Does Anyone Believe in Free Markets Anymore?

Looks like Virginia has its own version of an anti-Wal-Mart bill. A bill winding its way through the General Assembly may not force the retail giant to pay health insurance to all of its employees, as our neighbor to the north did, but the legislation does restrict the ability of Wal Mart and other giant retailers to compete in Virginia.

The Senate Commerce & Labor Committee has endorsed a bill that passed 98 to 0 in the House of Delegates that would prevent Wal-Mart or other retailers from opening branch banks in their Virginia stores under the auspices of an industrial loan association. But the bill specifically grandfathers First Market Bank, which is owned in part by the Ukrops family and located in most Ukrops grocery stores in the Richmond region.

I’m a big fan of the Ukrops brothers, who have contributed generously to worthy Richmond causes, and I shop regularly at their stores. But I don’t see why they should be allowed to put branch banks in their stores while their competitors cannot. There may be more to the story than appears, very briefly, at the bottom of Greg Edwards’ article in the Richmond Times-Dispatch today. If so, I would like to know what it is.

You can view the bill here.

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21 responses to “Does Anyone Believe in Free Markets Anymore?”

  1. Lucy Jones Avatar
    Lucy Jones

    I’m not sure what I’m missing… I don’t really know a lot about Industrial Loan Associations.

    I don’t see the part about First Market Bank just:
    shall not apply to any industrial loan association with an affiliate engaged in commercial activities as of January 1, 2006, provided that ownership of such industrial loan association is not thereafter transferred to another company that engages in commercial activities

    Also, it says
    No industrial loan company, chartered under the laws of another state, shall establish and maintain…

    Can they not charter under the laws of Virginia and still have the branch in the local wal-mart stores?

  2. Anonymous Avatar

    I suppose First Market is grandfathered because you can’t make ex post facto laws in this country (and that’s good) but as to your general issue, why no, the General Assembly is not about protecting free markets — it’s about using the power of the state to stick it to your competitors. Duh. Now who gains if Wal Mart is prevented from putting banks into its stores. Hmmmmmmm. Ten seconds.

  3. RedBull Avatar


    Check out this article. It may answer a few of your questions.

  4. Anonymous Avatar

    Remember folks, before C&L voted on this bill, Senator John Watkins warned all of his fellow committee members that a very similar bill passed out of “Corporations, Insurance and Banking”(which has been replaced by simply “Commerce & Laobr” because banks are no longer a major factor in VA) years ago that would basicly not allow VA banks to conduct business across state lines….and where are all those former big Richmond banks and their thousands of educated employees now? In Charlotte, NC! Be careful what you ask for.

  5. James E. Martin Avatar
    James E. Martin

    Providing Health Care to employees is seen by many if not most as a universal right in a civilized society.

  6. Jim Bacon Avatar
    Jim Bacon

    The article cited by Red Bull above quotes a certain Bart Narter, senior analyst at research and consulting firm Celent LLC:

    He said [Wal-Mart], which is “remarkably efficient” about costs, could offer consumers better savings rates and checking account deals than local community banks. That could cause consumers to switch their money to a Wal-Mart bank.

    Better deals for consumers! Is there no end to Wal-Mart’s perfidy? This looming monster must be stopped at all costs!

  7. James Atticus Bowden Avatar
    James Atticus Bowden

    NoVa Democrat: Employer provided health care is a labor incentive from WW II in the US. It isn’t a right.

    Health services aren’t a right.

    There are far better ways to provide for health care, just like retirement, through the market and communities of common interest -also using the market.

    I don’t expect socialists to understand. But, capitalists get it.

  8. Lucy Jones Avatar
    Lucy Jones

    There are far better ways to provide for health care, just like retirement, through the market and communities of common interest -also using the market.

    That’s a lovely idea on paper but with the greed of today’s companies, I fear it would mean no health care for anyone but the rich.

  9. Avatar

    Confessions of a Wal-Mart junkie:

    1. This move is totally protective for the entire banking & consumer finance industry because Wal-Mart already runs its own proofing department and hardballs all of the credit card companies. Thus, it’s Wal-Mart vs. Financial Services Industry and the people against Wal-Mart aren’t pinko commies – they’re scared businesspeople. An ILA is the first step toward the “Wal-Marting” of our entire financial system…which would result in “extra low prices” all around for consumers, but throw the labor market into turmoil (do the traders on the floor of the NYSE really want to wear those blue vests and happy face pins?)….

    2. If Wal-Mart applied it’s methods to the health care industry, would we have “extra-low prices” in that too? Some already offer a panoply of consumer services in health (pharmacy, optemetrics/opthamology/nurse-in-a-box). If Wal-Mart started “doc-in-a-box” operations, I suspect they’d bring a ruthless efficiency that could shift patient behavior toward an issue that Jim Bacon brought up months ago (the 80% of medical conditions and costs that are related to preventive medicine).

    3. The Ukrops things is comical because they’re already kicking Ukrops’ butts with local Market share in Richmond (Ukrop’s new “Consistent Low Prices” mantra sounds familiars…hmm).

    I gotta go with Wal-Mart on this one. I love those extra low prices…

  10. James Atticus Bowden Avatar
    James Atticus Bowden

    Lucy, ya gotta read my stuff… I did a piece that showed the data that a person working minimum wage for all of their live – NEVER -= getting a raise, IF they had the full 12.6% of Socialist Security dumped into an IRA/401k that made 1% less than the NYSE average for the past century (and back to 1790), the person would have a nest egg of over $400k, pay themselves 3 times what SS pays and leave the nest egg to their family.

    If year or so you read about a laborer or someone who dies and leaves a fortune they accumulateted from their meager wages. It is the miracle of compound interest.

