Sunday, November 26, 2006

PUBLIC CHOICE THEORY

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.

Thursday, November 16, 2006

NO PREFERENCES FOR LOCAL BUSINESSES

The HAL debacle demonstrates the utmost hypocrisy of the Togiola Administration and the Senate. While everyone and their uncle in the ASG were quick to condemn HAL for the consequences (high prices) of limiting competition (foreign airlines), our government wants to create the same devastating conditions for the rest of our economy. In the end, any preference regime that limits foreign competition or favors locals will only hurt consumers.

Isn't it the poor our politicians supposedly care about? Governor Togiola, Senator Moliga and many others wear statistics like the poverty level like a badge of honor when pushing their agendas of raising and creating new taxes, free medical care and price controls for HAL. But nothing, and I repeat nothing, lowers prices and raises the standards of living for the poor more than competition. So why shut the door or raise taxes on foreign competitors?

The argument goes that we should care for local businesspeople because they are Samoan. I grew up knowing some good Samoan people as well as some bad Samoan people, and I know I'm not the only person from American Samoa who's had this experience. How then is it justifiable to have some blanket preference system that limits us consumers from foreign competition just because local businesses are "Samoan"?

Race should never be the standard for any government in making preferences. It's not only morally wrong, it's also discrimination and should be illegal. The best preference in the free market is whoever can provide the lowest price possible, the best service possible or both.

I wonder if Wal-Mart wanted to open up shop in our territory what our self-righteous politicians would say and do then. And I wonder when these politicians who care so much about the poor will start their own charities and foundations or something.

Tom Smith and His Incredible Bread Machine

Richard W. Grant


Tali, does this poem not describe the controversy over Hawaiian Airlines's ticket prices and American Samoa's government?

Here, you see the version of this poem that was edited and condensed by Susan Love Brown et al. --S.H.



This is a legend of success and plunder
and a man, Tom Smith, who squelched world hunger.
Now Smith an inventor, had specialized
in toys. So people were surprised
when they found he, instead
of making toys, was baking bread!

The way to make bread he'd conceived
cost less than people could believe.
And not just make it! This device
could, in addition, wrap and slice!
The price per loaf, one loaf or many:
the miniscule sum of under a penny.

Can you imagine what this meant?
Can comprehend the consequent?
The first time yet the world well-fed!
And all because of Tom Smith's bread.

A citation from the President
for Smith's amazing bread.
This and other honors, too,
were heaped upon his head.

But isn't it a wondrous thing
how quickly fame is flown?
Smith, the hero of today --
tomorrow, scarcely known.

Yes, the fickle years passed by;
Smith was a billionaire,
but Smith himself was now forgot --
though his bread was everywhere.
People asked, from where it came,
would very seldom know.
They would simply eat and ask,
"Was it not always so?"

However, Smith cared not a bit,
for millions ate his bread.
And "Everything is fine," thought he,
"I am rich and they are fed!"

Everything was fine, he thought?
He reckoned not with fate.
Not the sequence of events
starting on that date.
On which the business tax went up,
then, to a slight extent,
the price of every loaf rose, too:
up to one full cent!

"What's going on?" the public cried,
"He's guilty of pure plunder.
He has no right to get so rich
on other people's hunger!"

A prize cartoon depicted Smith
with fat and drooping jowls,
snatching bread from hungry babes,
indifferent to their howls!

Well, since The Public does come first,
it could not be denied
that, in matters such as this,
the Public must decide.
So Antitrust now took a hand.
Of course, it was appalled
at what it found going on.
The "bread trust," it was called.

Now this was getting serious.
So Smith felt that he must
have a friendly interview
with the men in Antitrust.
So, hat in hand, he went to them.
They'd surely been misled;
no Rule of Law had he defied,
but their lawyer said:

"The Rule of Law, in complex times,
has proved itself deficient.
We must prefer the Rule of Men!
It's vastly more efficient.
Now, let me state the present rules,"
the lawyer then went on,
"These very simple guidelines,
you can rely upon:
You're gouging on your prices if
you charge more than the rest.
But it's unfair competition
if you think you can charge less.

"A second point that we would make
to help avoid confusion:
don't try to charge the same amount:
that would be collusion!
You must compete, but not too much,
for, if you do, you see,
then the market would be yours --
and that's monopoly!"

Price too high? Or price too low?
Now which charge did they make?
Well, they weren't loath to charge both
with Public Good at stake!
In fact, they went one better --
they charged "monopoly!"
No muss, no fuss, oh woe is us!
Egad; they charged all three!

"Five years in jail," the judge then said.
"You're lucky it's not worse.
'Robber barons' must be taught
society comes first!"

Now, bread is baked by the government,
and as it might be expected,
everything is well-controlled;
the public well-protected.

True, loaves cost ten dollars each.
But our leaders do their best.
The selling price is half a cent.
Taxes pay the rest.

Saturday, November 11, 2006

What We Owe Our Soldiers

Alex Epstein


Every Veterans Day we pay tribute to our fellow Americans who have served in the military. With speeches and ceremonies, we recognize their courage and valor. But justice demands that we also recognize that we should have far more living veterans than we do. 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 Veterans 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 ( www.aynrand.org ) in Irvine, Calif. The Institute promotes Objectivism, the philosophy of Ayn Rand -- author of Atlas Shrugged and The Fountainhead. Contact the writer at media@aynrand.org .


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Wednesday, November 08, 2006

TIME TO CHART A DIFFERENT COURSE

The DOT's likely decision to rule against Togiola's executive order says a lot. It's saying that even though the federal government commands the most powerful military in the history of mankind, it cannot tell a puny company like HAL what it can or cannot charge for its property. It's a powerful testament to the greatness of America; that righteousness, not force or power, governs the free people of these United States.

People of American Samoa, we have a choice. We can continue our shameful pursuit to force HAL to lower their airfares and provide more seats or we can fight to lower prices while still upholding our freedoms by instead getting the US Congress to allow foreigners to compete with HAL.

We have wasted too much time and our limited resources following the governor's vision of price controls for the airline industry. Our own corrupt government can't hold up to private sector standards, our kids don't have the resources to get a good education and our local infrastructure is deteriorating.

We need to focus our energy and time on our own backyard first, and we must also demand that the "Land of the Free" give our airline market more freedom and choice in the form of foreign competition.