Wednesday, January 24, 2007

A BLESSING IN DISGUISE?

Faleomavaega, Togiola and the Fono can't make a good case to the US Congress, or more importantly to our people, against the minimum wage law by arguing the technicalities and the politics of this issue instead of its principles. Is the minimum wage of $7/hr too high or our wages of $3/hr too low? If 3 cents for a raise is an insult then apparently a $4 hike will correct this social injustice.

Our politicians are saying that the minimum wage should reflect our economic conditions, that it should only rise with what our economy can handle. Theorists say that a minimum wage law has no impact on employment as long as it is set at or below the market price for labor. The "market price for labor" or the "average wage" measures what most people make in a particular industry free of any government mandates. So what our politicians and theorists are saying is that the minimum wage should be set at a level most people are getting anyways.

The only effect of a price floor set at market levels is making it illegal for some laborers to undercut the market price, and this harms mostly immigrants and minorities. A carpenter from Upolu or Asia, for example, may possess superior skills, but bigotry, bias and favoritism are unfortunate hurdles easier to overcome by being able to offer a lower price for his services. As we see in Western Europe, where there are high minimum wage laws, a higher level of unemployment exists among Muslim immigrants than the native populations, and these people are less assimilated into the societies of their host countries. According to a study published by the European Monitoring Centre on Racism and Xenophobia (EUMC), "in 2004 Muslims had the highest male unemployment rate at 13 percent and the highest female unemployment rate at 18 percent, with the UK average jobless rate at 5.5 percent." A higher minimum wage just makes discrimination easier to do.

It's convenient to ignore that the employee has a part in the wage-setting process and that being able to work at low wages is to some people's advantage, mainly the poor, teenagers, immigrants and retirees. It's convenient to paint Starkist as a take-it-or-leave-it company who took advantage of us and will move to a poorer country to take advantage of other people. But convenience doesn't cover up the fact that these poor countries and their "slave" laborers are begging our tuna industry to come. Who's taking advantage of whom?

The only way to raise wages is to affect supply and demand especially since we're pegging the minimum wage to the market price anyway. The more enterprises that open up shop in our territory, the more bidders we'll have to bid up prices for our labor. On the supply side, knowledge, skills and experience are naturally in limited supply and thus, people who obtain these things will be paid more. As our workforce and our economy develops and diversifies, then we'll be in a better position for the tuna industry's inevitable departure.

Unfortunately, the ASG and our local politicians have instead focused their efforts on attacking HAL for their airfares, banning smoking on our private buses, continuing their nickel-and-dime taxation on imported bottled water and perpetuating their irresponsible and un-prioritized government spending by supplementing it with $20 million in bond debt.

Maybe the federal minimum wage will be a blessing in disguise, because after it's implemented, there will be no HAL to attack, no commercial buses to ban smoking on, no imported bottled water to tax and $20 million in junk bonds. In one fell swoop, and the ASG didn't have to break a sweat to complete its agenda this year. How typical.

Monday, January 15, 2007

How to Truly Support Our Troops

Alex Epstein


Whatever their views of President Bush's new "surge" of 20,000 soldiers, both liberals and conservatives continue to claim that they support our troops. Liberals say they support our troops by criticizing or opposing "Operation Iraqi Freedom," which they claim has unnecessarily killed 3,000 soldiers. Conservatives say they support our troops by supporting the mission that most of our troops believe in.

In fact, neither liberals nor conservatives truly support the brave men and women who risk their lives to defend America. For both, "support our troops" is a cheap, undeserved claim to patriotism -- one that obscures their unwillingness to do what is truly necessary to protect America and its soldiers.

Granted, almost everyone wants to give our troops the resources they need to do their jobs: the best weapons, armor, provisions, and training available -- as well as praise, gratitude, and encouragement. But for our government to truly support our troops, it must do far more than help them do their jobs; it must give them the right jobs to do -- the jobs that will effectively defend America while minimizing the risk to their lives. Our government must place soldiers' lives at risk only when American freedom is threatened, and during war it must give them the objectives and tactics that will defeat the enemy as quickly as possible.

