I find it hard to believe that none of the liberal commentators breathlessly celebrating Wal-Mart's "capitulation" on national health care have even entertained the most parsimonious explanation: that Wal-Mart is in favor of this because it raises the barriers to entry in the retail market, and hammers Wal-Mart's competition. Yet somehow, this appears nowhere in any of the analysis. These are the explanations that they found more plausible:
1. Wal-Mart wants to change its image, which is better accomplished by securing a massive regulatory mandate than by, say, insuring more employees, or setting up a happy-face charitable foundation.2. Wal-Mart wants to make its voice heard in the process, which is better accomplished this way than by paying lobbyists. Also, Wal-Mart is hoping that the federal government will deliver health-care cost control, which is something the company that gave us $4 prescription drugs couldn't hope to do on its own. Controlling health care costs is, of course, a big worry for a company that I'm told does not insure many of its employees.
3. Wal-Mart is flummoxed by unpredictable health care costs for all the workers it apparently isn't covering. Because if there's one thing that we've learned over the years, it's that when the government gets involved, health care costs become totally predictible.
Also not considered: Wal-Mart cut a deal with the SEIU in exchange for the SEIU leaving it alone.
Yet, even in liberal academic literature, it is a commonplace that regulations disproportionately benefit several types of firms:
a) Incumbents
b) Market leaders
c) Firms with the most employees
Regulation has a very high fixed cost for compliance; the larger the firm, the more dollars/employees over which to amortize the fixed cost. Meanwhile, market leaders have disproportionate bargaining power, and tend to get better rates from suppliers than smaller competitors. Finally, a high fixed cost means either that it's harder to initially enter the market, or (if there are exemptions for the smallest firms) harder to grow.
On the other side, there is regulatory capture. Wal-Mart is always going to have a seat at the table when employer mandates are discussed, because Wal-Mart is the nation's largest private employer. Target and Macy's probably won't have a seat at the table. So Wal-Mart can influence the rules in ways that benefit Wal-Mart at the expense of the competition. This is partly because the regulators often cycle into jobs at the firms they regulate, but also simply because the regulator's attention is finite, so being consistently at the table allows you to shape their views over time. Again, this isn't some kind of crazy right-wing analysis; regulatory capture was first diagnosed by a Marxist historian named Gabriel Kolko.
All of which is to say, Bootleggers and Baptists should be required reading in all schools. When you find strange bedfellows in politics, don't look for a surprising outbreak of spontaneous virtue: looking for the hidden conspiracy.
This reads like a comment on a blog entry. The context has to be sought out--you don't really include it. Why not begin your article with the substance of the story you're referencing?
If you really think that "liberal" commentators have missed the point, you've hardly done your theory justice. You begin by summarizing your 3 examples' points, then you briefly mention several opposing points of view. Cryptically, you label the final one "on the other side..." as if it were in opposition to your previous point, which it is not.
I find this all somewhat interesting, but if you can't bother to write a complete story, I can't be bothered to follow your byline in the future. Reporting and analysis is difficult. That must be why so few of you are good at it.
One of the most mindless comments Ive seen in a while. The argument is succinctly stated in the first paragraph, and backed up by what follows. Read http://www.cato.org/pubs/regulation/regv22n3/bootleggers.pdf before commenting further.
I agree with the first poster. His argument has some merit to it because the article was in fact incoherent. I'm quite knowledgeable in the topic at hand and yet could not follow along easily. To Andrew: The first paragraph does not introduce the argument well and furthermore, seems to create the basis for a rant rather than an actual argument. The author clearly does not consider both sides of the matter and seems to be blatantly "anti Wal-Mart."
About the article itself: Wal-Mart IS the largest private employer and does NOT insure most of its employees. But, before doling out statistics, remember most of its workforce are service employees (store clerks, cashiers and janitorial staff). Now, it would be rather unfair stating that Wal-Mart is trying to find a way of escaping health care when the same kind of employees would not find any health benefits at Wal-Mart's competitors. In fact throughout the industry, you would be hard-pressed in finding a corporation that gives health benefits to its "low-level" employees. I'm not saying this is ethically correct or incorrect, but I think we should not just point at the biggest kid in the playground and call him/her the bully.
I think there's another simple reason for why Wal-Mart supports the initiative: to ensure it is not singled out for discriminatory treatment by legislation. Maryland, for example, passed a law (later overturned) mandating that Wal-Mart (but not other employers) provide healthcare for its workers. I agree with Megan that, if ALL firms are required to provide insurance, Wal-Mart is well-positioned to turn this law to its advantage -- but it would prefer that NO firms were so required.
I wouldn't be surprised if the ensuing debate over mandatory insurance highlights how (a) expensive and (b) complicated such an employer-insurance mandate is. Megan's right that Wal-Mart has an advantage in dealing with the complications -- but Wal-Mart's "capitulation" may be a gambit to make the whole mandate movement fail, while ensuring that "all or none" are the only choices on the table.
If one were writing about a recent controversial discovery in particle physics for a readership that would be interested in such, I doubt that a lengthy introduction to quantum mechanics would be a requirement for comprehension. If one writes about a specific topic that has been a top story in the national news, it hardly seems necessary to educate the reader of a business article about a highly publicized business event. I find the initial criticism unfounded. Agreed that “On the other hand” conveys the implication of an opposing view rather than something else to consider, but that slip doesn’t make an otherwise informative and thought-provoking article “incoherent.”
