Friday, October 28, 2011

Elaborating On Greed


Cutting Down Trees With Sticks

A good lesson in free market economics was my professor’s story about a hundred workers chopping down a tree with sticks. Along comes someone with a knife, and then the question now becomes whether keeping the workers employed is more important than introducing a sharp metal object that would empower one man to do the job of a hundred.

The Governor’s budget proposal attempts to swing a hundred sticks without much in the way of lumber production. That is the point after all. The Governor believes government "continues to be a safe haven" for employment, while the Treasurer refers to the ASG payroll as his "top priority". It's a failure of leadership to not introduce a knife to this budget.

The semi-autonomous agencies have followed in lockstep. The only restraint on their personnel costs has been the ASG’s inability to meets its subsidy obligations. Their only sense and purpose of profit is continual bureaucratic expansion.

Meanwhile, tax revenue is expected to decline. Overall tax collection looks to be $800k less than FY11. FY10 income tax collection is a whole $2 million more than what they expect to collect next fiscal year, largely attributed to the federal funds that followed into the territory following the tsunami. The Governor 2% wage tax increase can only account for a projected $600k increase from FY11 to 12, and that’s if the ASG is lucky.

The economy went from bad to worse since FY10, and that’s just the point. The worse the local economy gets, the worse tax collection becomes – no matter how much you raise rates. And economists argue that raising those rates would only discourage the economy even more.

Then, if we distribute next year’s projected number of locally funded ASG workers through Mrs. Langford’s breakdown of the current workforce and average salaries, it will take all $46.5 million in projected tax revenue to cover their payroll. In exchange, other needs such as repairs for elementary schools, expansion of the prison facility, simple road repairs, hospital referrals, etc. go unfunded.

That is the fallacy of maximum employment as an economical goal. Think of the worker with the knife who displaces the hundred using sticks. Employment in the short-term may be hampered, but his production now allows more lumber for the displaced workers to make homes, furniture, paper and all sorts of products made out of wood.

We cannot hide or deny the current economics that portend a national trend towards austerity. We need to consider reforms already out there to get ahead of game locally. Like tying the local workforce to 5% less than what’s projected to be collected or shifting emphasis of revenue collection from taxation (currently 70%) to fees and charges for service (11%).

The Heritage Foundation found that the most prosperous countries are the most economically free. Their “Index of Economic Freedom” evaluates how much of a country’s government spending is a percentage of its GDP. In their view, “excessive government spending runs a great risk of crowding out private consumption, thereby thwarting the choices of individuals”.

Hong Kong’s (ranked #1) government spending is only 18% of its GDP while American Samoa (whose GDP was $537 million in 2007 according to the BEA) is looking to spend close to 90% with the Governor's budget proposal.

We can see which country is benefiting more using a knife rather than sticks.

In The Spirit Of Transparency

The real sign of a maturing democracy is not in a society’s buildings, roads, infrastructure, industry or even its technology. It’s in the ability of its participants to be graceful in the acceptance of criticism and in their courage to stand up for their principles, whether liberal, conservative, libertarian or any other philosophy.
The more fuss the better, because another sign of a strong democracy is the belief that citizens have the capacity to judge for themselves what arguments stand on the merits and those that do not.
In this respect, I give a hesitant “thumbs up” to the Governor for signaling an openness to debate on his budget proposal. Hopefully, he means what he says.
If he really seeks transparency during this debate, then he can post his budget proposal online. The US Congress, under Republican leadership, makes it mandatory for all legislation to be viewed online by the public in a 72 hour window.
He would serve the interests of all American Samoans by giving everybody the opportunity to chime in with their own two cents.
On top of accountability and determining what our priorities should be, a budget debate is also about what system we mainly expect to achieve our recovery, whether the private sector or government.
Many economists have likened the economy to an engine. What engine (the private sector or government) is more likely to produce a higher speed of recovery the more we put money and resources into it?
That is the line the Governor’s tax increases draw in the sand. Do we want to send more of our limited resources into the engine of government or do we entrust our entrepreneurs and consumers with more of their own money to drive the recovery home?
It’s a debate always worth having when the budget of our government is being proposed. Posting the budget online will further advance that cause in a “spirit of transparency” by the Governor.

