Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, February 28, 2005

The Public Interest in Wal-Mart

Robert Reich has an editorial in this morning's NYTimes (reg. req'd) that appears to begin as a defense of Wal-Mart.

[I]sn't Wal-Mart really being punished for our sins? After all, it's not as if Wal-Mart's founder, Sam Walton, and his successors created the world's largest retailer by putting a gun to our heads and forcing us to shop there.

Unfortunately he concludes by implying the standard interventionist arguments about health care: since workers will become dependent on taxpayer-provided health care if they don't receive health-care plans from their employers, we must require employers to provide health-care plans.

The only way for the workers or citizens in us to trump the consumers in us is through laws and regulations that make our purchases a social choice as well as a personal one. A requirement that companies with more than 50 employees offer their workers affordable health insurance, for example, might increase slightly the price of their goods and services. My inner consumer won't like that very much, but the worker in me thinks it a fair price to pay.

How do our purchases from Wal-Mart become choices that necessarily lead to gubmnt intervention? Why is there some need to "trump the consumers in us ... through laws and regulations...?"

How many employees under Reich's proposal already have a health-care plan through a working spouse? Would he allow them to opt out in exchange for a higher wage? If so, would he allow others to opt out in exchange for a higher wage? If not, why not? And if so, what's the point? His plan would become nothing more than a forced wage increase with an opt-out health care plan included.

Update: For a detailed critique of Reich's position, see Kevin's posting at Always Low Prices.
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