Wednesday, July 05, 2006

ASPA as a Mutual Company

The last thing anyone should want is to have American Samoa Power Authority (ASPA) operate where it just barely breaks even (thereby being “devoid of profit motives”). The closer ASPA is to breaking even, the closer it is to suffering losses instead of making profits. When that happens, Senator Lolo Moliga will be complaining about the evils of the profit motive in the dark.

Again, comparing energy prices (and airline tickets) in American Samoa to mainland prices is comparing apples to oranges. The two markets differ in the number of customers they serve and the amount of capital used to serve those customers. Electric Utilities in the mainland have millions of consumers for whom more generators are justified for producing millions of megawatts of electricity. With that level of production, is it no wonder why they can charge 8.7 cents per kilowatt-hour compared to American Samoa’s 26 cents per kilowatt-hour?

The question we should ask when we see large profits is what the ASG can do to allow those profits to attract competitors. What hurdles at all levels of government stand in the way of competition and investment?

Think if ASPA were a mutual company, its customers would be the owners and the beneficiaries of any profits the entity makes. They would vote for the board members and have influence as to what the company’s profits can or cannot subsidize. Customers, as the new owners, would also take an interest in the now fully autonomous entity’s expenses (like the size of their workforce), because unneeded costs would cut into their dividend payments.

There are alternatives beyond the horizons of central planning.

1 Comments:

At 4:33 AM , Blogger Stuart K. Hayashi said...

Wow, Mr. Taliwood Movie Star,

These letters of yours to Samoa News give me goosebumps, because they all sound like the events played out in the tale of Atlas Shrugged. The more I read your letters, the more I have to conclude that that book is not completely fiction, but a prophecy of what would eventually happen in Tali Satele's home territory at the start of the millennium.

Tali, you write that the "last thing anyone should want is to have American Samoa Power Authority (ASPA) operate where it just barely breaks even," since, when it finally runs out of money and can no longer pay its expenses, "Senator Lolo Moliga will be complaining about the evils of the profit motive in the dark."

You are talking about what happens in Atlas Shrugged:

"The plane was above the peaks of the skyscrapers when suddenly, with the abruptness of a shudder, as if the ground had parted to engulf it, the city disappeared from the face of the earth. It took them a moment to realize that the panic had reached the power stations -- and the lights of New York had gone out."

Atlas Shrugged sounds increasingly like a Nostradamus-styled prediction of what further awaits American Samoa if its leaders continue down the dark path of government supremacism.

The only differences are that Ayn Rand's writing is much clearer than Nostradamus's -- her predictions are written in plain English so you know exactly what she's talking about -- and that what she used to make her predictions was not psychic power, but an understanding of economics.

Tali, it's like you're channeling all of Francisco d'Anconia's warnings about government supremacism from that (non)fiction book, which everybody tells me is more like an exciting movie than a novel.

How can we break this curse? I think the first step to breaking this curse would probably be your reading this book and seeing how eerily it parallels the phenomena described in your blog posts.

We hear about forest spirits and ocean spirits in Oceania. Well, it looks like the economics spirits -- the aumakua of the market -- are urging me to inform you about how much of American Samoa's future is catalogued in this book. Saving America Samoa requires that people learn the lessons of Atlas Shrugged.

 

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