As for Wal-Mart, a good example of the “altruistic” behavior can be found in their position during the revision of the Hours of Service regulations that ostensibly promote the safety of driving in the trucking industry. Wal-Mart is notorious for using non-company trucks as free JIT (just in time) warehousing. Truckers sit there for hours without pay (most are only paid by the mile) while Wal-Mart maximizes warehousing and transfer efficiency. The Arkansas congressional delegates were twirling to get what became know as the “’Wal-Mart Amendment” included in the new regulations. That would allow time that truckers sat there without pay to not be charged as “On Duty” so that the poor trucker would have to bear the entire expense of the “warehousing” and then be back on the road after the tiring and demoralizing experience. The point of regulatory reform was to keep tired truckers off the road and rested rather than make them work for free without counting the hours. Fortunately the amendment was defeated, but one can see the corporate mentality: slave labor is more important than public safety.
I find it hard to believe that you don't know that many people may shop at WalMart out of necessity but then never admit it to most of their friends and co-workers, etc. And, that WalMart is well aware of this and wants to change it's image desperately.
And, as far as having it's voice heard in the process goes, don't you think they have lobbyists on this already? You don't think they're talking both roads? Perhaps the deal they want is to have a much cheaper rate based on the number of employees they have and plan on having in the future?
What historic events are you citing when you refer to the governments involvement in health care that caused costs to rise? Making drugs pass FDA regulations? Controlling the educational requirements of doctors, nurses and other medical workers? If there is an industry that the government does not have some control over do tell. Because, if I'm not mistaken there is an annotation of the 14th amendment that specifically says government has control over all businesses. But, I guess that's only for those of us who actually think US Supreme Court Rulings count.
Then, naturally, blame a union even when there is none in the mix.
The only thing I think you missed was blaming the doggone workers for expecting too much from an employer...you know, like a safe work environment or fair wages or being treated with respect. Goodness sakes, how dare people expect to be treated like humans.
How about this idea? Sometime in the next 10 years we are going to have some form of socialized medicine and WalMart wants to be influential in the process and appear to be a leader. Remember, they were the store that waved the US flag more than any other..shortly before importing everything from China.
Come on Kay You ask: "What historic events are you citing when you refer to the governments involvement in health care that caused costs to rise"? Do you really need any examples?>> ummmm how about the insolvent duo.. Medicare and Medicaid. While were at it how about Social Security, Fannie Mae, Freddie Mac, Section 8 housing, military spending and and on and on and on...
As for Magicube, do you listen to yourself? you write: " I find this all somewhat interesting, but if you can't bother to write a complete story, I can't be bothered to follow your byline in the future. Reporting and analysis is difficult". Well, do you want a novel? This thought provoking article prompted you to make a comment which in turn contradicts your point. It provoked enough thought from you (albeit an anemic one at that)for this to tweak your apparent fragile liberal temperament-the real reason this article upset you. Please follow her byline.. we need to laugh now and then LOL!
Kay, I'm just stunned. Your combination of arrogance and ignorance is something I usually associate with right-wingers, but I guess the times are changing.
I've got to address the simple thing first. The Fourteenth Amendment settled the issues of war debt and eligibility to run for office (from the "Civil War", although it wasn't one) as well as affirming due process of, and equal protection of, the laws. It should have finished segregation, but that took some time. (Due to the cowardice and evil of the Supreme Court, which, like every other office, we should simply abolish.)
There is absolutely no "annotation" (where do you get this nonsense?) to the 14th Amendment (which, you may note, is not a "US Supreme Court Ruling") that "specifically says government has control over all businesses" - you might be confusing some or other law of Mussolini's Italy. Or perhaps the ironically-named "commerce clause"... It's just as well, though, because the government acts as though this were the case, and millions of Americans feel that it is, or should be, the way things are.
Your way of thinking has been essential to making Fascism our form of political economy.
Second, a more subtle point, if you're still reading: all of the things you mentioned (FDA regulation (which is why all drugs are safe now, right?) and dictating SCHOOLING (don't say "educational" - I work in the racket) requirements for nurses and doctors (the actual quality of whose services is consistently being degraded)) actually HAVE increased the costs of health care. We can't measure this with any degree of certainty, but, yes, adding TEN YEARS of preparation (most of it, frankly, being nothing more than a weeding-out mechanism to keep labor costs high) to a profession will make its members charge you more.
You know what made me wake up? It was when I was reading The Economist, many years ago, and looking at their statistics on price changes by industry. I noticed that higher ed. and health care were (as always) the leaders by a big margin in the rate of price inflation. Next up? Food and housing. What was at the bottom? Consumer goods.
We've been led to whine all of the time about how medical care and schooling are increasingly unaffordable, without any serious consideration of WHY this is always and ever more so! Those things the government subsidizes (and it's so easy, isn't it, to favor such subsidy! you can show how much you care, without having yourself to write a check...) have been blowing up in price for DECADES. The things it leaves alone tend to get cheaper, due to improvements in technology and allocation of capital...
Inasmuch as the government is RIGHT about the things that we need, it will screw them up in this manner. It will then average together the price changes in, say, a college education, cancer treatment, and MP3 players to tell us that "OVERALL, there's no inflation!"
Great. But, hey - at least this system has filled you in on what the 14th amendment does!