No Wal Mart Law For Maryland - Road to the Middle Class

U.S. District Judge J. Frederick Motz ruled that the law violates the Employment Retirement Income Security Act (ERISA), a federal law that sets minimum standards for pensions and health plans.

So that’s all right. Wal-Mart won’t have to pay a tax if its health benefits don’t reach a minimum 8 percent of payroll. You can imagine that Wal-Mart’s PR guys were delighted. “BREAKING NEWS,” they crowed.

But we sober souls need to think long and hard about health insurance and employee benefits and their interaction with government benefits.

The purpose of government benefits is to help people in need. That is a noble idea. The trouble is that when you give people “economic outpatient care” they respond by working less and consuming more.

Over the last century the government has constructed a huge structure of benefits and the result is a lot of people on the lam, doing a minimal amount of work and cunningly using the system to extract the maximum of free services.

It is said that if you finish high school, don’t have child out of wedlock, don’t get divorced then your chance of being poor is pretty small.

But the whole apparatus of government benefits is set to assure that if you do drop out of high school, do have children as a teenager, do get divorced, then things won’t be too hard for you.

When you have a vast apparatus of means-tested government services supplemented by a raft of employer-paid first-dollar employee benefits then you have destroyed the market in basic human needs. You no longer know how much health care people would buy if they had to pay for it, and how they would balance their consumption of health care against other human needs.

For instance, Americans are buying gigantic houses and SUVs these days. Would they be buying smaller houses if they paid a bigger share of their health care costs out-of-pocket?

We know that whenever the government meddles with a market in products or services that sooner or later the supply of products and services gets out of whack.

Wal-Mart is a company that knows that it must mark itself to market every day. It must mark itself to market when it buys products for its customers, and it must mark itself to market when it hires new employees.

Most of all, Wal-Mart has been very careful not to make rash promises to its employees. It has held off giving them first-dollar health insurance or defined benefit pension programs. It doesn’t take a rocket scientist to figure out why. Make an open ended promise like that and you will likely end up destroying the company and the jobs it provides.

Does Wal-Mart take advantage of its employees? I hope so. That’s the idea of the market economy. You buy low and sell high. Still, when Wal-Mart opens a store it generally gets thousands of people applying for the hundreds of jobs. That has to mean something. It has to mean that some people really value a Wal-Mart job.

But the message hasn’t got to the politicians yet.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.” —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing

Churches

[In the] higher Christian churches… they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

Class War

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”

Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

Conservatism's Holy Grail

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Drang nach Osten

There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

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