The conservatives' Iraq war does not meet this standard. It could have -- if the war had been undertaken as a step in defeating the anti-American, terrorist-sponsoring regimes of the Middle East and thus rendering the region non-threatening. Instead, President Bush made the war's primary focus the welfare of Iraqis -- above all, their "freedom" to elect whatever regime they wished, no matter how anti-American. Further sacrificing Americans to Iraqis, Bush and his subordinates imposed crippling "rules of engagement" (also supported by liberals) that place the lives of civilians in enemy territory above our soldiers. Our hamstrung troops in Iraq have not been allowed to smash a militarily puny insurgency; instead, they have been forced to suffer an endless series of deaths by an undefeated enemy, while Islamic totalitarians worldwide rejoice in our defeat.

One does not support our troops by sending them to fight wars of self-sacrifice and then thanking their corpses. The conservatives' call to "stay the course" in Iraq -- or to add 20,000 troops to that course -- is harmful to America and its troops because the mission has been conceived and conducted in defiance of American interests.

If the conservatives do not support our troops, then do the liberals? Absolutely not.

Observe that while liberals criticize the Iraq war for killing our troops, they propose no alternative policy that would protect America against Islamic totalitarianism and its state supporters, including the militant, terrorist theocracy of Iran. Liberals' only policy proposal is that we not take military action in Iraq or in any other country beyond Afghanistan. Why? Because they believe that America has no right to defy the "international community" or "impose its will on the rest of the world" -- i.e., to aggressively pursue its self-defense. They, like the conservatives, advocate self-sacrifice in foreign policy. Denying our right to an all-out military defense, liberals say we must engage committed enemies like Iran with endless "diplomacy," i.e., bribery, appeasement, and inaction.

One does not support our troops by keeping them home when their and our freedom requires military action. Our soldiers did not join the military to sit on their hands while Iran prepares for nuclear jihad.

If liberals were truly concerned with our troops in Iraq and the freedom our soldiers should be fighting for, they would call for our soldiers to smash the insurgency and move on to defeat our other enemies. Instead, they call for a self-effacing retreat from Iraq, followed by further kowtowing to the anti-Americans at the United Nations -- actions that would greatly embolden the Islamic totalitarians.

Liberals oppose the Iraq war and other wars, not because they truly value our soldiers, but because they -- like the conservatives -- oppose our soldiers mounting an uncompromising, self-assertive defense of America. But such a defense is required to defeat the threat of Islamic totalitarianism. We must adopt a foreign policy of self-interest and commit to defend ourselves using our full, unmatched military might. Neither the conservatives nor the liberals support this, and thus they end up sacrificing our troops and our freedom.

Do not let the conservatives or liberals pose as defenders of America or its military. Demand that they start truly protecting America and its soldiers -- or be scorned as traitors to both.


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 .


Copyright © 2007 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 .

To Tali: U.S. Congress Raising American Samoa's Minimum Wage

Stuart K. Hayashi

Tali, the New York Sun ran an op-ed from the Hudson Institute about U.S. House Speaker Nancy Pelosi (D-CA) now including American Samoa in the bill to raise the federal minimum wage to $7.25 an hour.

You can read that here.

What do you think about the author's assessment of the situation?

Saturday, January 13, 2007

Minimum Wage, Maximum Hypocrisy

The federal minimum wage bill exposes the maximum hypocrisy of those who claim that such a law helps the working poor. While Congress intends to impose a higher wage floor in the Northern Mariana Islands, Democrats have made a back room deal to ensure it will stay clear of American Samoa . By doing so, they have acknowledged that using the force of law to raise wages destroys the jobs for those who need them the most.

In American Samoa , the tuna cannery may indeed “rule the roost” as the Washington Post likes to imply. The fact is that our canneries have a choice just as every American family has when they go out shopping. The tuna industry doesn’t have to lobby anybody to keep wages at a certain level; they are free to shop around for laborers in the global economy where there are workers who are willing to work at lower prices. Our labor force is in direct competition with a highly competitive market!

