it, though if I’d probably make it a sliding-scale subsidy proportional to gallons saved and conditional on maintaining retiree health benefits as opposed to a fixed amount triggered by meeting specific targets.

The health costs aren’t going to go away; if the companies go broke and stop paying them, the government (and other employers) will pick them up one way or another, through Medicare, Medicaid, or unreimbursed-care accounts. And the automakers’ pension overhang is also a huge threat to the solvency of the Pension Benefit Guarantee Corporation. So just letting them go broke probably isn’t really an option in the first place.

If we have to bail them out, might as well get something for it. Given how badly they’re doing, we’re in a position to demand quite a lot.

From a partisan viewpoint, getting the enviros and the industrial unions on the same side is sheer brilliance.

I guess what I hear is true: Obama isn’t just another pretty face. Now I’m just waiting for him to take revenge on McCain, so we’ll know he’s tough enough for the Presidency.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com