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Tuesday, September 27, 2005
Market power
The federal government is by far the largest economic player in the American market. I have heard figures that put it at 20% of the US economy. When you have that big a share you have a lot of power to set prices--think of how Walmart can force its suppliers to sell to it at the lowest price possible or the way McDonalds can demand low beef prices. The government has that power in spades.
So think about how George W. Bush has used that economic power. When it come time to award government contracts he could force firms, thru the bidding process, to give the US government rock bottom prices. "You want a piece of our trillion dollars in spending? You better give us a hell of a deal or we'll find someone else who will." But of course he doesn't do that, does he? In Iraq he gave out billions in no-bid contracts, mostly to firms with connections to his administration. In the rebuilding after Katrina he is doing the same, simply handing out contracts to friends of the administration without even a nod to competition. (Hmm, his trail of failed businesses starts to make a little more sense.)
And of course he and the Republican congress did the exact same thing with the Medicare drug bill, even going so far as to write the law to PROHIBIT the government from bargaining with the pharmaceutical companies for lower prices. Every decent sized insurance company in the country uses its buying power to demand lower prices but not W and his pals.
Ah, but when it comes time to pay hourly workers, as opposed to large corporations, W starts throwing the government's weight around. For the rebuilding of the gulf coast after Katrina he has suspended the section of the Davis Bacon act that requires the government to pay the local prevailing wage to all hourly worker on government contracts.
So under W it works like this: to the corporations the government says charge us (and the tax payers) whatever you want, we won't ask for a discount, heck we won't even check to see if someone else is willing to work cheaper. But for the the hourly employees who will actually do the physical labor he issues an executive order to suspend a democratically passed law that ensures workers aren't ripped off. And it's not even a law that showers some utopian level of benefits on workers. It's a law that simply says the government has to pay people the same wage in the area that every other employer pays, they can't use their market power to low-ball working stiffs.
Now why would someone do something like that? As usual, that's a rhetorical question. I already know the answer and so do you.