The Great Leader Who Could Have Been

The most sincere compliment conservatives can offer President Obama is this: he is a great guy, but his policies stink. That’s really unfortunate because the president is indeed a great guy. He is smart, articulate and charming, and as the nation’s first black president, a majority of Americans have had high hopes for this historic presidency.
But his pioneering of the political frontier was not accompanied with an equally inspirational message. President Obama recently took a look back to Reagan after the “thumping” he and his party received in the 2010 midterm elections. For Obama, Reagan’s comeback after his own “thumping” after the 1982 elections was more about strategy and tactics rather than the essence of the former president’s message.
Nothing could be further from the truth. While Reagan was indeed a great communicator, it was his message of freedom that animated his spirit of governance and served as inspiration for millions of Americans and peoples around the world. President Reagan defined tyranny at home and aboard in every speech, and offered reason and hope for every man to achieve freedom for themselves and their posterity.
Obama lacks a similar inspirational message. Americans are so abhorrent to the tenets of big government liberalism that the president can’t get passed the mask he has to masquerade in. Instead, his speeches are limited to class warfare and name-calling, evoking envy as liberals often do when they fail to make their case to the American people.
If Obama were to define the great liberal project of our time, he would have to get into the details of individual and industry mandates, price caps, minimum benefit levels, and this mandatory regulation and the other to make the whole system work. When an American asks the question “why”, what other answer could the president give than “It’s for your own good”.
Not the stuff great presidents are made. Not the kind of message Americans are looking for.

Stuck In Second Class

Cable TV Critique Needs Some Perspective

Greed in the 21st Century

And The Show Goes On...

The Liberal Let Down-A Depressive Disappointment

Budget numbers don't add up

Government Shutdown

What politics should be all about

ASG need for limited Government

Home Economics

The Future Belongs to Us

Shrinking Pie Equals Bad Politics

Without Foundation?"

With Eyes Wide Open

A Spending Problem, Not A Revenue Problem

In These Difficult Times…

Budget Busters

It’s Not About The Money

The Flaws of Progressive Taxation

Just A Little More Criticism

Avoiding Taxation

Tax Justifications

Failure Of Governance

Protecting Our Culture

Our Culture is not the Problem

Irreconcilable Contradictions

Saturday, February 27, 2010

The Future of Off-Island Referrals

Talifaitasi W. Satele

When Governor Togiola mentioned earlier in the year that government already operates businesses (his examples were ASPA, ASTCA and ASCC), he forgot to mention LBJ. Had the government hospital been popular with the People, believe me, he would have touted it as a shining example of government at its best.

Yet, it is not. Perhaps the Governor’s near death experience there didn’t help its standing with him either (no offense, just making a point). When that government hospital couldn’t cure him, he was transported via a government airplane to yet another government hospital (Tripler), only later to be transferred to a private hospital (Straub) where they finally saved his life.

There were two lessons that we’ve learned from the above. First was that not even the Governor’s life is safe at the LBJ. The second was that many of our People, like Togiola, rely on the advances of a largely private sector health care market in the US. Our government hospital may provide universal access, but it unfortunately does not provide the critical services needed to render off-island referrals unnecessary.

The ASG, a long time ago, assumed the responsibility of providing healthcare to all of our People. Yet its actions imply that it has no such duty. Its budget is way over in the red, its spending and purchases are extremely questionable, its revenues in the tank after years of watching our economy fall over the cliff.

There are three important considerations that arise from our medical dilemma.

First is that this is not only a local issue (especially in regards to off-island referrals). In addition to getting its financial house in order, the ASG should argue very loudly (along with Faleomavaega) that waiving the Cabotage law in an effort to lower airfares is really a matter of life and death. The ASG and the Congressman should also look into arrangements where our People can buy insurance from other States, especially if there regulatory hurdles that now stand in the way.

The second consideration is on the national level, where Democrats in Congress are looking to control health insurance prices, mandate Americans to purchase health insurance plans, regulate and even outlaw certain health insurance practices, and compete with the private sector by creating a public option. The goal, of course, is to provide universal access.

That sounds a lot like LBJ. Perhaps Faleomavaega should invite Congressional Democrats to take a trip to LBJ to get a picture of what a government takeover of the health care industry would look like before enacting any major overhaul.

