Tuesday, April 26, 2005

Fallacies of the Bottle Bill

I would like to address the fallacies in Christopher Hawkins’ letter to editor (dated 4/25/2005) one at a time.

The first flaw in his argument is that this recycling boondoggle can provide “for a cleaner environment at no cost to consumers.” Mr. Hawkins says, “Five cents goes in from the consumer, five cents go back to them.” I really wish things were that easy. However, in order for you to get your 5 cents back, you have to spend time and money to clean, store and transport your redeemable bottles to recycling centers. The costs of doing so will eat into your refund. Thus, there is no even exchange of the 5 cents between the government and the consumer here.

Second, Mr. Hawkins implies that 30 cents for a six-pack should not be a big deal for all those with “$40,000 trucks and SUVs.” How about the little guy who doesn’t own a $40,000 truck or SUV? I am sure that he will cringe at the sight of 30 cents tacked on to the end of his grocery receipt. Here in Hawaii, I do not have the space in my small apartment to collect hundreds of cans, nor do I have a truck to transport them or the time between work and school to clean these containers, store them and then transport them. I am not lazy nor do I litter. Why should I pay for a crime that I did not commit? I am also sure that the cans I properly dispose of await someone with the resources to do what I cannot. This is a transfer of wealth.

At the same time, who is the government to decide how much I should cherish what I earned with my own blood, sweat and tears? If 30 cents is too little for the common man, then why don’t we just make the redeemable fee 31, 32, 40, 75 or a million cents? How do we measure when enough is enough? Am I being selfish for wanting to keep my own money for my family and myself, or is the government being selfish for wanting to take my money from me? Here in Hawaii, the program collects $2.5 million a month. In the first two months, it only paid out $300,000 in refunds in each month. That is $4.4 million left in government coffers. With that kind of money, I foresee more increases to Fono allowances. Politicians will benefit regardless if they intend to or not.

Third, the bottle bill is not ingrained in the mainland. It only exists in 11 states while the other 39 get along fine with private recycling centers. There is also a movement here in Hawaii to repeal the bottle bill. This is not without merit. The State of Hawaii failed to reimburse recycling companies promptly for redeemed containers, which then led to the closure of some redemption centers. Consumers also complained about long lines and inconvenient hours at the centers. Can we really expect the ASG to manage this system any better than the State of Hawaii? Do the people of American Samoa deserve to pay out of their own pockets to prepare containers and wait in long lines in order to get back what was rightfully theirs to begin with?

Fourth, privatization really does address the issue here, but Mr. Hawkins is right to say that it is not easy. Let us take two parks, one private and the other public. Throw trash in both parks on the same day. Now let us make a bet on which park will not have the same trash in it over the next few days. My money is on the park that depends on a clean environment to entice consumers. On the other hand, your public park manager gets a guaranteed paycheck, and that is cause of most of our problems.

I thank Christopher Hawkins and others for dedicating their time to the litter problem. However, their actions are not representative of government in American Samoa or around the world. I am not talking about government conspiracy here; I am talking about the nature of government. When your next paycheck does not rely on consumer satisfaction, society ends up with dismal results. Look at the LBJ, our schools, our parks, the Rainmaker, the golf course, and the litter on the streets, and tell me that you do not see the common thread that runs through all of these problems. The status quo is a no go, and privatization is a legitimate answer.

Lastly yet importantly, I want to remind people that when people are caught littering red handed, the party they owe compensation to should be the victim and not the government. This type of law enforcement on top of privatization will promote a cleaner environment at no cost to the consumer.

Wednesday, April 20, 2005

Taxes are Ineffective in Problem Solving

I like to thank Susan for her letter responding to my plea to people of American Samoa to not support the Litter Control Bill in Samoa News. I agree with her on the intent of the bill, but the means in which the government seeks to meet this end is unacceptable.

First off, keeping the environment clean is a noble goal. So is keeping people from becoming overweight. So does that mean we should increase taxes on foods that contain too much fat? Currently, this is how the government functions. If it sees a problem, it taxes it to slow down the demand. The Litter Control Bill will also slow consumer desire to purchase these products somewhat depending on the elasticity of demand.

