How Economic Intervention Skews The Marketplace

[wkmac]

Without the tax credit, would companies allocate resources for this?

[video=youtube;-cLrXYmUurE]http://www.youtube.com/watch?v=-cLrXYmUurE[/video]

How many more interventions in the marketplace cause resource misallocation that skews the market itself? Who benefits from this market intervention and who lobbied for it in the first place? Sad part is the Congressman in the piece isn't smart enough to just say, "end the tax credit and most all of this will just disapppear on it's own." He seems intent on just adding more pages of regulation to the Federal Register.

Here's an interesting question to ponder. With the insurance premium subsidized by the State and it's tax credit, does UPS for example maintain an insurance policy on retirees and upon death, UPS in effect gets back some or all the money paid out in retirement costs? I have no answer on this but in the current market I could see where this might make sense. If they do this (again I have no proof either way) any claim of harm by the company on retirement costs (hourly or management) become very weak IMO.

 

[Babagounj]

Walmart has been doing this for years, on current employees.
This story came out several years ago, when after an employee died someone at the life insurance company let it slip out about a $1M policy Walmart had in place .

 

[wkmac]

Walmart has been doing this for years, on current employees.
This story came out several years ago, when after an employee died someone at the life insurance company let it slip out about a $1M policy Walmart had in place .

You're correct Baba and this is the kind of "corp. welfare" or better called market interventionism that needs to be stripped out of public policy. In a real sense, the average taxpayer is saddled with a higher tax burden as certain business interests are able to shift their costs to reap a future reward and insurance companies enjoy a revenue and profit stream thanks to these same taxpayers. IMO, this is naked welfare on the same order as public welfare and if one is against public welfare (I am) then I have to be consistent and demand the end of this type of welfare too!

I also oppose on the grounds of Freemarket ideals as this type intervention skews the natural marketplace and causes mis-allocation of resources which is the cause and effects of booms and busts, a terrible reality we've all learned the hard way.