In this very nice piece, George Will looks at the Maryland’s General Assembly’s recent mugging of Wal-Mart.
This is part of the tawdry drama of state politics as governments
grasp for novel sources of money. Forty-eight states are to varying
degrees dependent on revenue from gambling. Forty-six states are
addicted to their cut, to be paid out over decades, from the $246
billion coerced from the tobacco industry by using the specious
argument that smoking costs their governments huge sums. As a result,
46 states have a stake in the long-term profitability of tobacco
companies.Maryland’s grasping for Wal-Mart’s revenue opens a new
chapter in the degeneracy of state governments that are eager to spend
more money than they have the nerve to collect straightforwardly in
taxes. Fortunately, as labor unions and allied rent-seekers in 30 or so
other states contemplate mimicking Maryland, Wal-Mart can contemplate
an advantage of federalism.States engage in "entrepreneurial
federalism," competing to be especially attractive to businesses. A
Wal-Mart distribution center, creating at least 800 jobs, that has been
planned for Maryland could be located instead in more hospitable
Delaware.Meanwhile, people who are disgusted — and properly so
– about corruption inside the Beltway should ask themselves this: Is
it really worse than the kind of rent-seeking, and theft tarted up as
compassion, just witnessed 20 miles east of the Beltway, in Annapolis?
The first part of the piece has some very thoughtful analysis of rent-seeking and the Founders worries about it.
If the legislature wants to give money or health care to poor people, it should raise taxes and make the people who elect the officials sanction it via elections. Taxing Wal-Mart’s customers and stockholders is the wrong route for a democracy. The title of Will’s article, "Shoplifting as Governance," says it eloquently.
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{ 19 comments }
What a brilliant opprotunity for an exeriment in federalism. W-M leaving MD would provide a perfect opprotunity to see first hand the effects of states driving out those who dare to save their residents money.
My prediction: W-M will be just fine without MD but, once retail prices rise 5%-8%, MD will not be just as well without W-M.
how many workers does Target whose CEO Robert J. Ulrich is a die hard Move-On Friend of Bill employ in MD? Dont think Targets compensation is that much more generous
Why not decree that physicians and hospitals who treat employees of Wal-Mart cut their bills by 10%?
Wal Mart employees already get free health care, of a sort. Everyone does. You go to an emergency room with no insurance card and an empty pocket and you won't get turned away. The question is one of who pays for it.
"If the legislature wants to give money or health care to poor people, it should raise taxes and make the people who elect the officials sanction it via elections."
If health care costs keep increasing 10%+ per year then I think this will happen at some point. Except it won't be just for poor people, it will be single payer universal health care. Things will get a lot worse first, though. And we'll probably see a lot more municipalities, counties, and states try to effect misguided, patchwork policies to solve the problem in the meantime.
Entrepreunerial federalism is a nice idea(and would that Republicans respect their oh so cherished "states rights" when it comes to things like medical marijuana laws, but that will be a cold day in hell…)but health care is a national problem. A state can't solve it by itself, just like little Manassas, VA can't solve the problem of illegal immigration by passing a law about non-relatives living in the same house. So while the MD legislature makes a nice whipping boy and there's plenty of arguments for why what they did was a dumb idea, I think the real question is when will the United States get a health care system that works? Forty million or so people uninsured who can't go to the doctor for preventative care, but can go to the most expensive place on earth(emergency room) for free doesn't make sense.
Alternatively to MjrMjr proposal to fully socialize medicine, perhaps State governments would consider allowing a degree of competition among health care providers to deliver services.
Most States have some sort of Regulatory Board limiting the amount of competition in an area. The Illinois Health Facilities Planning board is mostly indicted now (or in prison) for ransoming hospital building in exchange for huge kickbacks.
How about a tiny bit of capitalism somewhere in the Healthcare system, just as an experiment?
JBP
Gov regulation has really really screwed up health care in this country. It costs 1200 a month in NJ for a decent health care plan for a family of four. However, this same plan costs 120 a month in Missouri. How screwed up is that. Drop the state sanctioned monoplies and alow for nationwide competition amongst providers.
I'm all for nationalizing health care and having the federal government operate as a non-profit insurer. Providing that:
1) The entire aggregate premiums to pay for the health care is borne by those that have opted-in through payroll (or entitlement) deductions (or reductions).
2) It's set up ONLY as an opt-in program.
Once one is to opt-in and use the program they're in it until they've paid enough premiums to match the level that they have consumed from the program – at which time they may opt-out.
3) The risk is thoroughly spread out evenly and premiums are set flat without discrimination to the health conditions of those who opt for the program.
4) Premiums are adjusted each year. Forecasted based on the anticipated usage/cost and passed on through to the payroll deductions. Surplus – if it exists – lowers future premiums and short falls are made up through premium increases.
The outcomes that would likely result from a program like this would be really telling. Would government insurance provide better results? What would membership look like after just ten years? This leads me to the fifth condition:
5) When (not if) the government has to step in to shut down the program and have the taxpayer fund the deficit that it caused, I want the program held up to the light so it may forever serve as a warning beacon for any other social program that ignorant people clamor for.
I'm all for government solutions to 'social security' issues as long as I have the choice to not participate and not pay for it – unless, of course, there’s a point to make and a lesson learned from it.
I was under the impression that federalism was nearly dead…now that the ninth and tenth articles of the Bill of Rights have already passed on.
The only way I can see the United State of America [the "s" in State was purposely omitted] is if the congress were to find an equitable way to tax the individual states and then have the states tax its own citizenry in a manner that the individual state chooses (through legislation). Allowing for the freedom of movement between the states, we'd see people choosing the state they would wish to reside based on its political climate, the economy, the social conditions, and all other things that give people utility.
