The Bet

Has Wal-Mart suddenly turned blue?

Last week the world’s largest private employer announced that it supports plans to reform health care. Since Wal-Mart has consistently opposed mandating employer-provided health insurance, this change of heart is significant. After all, if a company that employs half-a-million people supports employer mandates, who can oppose them?

But we need to keep in mind the political realities of reform. If reform comes and you oppose it, you’ve lost standing in shaping that reform. If reform fails but you supported it, you haven’t really lost anything. Kind of like Pascal’s wager.

Understood this way, Wal-Mart’s position makes sense. By virtue of its size, Wal-Mart will probably always have a seat at the table. But because people cycle from the private sector to government service and back again, Wal-Mart’s influence should only grow. Call it the retail-industrial complex.

Douglas R. Tengdin, CFA
Chief Investment Officer
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