Because our tuna industry is our largest employer, the issues Republicans raise concerning any hike in the federal minimum wage become very prominent in our territory. Other states and territories have other industries to cover up the resulting loss of jobs from the lower rung of the economic ladder whenever the minimum wage rises. But for us, the last rung of that damn ladder employs approximately 5000 of our people.

It’s an undeniable fact that raising the minimum wage causes a lost of jobs that employ the very people self-righteous politicians claim to help. While we need more pay in order to afford healthcare and other rising costs, for our people, we just need jobs period! A low paying job beats no job any day.

Our territory is isolated. The high costs associated with being far away from the rest of the world is what’s keeping us a one-industry economy. If the US Congress wants to help us down here, then they should exempt us from US Cabotage laws to allow more competition in the air transport market to help lower transportation costs. They could also help us institute local policies that encourage private sector growth and diversification (low taxes, low regulation and zero government competition) and improve our people’s skills and our children’s education.

Moreover, a higher minimum wage does nothing to protect immigrants from abusive employers. In fact, a higher minimum wage will more than likely push them into the underground economy and engage them in illegal and dangerous activities just so they can put food on the table. Labor abuses are more likely a result of immigration laws that discourage such persons from coming to the local government for help and protection. It’s the same story in American Samoa and rest of America as well.

We need higher wages in Samoa . But higher wages will come from growth and diversification of our private sector and improvement of our people’s skills. That will take time, but more importantly, courage from our local politicians to implement policies that will make such things happen. In the meantime, we need to encourage Congressman Faleomavaega to stand up to the ideologues in his party who would cause the departure of our jobs just so they can inject their ideology into the national agenda.

Saturday, January 06, 2007

NOTHING IS SO PERMANENT

One of Nobel Laureate Milton Friedman's most famous quotes is, "Nothing is so permanent as a temporary government program."

I recall this quote while reading Jeff Alwin's letter concerning KVZK. Mr. Alwin's arguments help to explain why government departments that compete with the private sector are here to stay today, tomorrow and forever no matter how efficient the free market becomes.

First is the notion that one is entitled to live at another person's expense. While KVZK may be free to anyone with an antenna, someone's still out there footing the bill. There are really only two reasons liberals use to justify this "public service" by government: 1) the users are poor and 2) the "someone" footing the bill is rich and deserves to be forced to pay for it. Of course, by this silly standard the rich should also fork up the money to ensure everyone gets a copy of Samoa News!

As long as the concept of inequality in wealth is enough justification for redistribution, some government program will exist to serve that purpose. While there are people in dire circumstances and in need of true help, government programs are rarely successful in targeting those people only. Instead, these "free" or "cheap" services subsidize those who can afford to pay the market price but don't.

This results in a loss to a consumer base for which the private sector would normally serve. Why would any rational person pay for something the government provides for free or at a subsidized price? Why go to BoH when there's the DBAS or Blue Sky when there's ASTCA or PCS-TV when there's KVZK-TV? This is how government crowds out private investment and competition, and thus prolongs the life of the government program and its interference in the marketplace.

The second reason and more determining factor in the longevity of a government program is the number of constituents who become dependent upon it. Both the users and administrators of the program will fight tooth and nail to maintain the "free service" because it will become an expense they've never had to personally bear. So to shift the cost of the program from the "someone" to the "user" will be seen as an attack on the "user" while it will be a "relief" to the "someone" who's been paying for it the entire time.

And it's funny how Mr. Alwin (especially politicians) talks about procuring funding as if taxpayers didn't exist and funds for government programs grew on trees.

The market price sums up what's possible in a free society. It's important for us to pay the market price so as to encourage real investment, real development and real progress for our people. As we progress economically, costs for both our wants and needs will come down thus raising the standard of living for all.

KVZK-TV is nice but not free. If we are to move forward, we need to begin shutting down these unnecessary costs to us taxpayers and move such functions to where they belong: the private sector.

