Tuesday, May 30, 2006

Look to the Circumstances not just the Problem

High airfares and poor service are common traits of a public monopoly not a private monopoly. There is a difference between the two. A private monopoly (e.g. Microsoft) becomes the dominant firm by either providing the lowest price possible, the best service possible or both. A public monopoly is a result of government regulations and laws that prohibit competition in one fashion or another leaving one firm in the marketplace.

What we have with Hawaiian airlines is a public monopoly made possible by the Jones Act and other US cabotage laws. These protectionist laws prohibit foreign carriers from servicing the Honolulu Pago Pago route because spoiled American airline companies do not want the extra competition anywhere within the US.

If the governor’s claim that the Pago route is a “cash cow” is correct, where are all the investors lining up to get in on this money-making venture? Why have we only seen competitors leave our market (even with subsidies) instead of making the kind of money HAL is now rolling in?

I guess a low seat occupancy does matter. A lot. Yet there are investors out there who think they can do what Hawaiian can’t. But they’re foreigners. Those scheming Asian folks who conspire to take over the world by lowering prices or providing better services to Samoans. How dare they!?!

It goes to show that imports are a good thing because they save consumers money for other things. So we need to import more flights into our territory in an effort to increase supply to lower prices. Removing the obstacles that hinder investors from competing with Hawaiian for any profits made on the Pago route is where the ASG should focus its time and energy.

In the meantime, Governor Togiola’s class action lawsuit would be harmful and unfair. If HAL leaves AS, will Togiola’s public-private charter (which he, a family member or a friend may likely be a board member) come in time to save the day? Will the mainland American taxpayer dole out money to cover the charter’s costs if it can not replicate HAL’s performance record? If this class action lawsuit was fair, why can’t taxpayers sue the governor for the exorbitant price we pay to run a relatively small local government and for its inability to account for all of our hard-earned money? If government were held to same accounting standards as HAL and the powers of its stockholders, many officials would have been sentenced to life in prison or ousted out of office a long time ago.

Monday, May 29, 2006

What We Owe Our Soldiers

Alex Epstein

Every Memorial Day, we pay tribute to the American men and women who have died in combat. With speeches and solemn ceremonies, we recognize their courage and valor. But one fact goes unacknowledged in our Memorial Day tributes: all too many of our soldiers have died unnecessarily -- because they were sent to fight for a purpose other than America's freedom.

The proper purpose of a government is to protect its citizens' lives and freedom against the initiation of force by criminals at home and aggressors abroad. The American government has a sacred responsibility to recognize the individual value of every one of its citizens' lives, and thus to do everything possible to protect the rights of each to life, liberty, property, and the pursuit of happiness. This absolutely includes our soldiers.

Soldiers are not sacrificial objects; they are full-fledged Americans with the same moral right as the rest of us to the pursuit of their own goals, their own dreams, their own happiness. Rational soldiers enjoy much of the work of military service, take pride in their ability to do it superlatively, and gain profound satisfaction in protecting the freedom of every American, including their own freedom.

Soldiers know that in entering the military, they are risking their lives in the event of war. But this risk is not, as it is often described, a "sacrifice" for a "higher cause." When there is a true threat to America, it is a threat to all of our lives and loved ones, soldiers included. Many become soldiers for precisely this reason; it was, for instance, the realization of the threat of Islamic terrorism after September 11 -- when 3,000 innocent Americans were slaughtered in cold blood on a random Tuesday morning -- that prompted so many to join the military.

For an American soldier, to fight for freedom is not to fight for a "higher cause," separate from or superior to his own life -- it is to fight for his own life and happiness. He is willing to risk his life in time of war because he is unwilling to live as anything other than a free man. He does not want or expect to die, but he would rather die than live in slavery or perpetual fear. His attitude is epitomized by the words of John Stark, New Hampshire's most famous soldier in the Revolutionary War: "Live free or die."

What we owe these men who fight so bravely for their and our freedom is to send them to war only when that freedom is truly threatened, and to make every effort to protect their lives during war -- by providing them with the most advantageous weapons, training, strategy, and tactics possible.