The last but most important consideration is what makes the US healthcare market the most advanced provider in the world. It’s because, for the most part, it’s still largely free-market. Prices for drugs, services, doctors’ fees, equipment and surgeries have governmental oversight but are not controlled. The system still relies heavily on personal responsibility and participation in the form of co-payments and the costs of insurance plans themselves.

There are plenty of inefficiencies in the market today, but it’s a march toward a freer market based system that will make it better, not an LBJ-styled government bureaucracy we’re all too familiar with in American Samoa.

Tuesday, January 26, 2010

Something Is Not An Answer, It’s An Excuse

Talifaitasi W. Satele

I find it quite ironic that the answer to COS’s departure due to government intrusion (the minimum wage law) is more government.

How nice it is for government to offer itself as the solution to the very problem it created. Hence the excuse that it must do something rather than nothing.

Yet the last thing we want is for our government to make matters worse. That is not an unreasonable demand for the People to expect of their elected representatives. Something is better than nothing— when that something is actually better than nothing.

If that is not the case, then lawmakers earn every single dollar we pay them by deciding to sit on Governor Togiola’s proposal.

Our objection to the governor’s proposal is the government’s poor track record in running businesses. ASG’s involvement into ASTCA’s business has meant that the semi-autonomous company’s revenues go to pay for the ASG’s loans rather than improving services and its infrastructure. ASG’s involvement into ASPA’s business has meant that the ASG can stall and refuse to pay its bill effectively forcing the semi-autonomous company to pass such costs along to the rest of its customers.

The reason government is not any good at running business is because it doesn’t have to play by the same rules as business. No business could do what the ASG has done with its two step-children noted above.

So here are some suggestions to improve the Governor’s proposal. 1) Hold the Governor, all sponsoring legislators and all private parties involved liable for the $5 million of taxpayer money. 2) The ASG cannot bail out the operation should it become a failure; if it fails, it fails, and the ASG cannot leave taxpayers holding the bag again and again.

Those two items alone will make his plan more market-driven and responsible as liability and failure for the parties involved are on the table.

Nevertheless, the Governor is right that lawmakers should offer an alternative. That alternative should be an agenda that incrementally reforms government in ways that lead the ASG to protect and respect private property rights, enforce contracts, level the playing field in terms of paying for needed government services, lower the costs of those services and reduce its bureaucratic burden and red tape.

That is an agenda that supports freedom, and history has demonstrated that freedom and prosperity go hand in hand. Now that is something that’s definitely not an excuse.

Saturday, January 09, 2010

The Market Will Determine Aspire's Fate

Talifaitasi W. Satele

Despite the strongly held beliefs of either supporters or opponents of the ASPIRE legislation, it will be the marketplace that ultimately determines whether it is a success or a failure.

The market is made up of people (both consumers and producers) who don’t respond to elaborate speeches or emotional arguments. They react to their own self-interests whether that be low costs, high profits or some other value they treasure more than the before-mentioned two.

In absence of ASPIRE, the market has determined the price of tuna. On the consumer side, that price is determined by a number of things: household budgets, the price of substitutes and complements, and market trends. From the maximum price that producers can trade their product comes the various forms of its economical costs: profit (which is called opportunity cost), labor cost and capital cost.

To use the force of government, as ASPIRE clearly does in its elaborate scheme of incentives and penalties, to fashion several portions of the tuna market will have effects on the others. Whether those effects end up being beneficial to the people or not is for the market itself to decide.

If this legislation increases cost, that cost has to be paid by someone: either the consumer or the producer. If the consumer faces a higher cost, he may choose to consume a different product (e.g. corned beef instead of tuna). Fewer consumers mean fewer cans of tuna to produce which means fewer jobs. If the producer faces a higher cost, he may choose to do something else or he may not be able to attract or even retain shareholders/investors as his profits dwindle. Fewer producers or investors means less capital which means fewer jobs.

Besides cost, let’s consider whether even reducing our catch of tuna is a worthy goal. Achieving that goal will not happen in a vacuum. Fewer fish being caught will lead to less supply, which leads to higher costs which leads to fewer jobs.

ASPIRE is supposed to be about “jobs, jobs, jobs”. The market, if it could speak, may testify that this legislation does the exact opposite.

