Saturday, March 26, 2005

Corruption: A Mix of Greed and Force

Many people have expressed their concerns about corruption in the local government. Greed is usually suspect, but it is definitely not the culprit. Greed actually does society good. It’s what wakes us up in the morning to earn that paycheck. It’s what inspires us work late hours. The whole idea behind the invisible hand has been at work for over 200 years.

Greed is bad when individuals satisfy their desires by using force. The distinction made then is that greed is good until someone uses force to satisfy that greed. The following are some events that demonstrate how the ASG uses force to gain what it desires:

  • When the U.N. put American Samoa on the decolonization list, our leaders rushed to get us off that list. The ASG does not want to stop milking the American taxpayer. American taxpayers are forced to finance the ASG.
  • Our leaders tried to keep the tuna industry hostage in American Samoa with laws that limit its sources of supply (Country of Origin Labeling) and labor (AG Sialega’s anti-immigration agenda).
  • The customs agency gave itself a pat on the back last year for diligently pursuing collections on individuals and businesses.
  • The Treasury’s and the Development Bank’s lack of accountability led to theft. The same is true of other government programs and departments.

The ASG did pursue some of the right initiatives. Such leadership was likely influenced by other factors other than the pursuit of sound economic policy. It is not important though. The fact is that force on individuals is absent in the following:

  • The administration attempted to allow more foreigners to invest in the territory.
  • The ASG passed legislation allowing banks to charge higher interest rates though the ASG should remove the limits altogether.
  • The Tourism office attempted to allow taxis to charge higher fares. It is necessary to remove those limits along with limits on bus fares.

It is noticeable that the ASG does right by allowing individuals and businesses more freedom to satisfy their greed as long as individuals and businesses do not stomp on the freedoms and right of others. When the ASG consolidates power and responsibility, it only increases the probability of corruption.

Here is a recommendation for the ASG: completely privatize those things that the private sector can handle and then keep your hands off. Education and the LBJ hospital are two sectors being bogged down by bureaucracy; the ASG is now reaping what it has sown. For functions that pertain to the maintenance and operation of the government itself, the ASG needs to outsource as much as possible, strengthen its means of evaluating contractors’ work, and renegotiate contracts every 2-3 years.

Here is a suggestion for the people: get mad at poor government performance. There was an incident at Hawaiian Airlines last year when passengers were becoming impatient with a delay in the airline’s schedule. There was almost a riot. I don’t understand why people would act that way with a profit-seeking company but then suffer in silence with mediocre government; it is mind-boggling.

Our misconception about greed is the reason why we treat Hawaiian Airlines and other private companies with suspicion and contempt. The private sector has always provided the best possible services at the lowest prices possible. Can the ASG replace Hawaiian Airlines? The ASG cannot even secure flights between Manu’a and Tutuila, and that is only a tiny fraction of the distance between Tutuila and Hawaii. The indication then is that more government functions would benefit from a move to the private sector. That is because people can not rely on the short cut of force to fulfill what is in their self-interest – especially the ASG.

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