If demand does go down then the loser in this game would be G.H.C Reid, importers and everyone working for these companies. Someone may lose her or his job. Five cents is not a big deal so demand for these products may remain unchanged. However, what this does is send a message to politicians that they can get away with increasing the tax or redeemable fees. Judging from history, the ASG will not stop at demanding 5 cents to promote this recycling boondoggle.

It draws into question why government is keen on intervening into our problems. I think that the idea that it will get more of our money out the ordeal motivates it more than anything else does. The ASG does not want to fix the problem; it just wants to make money out of the problem. They taxed beer and cigarettes years ago and then called it the day. Alcohol abuse at all levels of society is still a problem today because taxation does not address the issue.

Can we address the litter problem without trying to force people to turn in their containers? The questions we must first ask are why and where is litter a problem. Litter is not likely a problem on private property. People keep their lands beautiful when it is theirs to enjoy and productive when they make money out of it. This says a lot about public lands. What belongs to no one or everyone tends to fall into disrepair. The ASG should auction off public parks off to a company willing to invest in them and charge user fees. Lands surrounding roads should also meet some form of privatization.

I also disdain the implication that the Litter Control Bill will encourage the poor to become entrepreneurs. My idea of the poor, from what I saw growing up in Tutuila, is a family living in a small one bedroom broken down house on less than half of acre of land. People like this do not have the space, labor, time, transportation or the money to make a business out of this farce. However, they will still have to hand out 5 cents (possibly even more) extra for a container of their choice. Meanwhile, the well-to-do will collect the bottles for them and laugh all the way to the bank. The Litter Control Bill and its sister programs throughout the United States do nothing but transfer wealth from the poor to the rich. God did not intend this as an avenue for us.

Privatizing is the way to go to addressing the issue here. People take care of what is theirs to keep. At the same time, if Party A litters on Party B’s property, the courts should force Party A to compensate Party B, not the government, for the crime. Currently, if you are caught littering, you pay a fine to the ASG, which does what it wants with the money. If a litterbug were caught and forced to compensate the victims of their litter personally then that will be much more effective in creating responsibility and concern for the environment.

Tuesday, April 12, 2005

Recycling/Litter Control Bill is a Thief in Disguise

Hawaii has implemented similar legislation to the one Togiola is asking the people of American Samoa to support. Over here, they call it “the bottle bill.” The government program has been in operation here since the beginning of the year, and it has been stealing money right out of our pockets ever since.

First off, the bureaucracy needed to operate this program needs money in order to run. So like Hawaii, Togiola will need to charge something on top of his 5 cent redeemable fee. Here in Hawaii, the government charges a cent making the total tax 6 cents per bottle. So even if you redeem all of your bottles, you really only get 4 cents after all is said and done.

Second, Hawaii charges the consumer its sales tax after it adds on the redeemable fee. So like Hawaii, Togiola’s program will calculate its sales tax not on a $1 worth of soda, but rather $1.05 ($1.06 or higher if it charges a fee to pay for the bureaucracy). Therefore, your sales tax will be higher than it would be without the redeemable fee. That will further eat into your refund.

Third, not everyone has the resources (time, money, transportation or space) to redeem every single bottle they buy. Only those with the resources can fully participate. These people will also have the incentive to obtain the bottles by shifting through other peoples’ garbage. What this amounts to is a transfer of wealth from the resource-less to the resourceful.

The one to really gain from this is the government itself. Togiola knows full well that not everyone will redeem their bottles. Here in Hawaii, the program collects $2.5 million dollars a month. In the first two months, it only paid out $300,000 in refunds in each month. What was not claimed was kept by the government for the government.

Do not support the Recycling/Litter Control Bill. It is a thief in disguise.

Monday, April 11, 2005

Hard Times

I’ve experienced one of the hardest times of my life a few days ago when I was talking to my brother about less employment opportunities in American Samoa due to increasing foreign competition. He is finding that it is becoming harder to find jobs in the restaurant industry seeing that immigrants are taking more of them up and foreign establishments are becoming increasingly competitive. It was hard for me to tell him that his pain and his struggle are necessary for him and our island country to become better.