Wednesday, December 23, 2009

The AG Is No Economist

Talifaitasi W. Satele

Assistant Attorney General Kornegay says that “the raising of these prices for necessities harms the people of American Samoa and its economy”. He argues that his statement is a “fact”. However, Jerry Taylor and Peter Van Doren of the Cato Institute argue in their essay, Let ’Em Gouge: A Defense of Price Gouging, that “price gouging — like spinach — may be unappealing at first bite but it’s good for everyone in the long run”.

Obviously, there are economists who would beg to differ with Mr. Kornegay.

However, my concern is less about the economics of it all and more about the lack of recognition by our government that these storeowners have done nothing wrong. Their alleged crime: ask for a higher price for their property, their merchandise after a natural disaster.

If we are all free men, then we assume that everyone’s rights are respected and protected by the government and that we only trade with one another on a voluntary basis. That basis then is our own self-interest with the seller seeking the highest price possible and the buyer shooting for the lowest. Where the two meet in the middle is a voluntary transaction between two free individuals, a.k.a the market price.

It should be no more a crime for a storeowner to be able to charge a million bucks for something after a natural disaster than it is for customers to get discounted prices, or even for free, from a storeowner who’s going out of business. Yet when the entrepreneur goes out of business and has to get rid of his inventory to discontinue his overhead costs, no one sheds a tear for him as his customers walk away with dead giveaways.

Is it because there are less storeowners than there are shoppers (meaning voters) that his predicament is of less concern to our majority-rule government and grandstanding politicians? Are his rights worth less because his vote won’t help win an election?

None of us have a right to our property when the government can dictate the price at which we can sell it. And government doesn’t fulfill its role of protecting our right to private property when its own law doesn’t even respect the very idea of it.

Mr. Taylor and Mr. Van Doren go on to say that “gouging… sets off an economic chain reaction that ultimately remedies the shortages that led to the gouging in the first place”. While protecting our right to price our own property (regardless of the circumstances) helps more than harms our economy, it is absolutely necessary for a free society to exist.

Tuesday, November 10, 2009

Let’s Prosecute The Thieves Of The Tsunami

Talifaitasi W. Satele

I’ve always been disturbed by the attitudes of government officials who pick on private citizens, businesses and non-profit organizations. They fancy their persecutions as courageous acts of bravery, fighting against invincible villains from whom the public have no protection. What a joke!

Take for example the Attorney General Office’s pledge to prosecute violators of Governor Togiola’s price-gouging law. Is it so courageous to threaten people whose licenses (their very means of living) you can revoke if they don’t do as you say? If the AG’s Office had some real balls, they’d focus 100% of their efforts and resources into prosecuting the real gougers of the tsunami’s aftermath: the thieves who ransacked people’s and businesses’ property in our greatest hour of vulnerability.

That would take real courage right there. Instead of doing what government is supposed to be doing (which is protecting our lives and property), what is the ASG doing now? Picking a fight with the Pago Pago Yacht Club. What cowards.

You know, one of the most important lessons I’ve learned growing up back home is that thugs only respect other thugs. They only pick on people they don’t expect to push back. That’s why the thieves of the tsunami will get away with their crimes while innocent people who live at the mercy of the ASG will continue to suffer under the thumbs of bullies.

Saturday, October 31, 2009

The Black Sheep

Talifaitasi W. Satele

With all due respect to the Governor, sometimes doing nothing is actually better than doing anything at all. In situations such as purchasing the COS facility, I am constantly reminded of one of my mentor’s favorite newspaper cartoons. It depicts a lone black sheep running away from a towering cliff while the rest of the flock blindly follow one another right over it.

Fortunately, in our particular situation, legislators are asking the tough questions that need to be asked instead of going right along as usual.

However, my main concern is not particularly the proposal itself. It’s how Governor Togiola is going about it and how it reflects on how he’s been doing business lately. After making enemies out of anyone who dared to oppose his agenda in the first few years of taking office as governor, Togiola changed his strategy and made them all his “friends”.

There is nothing wrong with that. It’s the “big tent” philosophy. You know, keep your friends close and your enemies closer sort of deal.

But you start running into problems when you expect everyone just to fall in line. That’s a rare occurrence in a home with a family of more than two— let alone a “big tent” full of different interests and agendas.

But this administration seems to expect and assume broad support for anything it chooses to do. That sort of arrogance led the administration to deem it not necessary to get the Fono’s approval before expending funds on a number of items this year.

