Business Week: “In recent years, Americans have enjoyed the glories of falling consumer prices. It’s commonly called the Wal-Mart (WMT ) effect: Huge retailers use their buying power to force suppliers to cut costs, then the retailers pass some of those savings on to their customers. Forced to stay competitive, other retailers follow suit. The result: The price of, say, a DVD player, plunges from $1,000 to $50 in just a few years. It is, for consumers at least, the sort of virtuous cycle that economists dream about. And it has worked for everything from gizmos to food. But it hasn’t worked in one corner of the market — health care, which accounts for 15% of the U.S. economy and is growing. Why don’t the same market forces that drive price competition for DVD players keep health costs from rising at double-digit rates?”
B Jackson on November 14th, 2004 at 9:12 pm
WalMart contributes to rising health care costs — for everyone else — by offering virtually unaffordable health insurance to its employees. WalMart employees in turn must turn to emergency rooms and publicly-paid for health care, raising the costs for the rest of us.
WalMart is a Ponzi scheme with the rest of us in the role of victims.