I really liked what Robert Reich (Secretary of Labor under President Clinton) said yesterday on NPR’s Marketplace. You should really give it a listen here.
But since you won’t, let me restate his commentary in my own words.
Why are prices so cheap at Walmart? As most people know, it is because Walmart is so honkin’ huge, that it can demand lower prices on goods and services from its suppliers. These savings are then passed on to us, the consumers. That’s the free market at work, baby, and it’s pretty easy to grasp.
But consider this. The United States federal government is bigger than Walmart. Waaay bigger. Federal government spending accounts for one-fourth of the GNP. So you would think that, like Walmart, the U.S. Government would be able to have considerable clout in getting great deals from the companies that supply goods and services.
So why doesn’t it? Why doesn’t it require companies to compete for lucrative contracts to clean up Katrina and rebuild New Orleans? Why, instead, does it simply give no-bid contracts to companies like Halliburton, and allow these companies to pay their employees sub-standard wages (by suspending the Davis-Bacon Act?)
You already know the answer to these questions. Admit it. Do I need to go on?