I tried to use an analogy to explain to him why I believe that statement to be the truth. In American Samoa, not too many people know how to fish anymore or they don’t depend on fishing as much as in the past. Fishing was considered an expertise, and families and villages had tufuga in this capacity as well. Though our tufuga were not employed in the modern sense of the term, their value and worth to the community were continually chipped away by local grocery stores and imports. Some abandoned the practice all together.

As sad as this may seem, the implications of this so-called tragedy have improved our lives over the years. Even though families could have relied on members to provide fish free, they continued to find it more convenient to buy fish at retail stores. We rather give up money to buy fish than go fish on our own. We save our families time to do more important, more productive things. If we had passed laws banning imports or the sale of fish at stores, then obviously we would have more fishermen today and fewer teachers, cops, governors and the like.

It’s hard for people to do this, but we have to apply this logic to every job out there. If imports or foreigners find a way to provide products and services more cheaply, effectively and efficiently, then this saves Samoans time and money to improve in other areas. This is where protectionists come in and say, “We don’t have no resources or any more room to advance.” I’m glad these protectionists where not around when Thomas Edison invented the light bulb. I’m glad these protectionists where not around when someone invented silicon out of useless sand. I’m glad these protectionists were not around to whisper their rhetoric into the ears of our many great achievers; we may have less of them today.

Politicians love to use slogans such as, “The sky’s the limit,” or, “You can achieve anything you put your mind to,” all the while paying lip service to those truths. I believe in my brother and my Samoan people to do better and become better, and that was the only thing that was not hard for me to tell him.

Friday, April 08, 2005

A Hero in the ASG

The people of American Samoa should praise Senator Fai’ivae Galea’i for his brave and straightforward letter to the Editor in the Samoa News dated 4/8/2005. I wished I had tried a similar approach in explaining how the free market will not only solve, but also improve conditions at the LBJ. I hope – no, I pray that the senator and readers alike can imagine how the principles he explained can apply to other welfare functions like education.

Mr. Galea’i bases his proposal on the fact that there is no such thing as a free lunch. Governments around the world, to include the U.S., continually try to bend this law of nature, and they find out the hard way that this law simply cannot be broken. In the end, someone has to pay the piper; in the LBJ fiasco, the American taxpayer foots the bill. How long can we afford to rely on federal grants to rescue us from ourselves time and time again? You can read Dr. Harold Luntey’s letter to the Editor, dated 4/8/2005 as well, to get an idea.

Medical self-reliance will require more than just contracting our healthcare out to “a big professional management company” like the senator suggests. It will require a complete hands-off policy by the ASG of the whole industry. The ASG should not subsidize the management company, protect it from competition, or micromanage it with legislation. The only role the ASG should play is forcing responsible healthcare providers to compensate its victims of malpractice based on reasonable evidence if such incidents occur. The courts alone should have sufficient powers to carry out this role.

Medical self-reliance will mean that each American Samoan citizen will be liable for the costs of healthcare provided for her or his own person. And at first, that price is going to be high during reform. However, if the ASG keeps its hands off in the manner I described above then prices over time will become affordable for most people. The minority who cannot afford healthcare, the reason why welfare is created in the first place, will be small in number over the long run. That is because when there is no welfare people are empowered much in same way Senator Galea’i describes in his letter. Please read his letter. People are also forced to realize that help is not a right, but a gift and privilege. Charity will make that even clearer, and that will motivate people to find a way to pay their share of the load.

Reform of government in this manner will change it into a customer server. Instead of being served by someone who knows he or she will be paid, regardless if you are taken cared of properly or not, you will be served by someone who wants to help you because profit requires your satisfaction. Issues such as whether the public has enough resources will become irrelevant, because we will all know that what one person receives is what that one person has paid for.

When we privatize government functions, miracles happen. Before 1984, New Zealand was just like us. Their government subsidized everything from mass transportation (e.g. trains) to the media to farmers. Then they went bankrupt and turned to the IMF and Australia for monetary assistance much in the same way the ASG is now turning to the DOI. The loans did not help. They only deepened the problems. In 1984, the Labour Party swept into office on platform of real reform. They turned down further IMF assistance, cut the subsidies across the board, cut taxes and import tariffs and privatized national assets like their rail system. New Zealand came out of its financial pit and is now very prosperous today.

We may have a glimpse of such reform and prosperity with a hero like Senator Fai’ivae Galea’i in the ASG today.