Shamefully, America has repeatedly failed to meet this obligation. It has repeatedly placed soldiers in harm's way when no threat to America existed -- e.g., to quell tribal conflicts in Somalia, Bosnia, and Kosovo. America entered World War I, in which 115,000 soldiers died, with no clear self-defense purpose but rather on the vague, self-sacrificial grounds that "The world must be made safe for democracy." America's involvement in Vietnam, in which 56,000 Americans died in a fiasco that American officials openly declared a "no-win" war, was justified primarily in the name of service to the South Vietnamese. And the current war in Iraq -- which could have had a valid purpose as a first step in ousting the terrorist-sponsoring, anti-American regimes of the Middle East -- is responsible for thousands of unnecessary American deaths in pursuit of the sacrificial goal of "civilizing" Iraq by enabling Iraqis to select any government they wish, no matter how anti-American.

In addition to being sent on ill-conceived, "humanitarian" missions, our soldiers have been compromised with crippling rules of engagement that place the lives of civilians in enemy territory above their own. In Afghanistan we refused to bomb many top leaders out of their hideouts for fear of civilian casualties; these men continue to kill American soldiers. In Iraq, our hamstrung soldiers are not allowed to smash a militarily puny insurgency -- and instead must suffer an endless series of deaths by an undefeated enemy.

To send soldiers into war without a clear self-defense purpose, and without providing them every possible protection, is a betrayal of their valor and a violation of their rights.

This Memorial Day, we must call for a stop to the sacrifice of our soldiers and condemn all those who demand it. It is only by doing so that we can truly honor not only our dead, but also our living: American soldiers who have the courage to defend their freedom and ours.

Alex Epstein is a junior fellow at the Ayn Rand Institute in Irvine, CA. The Institute promotes Objectivism, the philosophy of Ayn Rand -- author of Atlas Shrugged and The Fountainhead.

Copyright © 2006 Ayn Rand Institute. All rights reserved.

This release is copyrighted by the Ayn Rand Institute, and cannot be reprinted without permission except for non-commercial, self-study or educational purposes. We encourage you to forward this release to friends, family, associates or interested parties who would want to receive it for these purposes only. Any reproduction of this release must contain the above copyright notice. Those interested in reprinting or redistributing this release for any other purposes should contact media@aynrand.org . This release may not be forwarded to media for publication.

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.

Saturday, May 13, 2006

American Samoa Can Be Good For Business

I applaud Governor Togiola’s efforts to 1) make up for our government’s grave mistake in turning down fibre optic cable and 2) invite businesspeople to help diversify our economy. What can the rest of us do to help the ASG achieve a bright economic future for American Samoa?

1. Don’t listen to those who say businesses will take advantage our low minimum wage laws. A low paying job is better than no job at all. If someone doesn’t like the pay then he/she should find something else to do or start their own business.

2. Don’t treat businesses like an ATM. They’re here to provide a service that we want or need for a price. They’re not here to pay for our education, a veterans’ memorial, a new KVZK-TV antenna or medical care. We shouldn’t scare businesses away with redistributive taxes.

3. Respect businesses' property rights. Potential business investors look at our price-gouging law and see that in a time of emergency, he/she can expect to go court over prices on the goods he/she plans to bring here. High prices reflect supply shortages not greed, and we shouldn’t punish businesses for that.

4. Improve our education system by opening it up to competition. Businesses need employees with the basic tools. However, our schools continue to fail to teach our children Samoan, English and Math. A voucher system that attaches public funds to students will force our schools (both public and private) to compete with each other for those funds by catering to students and their parents. Students and parents want quality education that delivers on the results.

5. Encourage our politicians to treat business like the real people they are. Our officials have been too easy with rhetoric that blames businesses for everything.

Whether it’s low prices, high prices, the same prices, fattening our people to death, a conspiracy to take over our lands or poison our bottled water supply, businesses are the scapegoats. Yet without the gas station owner, there would be no high priced gas to buy. Without the tuna canneries, there would be no low paying jobs to work. Without a McDonalds, there would be no Big Mac to enjoy with the family.

Once we change our philosophy about business and make it a part of our lives and culture, only then would American Samoa be a good place to do business.

Friday, May 12, 2006

Price Controls in One Lesson

This website's proprietor, Tali Satele, has written about accusations of "price gouging" and demands for price controls over here.

But I think this cartoon from John Cox & Allen Forum (from here) also says it very well.

And John Stossel also explains it here.

On the bottom of this post are rules that Cox & Forkum have issued for bloggers who wish to re-post their cartoons:

We presently allow blogs to post Cox & Forkum cartoons appearing on this site at no charge. We ask that bloggers host the cartoon image file on their own server (so as not to consume our bandwidth) and that a link to the main Cox & Forkum Web page or the cartoon's permalink accompany the cartoon (a "permalink" is the URL address for a single cartoon).

