Saturday, July 11, 2009

Walmart and The Noose Of National Health Care

If you haven't heard the news about Walmart and it's surrender to a national health care scheme, here it is. The best analysis of this whole sorry business comes from Megan McArdle at the Atlantic:

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...

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.

Walmart has pulled one of the oldest tricks in the book and it has positioned itself rather nicely to beat down competitors with nary a liberal backlash. Once again we see how a government scheme tilts the playing field in favor of big business. I don't fault Walmart for their tactic. In fact, I think that its the most rational approach to a federal government that is threatening to create a frightful business environment.

5 comments:

The BoBo said...

I was on some libs' blog a couple days ago - I wish I could remember who - they were trying to say that smaller government would only benefit the rich (was in response to someone else's Thomas Jefferson quote). I used the Wal-Mart and GE partnerships as examples why you don't want BIG government. Those libs don't realize that the bigger government gets the richer the rich get and the poor and middle-class get squeezed out.

Jeff Perren said...

I do fault Wal-Mart for their position. There's more to moral evaluation of rational self-interest than what puts the most bucks in your pocket today.

They're undermining a system on which their own well being depends and encouraging its opposite. If a fascist state arrives, and the health care plan is just one more not-so-small step in that direction, Wal-Mart's executives will be guilty of having helped it along when they could have resisted.

If the paler shades of Hank Rearden of the world don't stand up and proudly declare their right to do business unfettered, they'll deserve what they get in the end (even though we don't).

Divinity Avenue said...

Last time I checked, Wal-Mart was on liberals' bad side because they were a huge corporation and taking advantage of people.
How the tides change...

Harrison said...

Libs also don't like to talk about how much money Walmart saves poor people with things like groceries. They only care about them not being union... just look at what they did to Walmart in Chicago.

VH said...

Jeff,
hard to argue with your logic-you are spot on. Walmart execs should stand up to this ponzi scheme.