Assumption of approval replaced actual approval in that case, and that is wrong.

Otherwise, why have a Fono at all? Just assume that a make-believe legislature representing a make-believe people authorized you to spend their real life money.

And who cares if the court orders the ASG to do something; the power of the purse lies with the legislature, not the treasurer. It’s the Fono’s responsibility to address such mandates. The Fono cannot be an equal branch of government unless the other two, let alone its own legislators, treat it that way.

But getting back to his proposal, the Governor is the salesperson in this situation and the Fono (and the people) are the investors. In the free market, you persuade people to risk their own money in backing your plan; you can’t order them to do so.

The Governor has to spend more time convincing us why his proposal is, at the very least, better than doing nothing at all, and not expect us just to follow him over what seems to be a very big cliff.

In that newspaper cartoon, the only thing the black sheep says is, “excuse me, excuse me”, as he makes his way through an unsuspecting crowd. I am very proud that, in this case, our legislators are saying more than that!

Monday, October 26, 2009

Lessons Forgotten

Talifaitasi W. Satele

Governor Togiola has said that the profit motive will not run the new ASG Cannery. So does he expect this company to operate at a loss or barely break even? If this new government entity does not generate revenues above expenses, then taxpayers will be throwing their money down a bottomless pit.

And I don’t believe anyone around here is so naïve as to believe that government officials or workers don’t have a profit motive of their own. If they didn’t, then we could rest assured that ASG employees all worked for free! That is simply not the case.

Nevertheless, the profit motive in government just doesn’t work like it does in the free market. For one, there isn’t the same level of responsibility in government as there is in the marketplace. That’s because the money the ASG will use is not Governor Togiola’s or Mr. Sanchez’s. Whether this venture succeeds or fails, no one here will be held financially liable, and that fact alone makes their decision making process a lot less reliable than someone who has a personal stake in a gamble of this nature and magnitude.

Second, the profit motive in a free market depends on having a very satisfied customer. That’s because the customer is your only source of revenue, and on top of that, he is free to go to your competitor. Government, on the other hand, can continue to tap taxpayers as a source of revenue whether the customer is satisfied or not. Or whether they do the job right or not, or the market is up or down, or they advertise sufficiently or not, and so on and so forth.

We can go all day making the case why ASG involvement in the cannery business is certainly doomed for failure. Is it not enough to take a overall look at the government as a whole and see where and how this thing is going to end up?

But how can anyone blame Governor Togiola for taking such drastic measures? After all, this is what the majority expects a governor to do, and that’s to do something, rather than nothing, especially at a time like this! Our expectations of his office empower him to take almost any measure necessary lest his constituents judge him for not having enough compassion for those who are about to lose their jobs.

However, a popular idiom reminds us that the road to hell is paved with good intentions. In actually using the government to do something to remedy the situation, we only make matters worse.

In times of extreme shakeup of an economy, conservatives-libertarians point to three ideas for policy guidance. They are benevolent ignorance, creative destruction, and believe it or not, having faith. Benevolent ignorance means government ignores a problem so that private actors can more appropriately and efficiently address the situation. Creative destruction refers to the fact that sometimes something has to be destroyed in order for something else to be created and take its place. And having faith means just that: having faith that it will all work out. These are lessons already learnt but easily forgotten; especially for those with little faith indeed.

Sunday, September 20, 2009

Defending the Constitution

Talifaitasi W. Satele

Originally, the US Constitution did not include a Bill of Rights. Federalists argued that since the Constitution didn’t give the government power to infringe on our inherent rights, like Free Speech, we didn’t need those 10 amendments explicitly protecting them. It was a naïve assumption to say the least.

Terrance Jeffrey, a reporter for Human Events, asked former Education Secretary Margaret Spellings, in an interview a couple years back if she could “point to language in the Constitution that authorized the federal government to have a Department of Education.” Her reply: “I can’t point to it one way or the other. I’m not a constitutional scholar, but I’ll look into it for you, Terry.”

She never got back to Mr. Jeffrey because the Constitution doesn’t authorize a DOE.

Supporters of the Bill of Rights did not buy the Federalists’ argument that government would restrain itself to the limits of its contract with the People. They knew better. They knew that the Constitution had to explicitly restrict government from infringing on our individual rights; otherwise, it eventually would.

