Sunday, November 26, 2006


Economist James M. Buchanan won the Nobel Prize for his research debunking the myth that government acts as some disinterested, unbiased and selfless entity that only functions in the best interest of the people. He demonstrated that government entities strive to maximize their job security as much as businesses do. But because the government operates under different incentives, its efforts do more to harm the economy than to serve the very people it claims to be helping.

If a government agency exists to serve some purpose that supposedly the market cannot handle, then it's obviously in the best interest of the government entity to maintain the status quo lest they lose their jobs. For if the market can fully supply a certain service (oh let's say, telecommunication), then there would be no need for the government department to exist and no need for the taxes to fund it. Taxes that fund the department would then (hopefully) go back to We, the People, who pay them.

We could look at ASTCA and say that the agency has valid reasons for not allowing Blue Sky to compete in the recent procurement process. Equipment requirements and FCC mandates are legitimate concerns. If these reasons hold any water, then the CPO as a 3rd party would come to the same conclusions. But because it's in the ASTCA's best interest to maximize their job security, allowing the ASTCA to possess sole discretion over taxpayer dollars only breeds suspicion. It's like giving McDonald's the right to bid out our tax money over other competitors like Krystal Burgers and saying that no bias exists. We're not stupid.

Another example of job security maximization is the DBAS. Wal-Mart is trying to enter the loan business much to the objection of banks and other competitors. "Unfair competition," say the objectors. "Everyday low prices," says Wal-Mart. Who will Togiola and Moliga support? Ahhhh, the side with the most votes of course! But for Utu Abe Malae, low interest rates are for a "social and economic mission." So if Wal-Mart comes to American Samoa and beats DBAS interest rates, will the bank president do the right thing and voluntarily dismantle his government agency to save us taxpayers some money? I doubt it. Job security. We'll see negative interest rates!

Government is often more self-serving than businesses because government can tax, tax and tax. Businesses, on the other hand, don't have that power and thus have to cooperate with and serve their consumers in order to maximize their profits and their job security at the same time.


At 11:34 AM , Blogger Stuart K. Hayashi said...

Hey Tallyho!

This excellent commentary is fewer than 500 words long, which makes it acceptable material for the UH newspaper.

If you send this to the UH paper as a letter to the editor, it will be printed; one need not be a student for his letter to be published.

And your letter would be more educational than much of what many statism-biased professors espouse in class.


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