Friday, January 05, 2007

An Open Letter to CEOs: Defend the Profit Motive -- Or Perish

American businessmen are destroying themselves by appeasing their enemies.

Alex Epstein


Dear CEO:

As a grateful customer of America's productive businesses -- as someone who knows that his well-being depends on yours -- I implore you to stop apologizing to your attackers. Stop pledging to "reform," to become "better corporate citizens," to embrace crippling new government regulations. As the target of an ongoing witch-hunt, you grovel at your peril.

The overwhelming majority of you have committed no crimes, yet you accept a collective guilt for the crimes of others. You accept the premise that fraud committed by a handful of cheats somehow requires atonement by all businesses. "We must and will act collectively to rebuild the trust that has been lost by the reckless disregard of a few," promised the Business Roundtable, which represents some of the most successful American corporations. Nearly all of you have given your unequivocal endorsement to the government's campaign to restrict your freedom by micromanaging your accounting practices, by choosing which firms you can associate with, and by deciding who may be appointed to your boards.

When Islamic terrorists killed 3,000 Americans on September 11, there was no call for all Muslims to "rebuild the trust" of the public. When "eco-terrorists" fire-bomb homes and burn down ski resorts, no one calls for an Environmentalist Oversight Board to pre-empt the environmentalists' next act of destruction. Why are only businessmen collectively reviled and treated as guilty until proven innocent?

Do not say it is because you do not "contribute enough to society." We all know that businessmen produce the computers, airplanes, medicines, and food that improve all our lives. It is not your effect on others, but your motive that causes you to be damned. Other groups, we are told, have a "noble," selfless motivation -- Muslims serve Allah, environmentalists sacrifice for the sake of nature. No matter how many terrorist attacks occur in the name of Islam's call for jihad against non-Muslims or the environmentalists' quest to "safeguard nature" from man -- such groups are viewed as pursuing inherently moral and benevolent ends. You, by contrast, are viewed as inherently immoral. Your "corrupt" desire for profits is why you are the first scapegoat for every social problem -- from stock-market crashes to power crises to rampant obesity -- and why the proposed solution is always more regulation.

It is your motive, therefore, that you must uncompromisingly defend. You must assert your moral right to make money -- not because you intend to use it for some "public purpose," but because you have earned it and are entitled to enjoy its benefits.

Instead, you apologize for pursuing your self-interest. You claim that your real motive is self-sacrifice -- that you are eager to subordinate your profits for the sake of the "community." Your conciliatory attitude, you have hoped, would improve your public image and make the government less eager to impose greater controls and to expropriate more of your wealth. But has this approach worked? Or has it instead simply surrendered the sphere of morality to the enemies of capitalism, thereby inviting ever-increasing constraints on business?

You are simply sanctioning your own victimization. You are conceding that you have no moral right to the profits you have earned, and that the fundamental justification for your existence is your self-effacing willingness to serve others. No amount of altruistic posturing will ward off assaults based on hatred of profit, capitalism, and self-interest. Everyone knows that the essence of your work is the pursuit of profit. To treat it as shameful by trying to disguise its nature leaves you defenseless. If you continue to echo the unquestioned bromide that virtue consists of selfless servitude, you will only invite more smears, more scapegoating, more lawsuits, more government controls.

Your only option, if you wish to survive and be free, is to morally disarm your attackers by upholding the virtue of making money. Defend your pursuit of profit. Be proud that you have become rich; your income -- unlike that of the politicians who denounce you -- is the result not of coercion, but of honest production and voluntary trade. Denounce the regulations that treat you as a criminal. Proclaim that you, too, are included in the Declaration of Independence -- that your life, liberty, and pursuit of happiness are yours by inalienable right, and need not be justified by your becoming a rightless servant of "society."

Businessmen beware: appeasement of your moral enemies is leading you to destruction. Do any among you have the courage to stand up and fight?



Alex Epstein is a writer for the Ayn Rand Institute in Irvine, Calif. The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead.


Copyright © 2002 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 .