Sunday, May 21, 2006

Economic Happenings

Recently, Senate President Lolo Moliga has asked the governor to look into making some concessions for Hawaiian Airlines. HAL has asked for help with “high landing fee rates, excise taxes on fuel, and escalating operational costs due to overtime payments to Customs and Immigration officers.” However, concessions may be impossible without spending cuts. The ASG can find money to pay for HAL’s concessions by selling a government asset like the golf course, which would reduce spending and make the ASG some money.

Now the US Congress got into the McDonalds-Utulei debate showing us that politicians thousands of miles away in Washington D.C. want to dictate the use of our own lands. This debate is moving into the sovereignty realm, and it’s just sad that our representative to the kingdom of far, far away is more concerned about continued dependence on federal funds than initiatives to make us economically self-reliant.

Senator Tuaolo rightfully notes that a higher wage will entice more people to work for the canneries, but forgets or ignores that the American Samoan labor market is in competition with low-wage Asia and South America. With the expiration of the federal tax exemption on our exports, restrictive immigration laws further encourage the tuna industry’s departure. Our legislators should allow the sponsorship program/system to do its work and bring willing workers here. ASG immigration laws along with taxes and minimum wage laws diminish our competitiveness.

Many have bashed the higher LBJ fees, but let’s look at some of the benefits. As Senator Moliga has pointed out, many may choose to stay home instead of seeing the doctor. But that’s a good thing. Many may either ignore or treat minor ailments with over-the-counter medications. They may also just call the doctor instead of coming in for a costly visit. Many have the incentive to go through these cost-saving measures because of the higher fees, which will likely translate into higher quality of healthcare.

Last but not least, great job to Inter Island Airlines for two medical evacuations from Manu’a. The ASG should use the operating and maintenance funds it spends on the Sega’ula to handle emergencies through Inter Island instead. Inter Island probably does the job cheaper anyway. It just makes sense to sell the government airplane along with the golf course.

4 Comments:

At 9:29 PM , Blogger Stuart K. Hayashi said...

Wait a minute. Are you telling me that, in American Samoa, the government owns and controls golf courses?

Why, why, why? What does government ownership over a golf course have to do with criminal justice or national security?

Are golf courses not a perfect example of something that should be handled by the private sector under free enterprise?

 
At 8:51 AM , Blogger Talifaitasi Satele said...

It makes no sense that we allow the ASG to maintain anything other than the protection of our individual rights. A golf course covers land that people can use for homes and business. If the golf course doesn't generate profits greater than the next best alternative (opportunity cost), then all that land should be used to pursue the alternative instead (whether it be homes or other business activities). Same logic should apply to the government hotel and airplane.

 
At 4:13 AM , Blogger Stuart K. Hayashi said...

Yo Talirific!

You write, "If the golf course doesn't generate profits greater than the next best alternative (opportunity cost), then all that land should be used to pursue the alternative instead (whether it be homes or other business activities)."

What do you mean by that? Do you mean that, if the government agency did generate a profit, then it would be okay for the government to control this segment of land?

I believe that the most moral alternative would be for this land to be privatized even if the government-controlled golf course made profits. Maybe if this land were in private hands, it would generate bigger profits.

And what if the profitable government golf course were sold to a private buyer who ended up running losses? Would that then prove the government's superiority? I think not. At least the private owner wouldn't have to keep up the same pretense that the government does.

The government claims to manage this land for everyone. Yet, the fact remains that, because it's impossible for everyone to manage this land, not everyone will be pleased by what's done with it. Thus, government managers use "publicly-owned" land to please private interests.

When the land is private, at least we're all honest about private interests being served.

 
At 12:36 PM , Blogger Talifaitasi Satele said...

i don't mean to say that government ownership is justified by profits. though i do imply it. what i mean is that government will continue to own something even if it loses money from it because government can tax the rest of us to maintain the status quo. if you or i owned a money losing golf course, we would sell it once we couldn't cover fixed costs anymore. you or i can't tax anyone to cover the mistakes we make when we take the risk of investing in a golf course. so the problem with government owning something is that it doesn't have the incentive to make the most economical choice when it can make the rest of us pay for it. if government made profits from charging protection fees (considering that it allowed private firms to compete with it and that the government held the final authority over the protection of our individual rights) and it wants to use its profits to buy something like a golf course then that's fine. as long as it uses its profits and not our tax money to pursue its venture.

 

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