But what makes the Bill of Rights so effective is that people go up in arms defending them. We will never see Congress ban Free Speech or the Freedom of Religion or the Right to Bear Arms. They can try, but Americans stand up for themselves, and it would be a cold day in hell before any of that stuff happens!

The point being is that no one pays attention to the Constitution unless someone stands up for it and defends it. Sadly, the ASG makes that point all too clear with its budget appropriations (spend first, ask later).

Luckily, we have a few heroes in the Fono who are working to change that. Hopefully, one day, we will have a Fono and a government we can all be proud of.

Friday, September 18, 2009

False Altruism

Talifaitasi W. Satele

We should be wary of folks who preach that we should live our lives in service of others. I say that because they usually don’t practice what they preach. Syracuse University professor Arthur Brooks notes in his book, “Who Really Cares”, that “people who believe it’s the government’s job to make incomes more equal, are far less likely to give their money away” to charities.

Not only do altruists not follow their own ideology to a tee, their rhetoric is often inconsistent. Some try to pass themselves off as advocates of the least fortunate amongst God’s Children, but they won’t extend that same compassion to their brother if he is branded an illegal immigrant. Nor if their brother is of a different race or of a certain income level.

Moreover, altruists contribute almost nothing to the actual welfare of the people they claim to want to help. Most supporters of the minimum wage, for example, don’t provide jobs to anybody nor could they show us how to provide living wages to our people. And some of altruists’ ideas actually harm the general welfare such as price controls or trade restrictions.

All altruism does is provide rhetoric for those who want to sound like they care when they really don’t. So until an altruist provides public access to his own private home, we should take his philosophy with a grain of salt.

Wednesday, August 26, 2009

Plastic Saves Lives

Talifaitasi W. Satele

Have you ever seen that commercial where the setting is in a hospital, and everything made of plastic starts disappearing? The I.V. bags, X-Ray Photos, the bedding patients lie on, etc. After all things plastic have disappeared, the hospital room is bare metal and wood; not a pretty sight at all, especially if you’re an institution charged with saving people’s lives.

As Mr. Kneubuhl acknowledges in his guest editorial dated 8/19/2009, “The Pago Pago Jellyfish”, everything we consume involves the use of plastic in one form or another. Most of our foods are packaged with and preserved by the material. Why? Because plastic’s attributes make that possible.

If another material could do what plastic does at a cheaper price, we would be using it. We use plastic because it’s cheap, very durable and very convenient, and any realistic alternative would have to surpass those qualities if it has any chance of serving as a replacement in the free market.

Nevertheless, it is plastic’s greatest strength (durability) that serves as its greatest weakness in the eyes of the public. It’s not biodegradable (if it were, we wouldn’t be using it the way we do) and it sticks around long enough to cause an eyesore. But that shouldn’t serve as reason to dismiss this product’s blessings, but rather as a point of focus for its proper disposal.

And one can glean as much from the comments on Mr. Kneubuhl’s guest editorial on Samoa News’ website. And I believe Mark would agree with me that as far as plastic being an inherent danger to its human consumers’ health, the science is not settled yet.

But as far as the plastic bag ban being that gentle “prodding” the Chamber of Commerce believes businesses need to do what they think is right, let’s remember how gentle the container inspections at the loading docks were, or the Governor’s ban on 10 year old import vehicles. The first was a boondoggle failure and the latter caused mass confusion with residents (especially for Military Veterans returning home) losing time, money and assets.

Pollution is a problem that involves more than just plastic bags, and their outright ban may have costs that far outweigh the benefits.

Monday, August 17, 2009

Standing With Senator Velega

Talifaitasi W. Satele

What an honor it must have been to stand up as one of the two shepherds who tried their best to protect their flock from a chamber full of wolves. It is not easy to do what is right, especially when the rest of your peers take the easy way out. Yet there he was standing alone; a situation in which righteous men often find themselves.

But I would like the Senator to know that he is not alone in voting “no” to the $200K bill to fund the Heritage Week in Hawaii. He has a whole island of constituents in his corner as they too have never consented to that expenditure— since none of their representatives or senators voted to approve the bill before the money got spent.

The Senator should remind his colleagues that the Constitution serves a contract between the People and the Government. Government derives its powers from the People through the terms outlined in the Constitution. For Government not to discharge its duties in accordance with the terms of the Constitution constitutes a breach of its contract with the People.

