May 5, 2005 [LINK]

Cover the uninsured?

Starbucks had a full-page ad in the Washington Post heralding "Cover the Uninsured Week," a prime example of corporate feel-goodism. Almost no one seriously questions the notion that expanding insurance coverage to a broader segment of the population would be a good thing -- as long as someone else pays for it, that is. Most Americans are blissfully unaware of how the health care sector operates, because they are relatively insulated from the ultimate consequences of their cherished health insurance benefits: exponential growth in the cost of medical services. Hence arises the extreme hypocrisy of calling for universal health coverage while hiring illegal nannies and making excuses for those who cut business expenses by employing illegal aliens who are not eligible for such entitlements. The fact that health benefits are largely untaxed means that average folks don't know how much they are really paying for their health care, indirectly that is. One of these days the government will have little choice but to start taxing employer contributions to health insurance, which will provoke a rebellion by the clueless middle class. The problem is not that poor people don't have insurance, it's that the politically mandate entitlements demanded by the middle class create huge distortions throughout our health care sector, resulting in excessive tests for some and inadequate or tardy treatment for others. Maybe we should have an "Uncover the Insured Week" instead.

Here's some background on the basic policy issue. Stuart Butler of the Heritage Foundation proposes modest incentives via tax breaks to make it easier for small businesses to offer health care insurance coverage, accepting the mainstream premise that universal coverage is the ideal goal. His plan would do nothing to address the insurance-caused upward spiral of health costs. In contrast, John Goodman of the CATO Institute is keenly aware that drastic reforms of entitlements are essential for us to maintain socio-economic vitality. Many people consider libertarian arguments too extreme, but in the long term, such market-based policies are the only alternative to gradual decay à la Europe. The idea that public policy can ignore fundamental objective economic realities and be based entirely upon the subjective preferences of the public is flat-out delusional, but pandering to popular delusions is one of the things that democracies do best.

In terms of corporate politics, it is entirely possible that Starbucks is motivated by bottom-line concerns as much as by pandering to its cleints' egos. They don't like having to compete against firms that are less generous to their workers, or who pay less to foreign coffee bean suppliers. There are currently five Starbucks shops or booths in Charlottesville, and one more coming, but absolutely none in the Shenandoah Valley! Is it possible that this might have something to do with the sharply diverging political affiliations on the respective sides of the Blue Ridge? Martin Sieff at The Globalist thinks so. After the last election, he made a provocative interpretion of American consumer tastes in psycho-sociological terms:

Wal-Mart, for its part, wants you to imagine that you are living in value-driven, small-town America, where down-to-earth people like yourself go about their everyday lives.
Starbucks, on the other hand, wants you to believe you are in a sophisticated club or restaurant where only you and the Nobel Prize winner for molecular biology at the next table drink that particular sugar-free, vanilla, extra-foam latte.

Seen from this perspective, the division of Republicans and Democrats, 'red' America vs. 'blue' America, makes vastly more symbolic sense. The election returns have made sure of that.
In this sense, shopping at Wal-Mart is about doing well for the family -- while the needs of the nation are neglected.

In contrast, sipping coffee at Starbucks is ultimately about individual psychological and emotional health. It is about taking a few minutes off to stroke the frazzled nerves and the wounded ego.

In short, Starbucks is selling classical short-term gratification absolved of guilt, and its left-liberal politics are just one part of the marketing campaign.