  11. Lucy Jones Avatar
    Lucy Jones

    Mr. Bowden,

    I thouroughly read your site some time back and I was (and stil am) very impressed. That’s not to say I will ever understand everything I read but what I could grasp, I agree with.

    Even though I do invest what I can, I see no way to afford healthcare once I retire. What I was really commenting on was health care, not so much saving for retirement.

    I’m really concerned about the growing trend of big companies not providing health care for their employees. It seems that there are so many people willing to work for little or no benefits that these companies no longer feel the need to offer benefits to attract good employees. If there is no pressure for private companies to provide health care insurance and living wages and the government is not able or willing to provide any ways to cap or somehow slow down rising healthcare costs, there’s nothing at all people in income brackets below upper class can do to self-provide healthcare.

    I don’t know what the answer is. I understand that if government provides health care then we are bound to experience problems with supply and quality of care. Also, the government could then decide which higher-cost ailments it would or wouldn’t cover and many would be at a disadvantage. I also understand that it wouldn’t be prudent to force private companies to provide healthcare as part of “normal overhead” expenses. That could be detrimental as well. Like I said, I don’t know what the answer is but it really does concern me.

  12. J Hinton Avatar
    J Hinton

    There are far better ways to provide for health care, just like retirement, through the market and communities of common interest -also using the market.

    I don’t expect socialists to understand. But, capitalists get it.

    Not to defend our communist friends, but capitalism sure did wonders to china’s health care system:

    From that bastion of socialist support, the Economist:

    Where are the patients?

    A quick highlight:

    “Mao Zedong, for all his egregious faults, would have done better at providing [health care]”


    “China is beginning to discover that market forces alone cannot produce good health care.”

  13. James Atticus Bowden Avatar
    James Atticus Bowden

    Lucy, I think there are straightforward answers but big government folks hate them.

    The answer for health care is basically the same as for retirement.

    You grandfather folks who have a committment from their government and have already made their investments. They get the lousy benefits of medicare, ss promised.

    Folks who are younger save for personal retirement and health savings. You allow communities of common interests – extended families, churches, co-workers, communities to pool their resources – and get a tax break to do so – to provide MULTIPLE safety nets. You set government up as the last and low safety net for those who somehow avoid every opportunity to provide for themselves.

    You reduce government spending while folks are moving all this former tax money into retirement and health savings accounts.

  14. Lucy Jones Avatar
    Lucy Jones

    For this plan to work, wouldn’t it be true to say that people would need to be able to save for retirement and health care using the same amount of money that is currently being taken out of our check for HI and OASDI? Where can I get health care and save for my retirement with my $100?

  15. James Atticus Bowden Avatar
    James Atticus Bowden

    Lucy, If 12.6% went to retirement and 3% went to health care from a minimum wage job (for younger workers not folks already poorly invested in socialism and the Ponzi scheme) for all of a person’s lifetime – they would be just fine for the most part. The additional communities of concern to pool resources could take care of the catastrophic and long term cases.

  16. Lucy Jones Avatar
    Lucy Jones

    I agree with the retirement part but 3% for health care?

    Say if minimum wage was even as high as $7/hr. A minimum wage earner works 40 hours/week – 2,080 hours per year. That would be 14,560 per year total earnings. 3% of those earnings would be $437/year. How can that cover anyone even for non-catastrophic events: regular screenings, flu shots, the occasional infection, etc.? That $437 wouldn’t even cover one episode that required 1 x-ray or blood tests. I suspect most healthy people have at least that much expense in one appointment these days.

  17. James Atticus Bowden Avatar
    James Atticus Bowden

    Lucy, It’s over a life time. I’ve read (not memorized) the numbers about how much of healthcare costs are spent in the last 6 months of an older person’s life.

    There will be years when a young person spends nothing and saves everything.

    The costs you cite now – are at least x3 their real market price based on admin costs, recovery etc. – may be more like 4 or 5 times greater than their real cost today. With more market forces in medical care, that cost may get even lower.

  18. Lucy Jones Avatar
    Lucy Jones

    Oh, I see what you’re saying. The actual costs of health care would be lower as a result.

  19. Anonymous Avatar

    The number I heard was 95% of health care costs occur in the last two years of life.

    But I don’t buy your argument. I was unfortunate enough to have a serious health crisis in late middle age. It knocked out three of my best years of earnings. (note: disability insurance is more important than healt insurance. If you die, no sweat, if you are broke, you have to live with it.)

    I am now well enough to live my life, but my prescription bill is over $7000/year, and will be until I die. I am not insurable as a private citizen, at any price. Only so long as I am able to hold a job am I insurable under a group plan. The experience I had would have wiped out a health savings account.

    My wife had a problem that merely looked like it might be serious (it was nothing, as it turned out), and her coverage was canceled, retroactively, which stuck us with $9000 in retail cost bills that the insurance company had previously paid the providers only $3500 for.

    I later learned that our esteemed neighbor to the north was suing my company for the same practices. In Virginia, the insurance commissioners office was all too happy to tell me what the inurance company’s rights were.

    Before health care can be provided by the market, we will have to clean house on the insurance companies.

  20. James Atticus Bowden Avatar
    James Atticus Bowden

    Anon: Sorry for your illness and medical condition requiring so much cost.

    Many reforms are necessary no doubt.

    Likewise, the idea of communities of common interest are helpful to put enough money in the common pot so the 5%, you, are covered by the 95%.

    Nothing will be perfect. But HSAs are a much better solution, over a life time, than the current schemes.

  21. Ray Hyde Avatar
    Ray Hyde

    I think I agree.

    One problem is that we expect insurance to cover every minor ailment. Some large deductible would go a long way to lowering premiums, say 5% of income.

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