Saturday, May 06, 2006

Constitutional Amendments for Greater Economic Freedom

Stuart K. Hayashi

I first realized the need for amendments to the United States Constitution ensuring greater economic freedom upon reading such a proposal in Free to Choose: A Personal Statement by Nobel Prize-winning economist Milton Friedman and his wife Rose.

And the Friedmans were not the first to point this out. The second-to-last page of Ayn Rand's Atlas Shrugged -- SPOILER ALERT!! -- reads:

. . .

Uhhh, highlight the two "invisible" paragraphs below to read them:

The rectangle of light in the acres of a farm was the window of the library of Judge Narragansett. He sat at a table, and the light of his lamp fell on the copy of an ancient document. He had marked and crossed out the contradictions in its statements that had once been the cause of its destruction. He was now adding a new clause to its pages: "Congress shall make no law abridging the freedom of production and trade..."
Incidentally, that is the only time the book uses term "Congress" instead of "National Legislature."


Ah, if only we got to read the rest of that clause, as a real-life constitutional amendment needs more elaboration than the sentence fragment given.

Fortunately, we have something to work with because of the final chapter of the Friedmans' Free to Choose. They say there should be a Constitutional Amendment saying:

The right of the people to buy and sell legitimate goods and services at mutually acceptable terms shall not be infringed by Congress or any of the States.

I would accept that but the Friedmans' wording is still not efficient. First, the Fifth Amendment has proven inadequate, particularly as far as these parts are concerned:

No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The Fifth Amendment should be stricken out and replaced with a stronger amendment, like this:

No person shall be held to answer for any crime by any government body in the United States of America -- not on the federal, state, or municipal level -- nor by the government of any territory under U.S. protection, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger. Such an exception during wartime, however, can only be made for persons who do not have U.S. citizenship. Nor shall any person -- U.S. citizen or otherwise -- be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself.

No government body within jurisdiction of the United States of America -- at the federal, state, or municipal level -- nor any territory under U.S. protection, may perform any action upon any private property of any legally competent adult U.S. citizen without that U.S. citizen's permission, unless the executive branch in the appropriate jurisdiction finds probable cause to suspect that the said U.S. citizen is guilty of committing spoliation upon a nonconsenting human party, regardless of whether any alleged victim holds U.S. citizenship or not.

"Spoliation" is henceforth defined in this document as the act of physical force against the private property or body of a nonconsenting person, in such forms as physical bodily harm, homicide, contract breach, harassment, sexual assault, property damage (whether intentional or negligent), intellectual property infringement, fraud, or poisoning. This Constituational protection is guaranteed to U.S. citizens during even a state of war.

Note that the new language eradicates all eminent domain.

And as for the Friedmans' suggested amendment about the right to contract, I would re-word it as:

No government body within the jurisdiction of the United States of America -- at the federal, state, or municipal level -- nor any territory under U.S. protection, may infringe upon the right of contractually competent adults to buy or sell legitimate goods or services without the executive branch first finding probable cause that the said transaction has committed nonconsensual spoliation upon the person or property of a human "third party" that has not willingly chosen to participate in the aforementioned transaction. Such constitutional protections still apply to U.S. citizens during wartime.

The Friedmans also suggested:

Congress shall make no laws abridging the freedom of sellers of goods or labor to price their products or services.

I suggest that the amendment be rephrased:

No government body within the jurisdiction of the United States of America -- at the federal, state, or municipal level -- nor any territory under U.S. protection, may exercise governmental force to halt or influence the right of legally competent private sellers of legitimate goods, legitimate services, or legitmate labor services to set the prices, rates, or premiums -- or any other charges for their products or services -- as they see fit. No government body within U.S. jurisdiction at any level -- the federal, state, or municipal -- may threaten legal action upon any party to influence the negotiations between legally competent buyer and legally competent seller of the pricing, rate-setting, wage-setting, or other forms of compsensating-setting, for legitimate goods, services, and labor services. This rule applies even in wartime.

Such amendments are not enough to create perfect freedom in America, but this is a start.

Wednesday, May 03, 2006

Freedom vs. Unlimited Majority Rule

Peter Schwartz

America's foreign policy has led to a bizarre contradiction. President Bush claims to be pursuing freedom in the world, so that Americans will be safer. Yet this campaign's results -- a more zealous proponent of terrorism in the Palestinian Authority, and the prospect of theocracy in Iraq -- are posing even greater threats to us.

