An Economy of Newmarks

Johnny Carson used to be fascinated by unusual collectives describing groups of animals. Such as; an exaltation of meadowlarks, a chattering of choughs, or a charm of finches (inevitably leading to a few made-up ones, such as the one describing another of his obsessions; a shaft of proctologists).

Which is our way of welcoming another Blogging Newmark to the fray. Katie makes a very important point about health care here:

The trouble with third-party payers is that if you aren't paying for something yourself, you will be less price-conscious. For example, you're more likely to order filet mignon when your company is picking up the tab than when you have to pay for it yourself. When you don't care about the price as much, you'll consume more of it--filet mignon every night!--and the increased demand will push prices higher. In addition, sellers will have less incentive to be efficient and keep prices low because you won't be shopping around for the best deals anymore. In short, third-party payers cause higher prices.

A point lost on a woman probably more than twice Katie's age:

Californians came oh-so-close to planting the flag of mandated health coverage on the U.S. mainland. Proposition 72 went down by a hair, despite a $9 million campaign to sink it. California's model was Hawaii, which requires employers to insure workers who put in at least 20 hours a week.

All eyes have now turned to the state of Washington. Lawmakers there are considering a bill that includes much of what was in Prop 72.

Older, but not wiser. Ms Harrop favors the approach:

What Prop 72 would have done is make California more competitive for the nice companies that cover their employees. The race-to-the-bottom mindset never considers the possibility that raising labor standards evens the playing field for companies that already take care of their workers.

Finally, there's the moral issue. When it comes to being a good corporate citizen, certain things are off the table. You don't wreck the environment. You don't ignore worker-safety laws. And you shouldn't be able to beggar your workers on benefits — especially if you're one of the richest companies on Earth.

But, as Katie knows, and Froma doesn't, even the richest companies are constrained by the need to charge prices that customers will voluntarily pay. Meaning that Wal-Mart is the nice company here.