If Government continues to function without regard to the Constitution, then the People are no longer its masters. Government becomes a power onto itself, and that sets a very dangerous precedent.

Legislators always talk about protecting the integrity of one of our most important institutions in our system of checks and balances. But when they had that very chance to stand up to do so, they decided it was best to remain seated.

Thursday, August 06, 2009

Drawing the Line

Talifaitasi W. Satele

The Private Sector and the ASG may have a nice, cozy relationship going on with its partnership together on the minimum wage petition, but that will soon come to an end.

For one, Congress will never delay the next increase in the minimum wage law lest they be made out to be a bunch of hypocrites by Republicans and liberals alike in the national media.

Two, the devastating effects of an increase in labor costs based on nothing other than Congress’ preconceived notions of social justice will force the ASG to choose between either upsetting its own work force (for cutting personnel costs) or its new found friend (for raising taxes on them to pay for its personnel costs).

As California and many other states have figured out the hard way, government is no creator of wealth. If government did create wealth, it could tax itself on the way to a balanced budget!

But the truth of the matter is that it is the Private Sector that creates wealth and the new revenues governments have had the pleasure of redistributing. So what many states have had to decide during this recession is either to raise taxes, cut spending or both.

Right now, the ASG is positioning itself to raise taxes with its un-prioritized spending. $200K for a Heritage week in Hawaii and trips to Washington D.C. to hand deliver the minimum wage petition do not put the ASG in a fiscally responsible position at a time when COS departure will mean a substantial loss amount of taxes to fund the government. And the Private Sector has said virtually nothing in the way of constructive criticism of the government’s reckless spending habits.

If private citizens don’t draw the line somewhere sometime soon, it will be that much more difficult to complain when the ASG comes knocking on the door after running up the tab.

Tuesday, July 21, 2009

Real Advocates of the Poor

Talifaitasi W. Satele

I could understand Common Cause’s position in support of the minimum wage law, if it were not causing jobs to disappear. Downsizing (in terms of personnel and benefits) actually started soon after the federal government forced this law upon us and well before the recession began to take its hold over the global economy. To say this law is not a significant reason for the COS’ departure is either dishonest and/or ignorant of everything that has been happening so far.

And clearly the canneries were the targets of the minimum wage law. But now with one to close in September and the other with one foot out the door, it would be those businesses still remaining that will have to comply with this law. And does anyone really expect these small businesses, these mom and pop stores, to pay the minimum wage, especially after the canneries’ departure?

Thousands of our low wage workers may be “aliens”, but you won’t know how good you had it until they’re gone. People complain about foreigners sucking up all of our precious limited resources, taking up all the jobs, owning all the businesses and crowding our schools and dysfunctional hospital, but wait until the streets are empty and life on Tutuila starts to look and feel like it is in Manu’a.

And while Tutuila starts to become an ever increasingly isolated island, watch the cost of living go up, not down. I have an uncle who travels to American Samoa every now and then, and he talks about the horrors of the rental rates for cars back home. Of course, it’s because he’s comparing them to rental rates here in Hawaii, and I have to remind him that car rental shops are dime a dozen over here.

If he thinks car rental rates back home are bad now, wait until after September.

It used to be that supporting the minimum wage law meant supporting the poor and the least fortunate amongst us. With the way things are going now, that is clearly no longer the case.

Tuesday, July 14, 2009

Slave Wages?

Talifaitasi W. Satele

To compare people who work at low wages to slaves does a great disservice to those who actually live or have lived in real slavery.

A real slave doesn’t get paid anything; he or she is forcibly taken against their own will, beaten and threaten with death if they don’t do as they’re told. Slavery is a real, sad and unfortunate crime committed against individuals to this very day, and no one should make a joke of the term by using it to describe what people working at the canneries are going through.

If anyone is close to being slaves around here, they are businesses. They are being forced to pay wages on a notion other than profit-maximization. That notion is simply the law. And in what ways are businesses compensated by the government for making these payments? None. Right now, businesses are paying for a government welfare program without even a word of thanks!

Slavery is a condition where one is subjected to another. Offering low wages to someone to perform a job doesn’t fall into that category. Wages, high or low, are offered to free men not slaves.