The cause of this failure is Mr. Bush's hopeless view that tyranny is reversed by the holding of elections -- a view stemming from the widespread confusion between freedom and democracy.

Ask a typical American if there should be limits on what government may do, and he would answer: yes. He understands that each of us has rights which no law- regardless of how much public support it happens to attract -- is entitled to breach. An advocate of democracy, however, would answer: no.

The essence of democracy is unlimited majority rule. It is the notion that the government should not be constrained, as long as its behavior is sanctioned by majority vote. It is the notion that the function of government is to implement the "will of the people." It is the notion we are espousing when we tell the Iraqis, the Palestinians and the Afghanis that the legitimacy of their new governments rests essentially on their being democratically approved.

And it is the notion that was repudiated by the founding of the United States.

America's defining characteristic is freedom. Freedom exists when there are limitations on government, limitations imposed by the principle of individual rights. America was established as a republic, under which government is restricted to protecting our inalienable rights; this should not be called "democracy." Thus, you are free to criticize your neighbors, your society, your government--no matter how many people wish to pass a law censoring you. But if "popular will" is the standard, then the individual has no rights -- only temporary privileges, granted or withdrawn according to the mass sentiment of the moment. The Founders understood that the tyranny of the majority could be just as evil as the tyranny of an absolute monarch.

Yes, we have the ability to vote, but that is not the yardstick by which freedom is measured. After all, even dictatorships hold official elections. It is only the context of liberty -- in which individual rights may not be voted out of existence --that justifies, and gives meaning to, the ballot box. In a genuinely free country, voting pertains only to the particular means of safeguarding individual rights. There is no moral "right" to vote to destroy rights.

Unfortunately, like Mr. Bush, most Americans use the antithetical concepts of "freedom" and "democracy" interchangeably. Sometimes our government upholds the primacy of individual rights and regards one's life, liberty and property as inviolable. Many other times it negates rights by upholding the primacy of the majority's wishes -- from confiscating an individual's property because the majority wants it for "public use," to preventing a terminally ill individual from gaining assistance in ending his life because a majority finds suicide unpalatable.

Today, our foreign policy upholds this latter position. We declare that our overriding goal in the Mideast is that people vote -- regardless of whether they care about freedom. But then, if a Shiite, pro-Iranian majority imposes its theology on Iraq -- or if Palestinian suicide-bombers execute their popular mandate by blowing up schoolchildren--on what basis can we object, since democracy is being faithfully served? As a spokesman for Hamas, following its electoral victory, correctly noted: "I thank the United States that they have given us this weapon of democracy. . . . It's not possible for the U.S. . . . to turn its back on an elected democracy." The Palestinians abhor freedom -- but have adopted democratic voting.

The Iraqis may reject freedom, in which case military force alone -- as dismally inadequate as our efforts in that realm have been so far -- will have to ensure our safety against any threats from them. But if we are going to try to replace tyranny with freedom there, we must at least demonstrate what freedom is. We should have been spreading the ideas and institutions of a free society, before allowing elections even to be considered. For example, we should have written the new constitution, as we did in post-WWII Japan. Instead, we deferred to the "will of the people" -- people who do not understand individual rights -- and endorsed a despotic constitution, which rejects intellectual freedom in favor of enforced obedience to the Koran, and which rejects economic freedom and private property in favor of "collective ownership." The consequence: looming neo-tyranny in Iraq.

We need to stop confusing democracy with freedom. Morally supporting freedom is always in our interests. But supporting unlimited majority rule is always destructive -- to us, and to all who value the rights of the individual.

Peter Schwartz is a Distinguished Fellow at the Ayn Rand Institute (www.aynrand.org) in Irvine, California. The Institute promotes Objectivism, the philosophy of Ayn Rand -- author of Atlas Shrugged and The Fountainhead.

Copyright © 2006 Ayn Rand Institute. All rights reserved.

This release is copyrighted by the Ayn Rand Institute, and cannot be reprinted without permission except for non-commercial, self-study or educational purposes. We encourage you to forward this release to friends, family, associates or interested parties who would want to receive it for these purposes only. Any reproduction of this release must contain the above copyright notice. Those interested in reprinting or redistributing this release for any other purposes should contact
media@aynrand.org. This release may not be forwarded to media for publication.