Of course there's absolutely no political will to do this and there's probably some unforeseen consequences. But imagining the United [but competitive] States of America is my Utopian dream.
Mabey people are over reacting to the Maryland law. Why won't Walmart simply slow increases in money wages until the total of real money wages and other compensation is back to its correct level?
Health care is not a national problem, it is an individual problem. The government has made it a national problem by meddling with it.
This is stupendously obvious if you think about it even briefly. There is no national veterinary care crisis. Why not, it's basically the same right? The difference is that we pay for veterinary care out of our own pockets, not those of "insurers" or the state.
LowcountryJoe:
WRT your 2nd comment… doesn't this already happen? There's a federal income tax set by the federal gov't, and then there's taxes which can vary by state. Taxes can even vary by localities within a state. NYC residents pay higher taxes than folks in Alabama, no? We do have mobility between states, and people *do* choose where to live "based on its political climate, the economy, the social conditions, and all other things that give people utility." States compete on taxes all the time. Just to pick one example of many that come to mind, look at the way that Southern states have competed for new auto manufacturing plants to come locate in their state. A large aspect of the competition is offering the best package of tax breaks.
WRT your first comment, what you're proposing doesn't sound like insurance.
Correct me if I'm wrong but are not federal taxes raised by taxing individuals? I recall filing 1040s year after year. My proposal has the federal government sending tax bills to the individual 50 states plus one to the District of Columbia. The individual states then would have to tax their residents to pay the federal bill and yo pay for their own state services.
Is that more clear now?
Maybe you could tell me what your definition of the word "insurance" is. And, more specifically, how health insurance works.
The only real differences bewteen what I'm suggesting and what the loons on the Left are suggesting are: 1) there's a choice for the consumer to make. 2) there's no so-called (and mis-labeled) "progressivity" to the premiums (aka taxes) 3) once the health consumer has opted-in and been a financial drain on the rest of the premium paying pool, that consumer must stay in the program until they've at least paid for the amount they drained out of the system. Of course if that's the part of the proposed program that you don't like then it can be scratched. Good luck to the person who get's out when submitting their applications for private insurance.
One wonders how such actions affect the viablity of TABORs. Politicians have clearly found ways around actually levying the taxes they want to pay for the programs they desire.
MjrMjr,
Why is health a national problem? Is it because people get sick in every state? Do you know people get sick in England and in other countries too (except France where all forms of ill health have been regulated out of existence)? Perhaps this is a global problem and it should be regulated by the UN. Your thoughts?
Food and shelter are national – even global – 'problems', too. One could argue that food and shelter are every bit as important as health. Shall we nationalize these, too?
If the legislature wants to give money or health care to poor people, it should raise taxes and make the people who elect the officials sanction it via elections.
Actually, this is exactly what has happened.
Parts of medicare is actually designed to provide coverage to just the type of low wage workers WMT employes. In a recent study "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?"
(JEL Classification: R11, R51, H71)
Michael J. Hicks, Ph.D. found that expenditures under medicare per WMT employee was about $898 per worker.
This is fairly typical of the type of medicare expenditures accross the country and is exactly what the program was designed to do. the payments for WMT employees does not seem to be different from payments for other retail workers.
the question I could not answer was whether or not the payments were made by the federal government or they were an unfunded liability the federal government forced on the state. but it looks like it is the later.
so it looks like what the state of MD is actually doing is trying to pass on an unfunded liability to WMT. Several other states are also looking into this possibilitiy.
This does not negate what you are saying about the MD law, but it does place it in a little different perspective.
It also raises a whole host of other questions about federal anti-poverty programs. What we have is a series of
programs like this and the negative income tax that allow firms to pay wages that are too low for people to live on. One consequence is when we look at wage data, including the minimum wage, we do not incorporate the impact of these programs on
what is a decent wage or what is the true cost of a firm providing a good or service.
They create such massive distortions throughout the economy that we have a poor idea of what the true economcs of many things really are.
I'm astonished by people who think there is something special about "healthcare." Medical services are commodities like any other, subject to the laws of supply and demand. Decreeing some form of "national" health insurance won't alter the underlying realities of resource availability, relative costs, technological development, etc. Importantly, the government can no more decree that every American receive "first-class" healthcare than it can decree that every American be provided with a beachfront condo and a Ferrari. So instead, what will happen is the inevitable socialist leveling — i.e., because government lacks the recourses to give everyone a Ferrari, no one will get a Ferrari, and we'll all get Hyundais or whatever. Or in this case, the American healthcare system will become just like the second- and third-class systems they have in other "modern" countries throughout the world. No thank you.
There are some very good comments here.
Spencer is right about the Maryland bill being a revenue grab for an unfunded liability. But there is so much more to it – with the corrupt socialist influence, elitists who think Wal-Mart employees too dumb to know what is good compensation, the entitlement mentality that healthcare should be provided by the gov't and/or one's employer, etc.
The Maryland law represents a major intersection of so many bad ideas and small-minded people.
There is no national veterinary care crisis. Why not, it's basically the same right? The difference is that we pay for veterinary care out of our own pockets, not those of "insurers" or the state.
Or it could be that it's socially acceptable to shoot a sick animal and not socially acceptable to shoot a sick person (nor should it be).
- Josh
Much of the healthcare debate arises from defining access to healthcare as a right, thus the need for government provision. However, rights do not exist in a vacuum they come attached to responsibilities, in the case of healthcare the attached responsiblity would be to live a "healthy lifestyle" so as to not burden others with unneccessary cost. With National Healthcare insurance government would be responsible for insuring your right of access to healthcare and requiring you live up to your responsiblities. I hesitate to imagine what a government approved "healthy lifestyle" might look like and how they would monitor it.