When I have a discussion with supporters of the minimum wage law, I start by asking whether they would pay $7 an hour for someone to cut their lawn. Most are caught off guard by my question. I guess that when it comes to their support of the minimum wage, they are thinking of someone else paying it and not themselves.
When they have figured out that I’ve put them on the spot to assume some responsibility for their beliefs, most are quick to defend themselves by saying, “Yes, I would pay $7 an hour for someone to mow my grass!”
I realize that their answer is most likely a knee jerk reaction made in self-defense, so I come back with another argument of minimum wage supporters and ask, “But how can someone live off of $7 an hour? Why not pay your worker $8, $9 or $15 an hour? Surely they can pay their bills if you pay him at least $10 or more.” Usually, by this time, I get the answer, “Well, if I have to pay that much, I might as well cut my own grass.”
Just for kicks and giggles, I ask supporters, “What if someone came to you and offered to cut your grass for less than the minimum wage? Would you pay him, because, you know, that would technically be against the law?”
We are seeing that the minimum wage reduces employment and raises costs for everyone, because the only way wages can go up without those side-effects is by increasing productivity. Any leader who is truly concerned about lifting the standards of living for our people would focus public policy on making that happen.
But blaming the disasters of the minimum wage on corporate greed and threatening the canneries’ federal incentives as Faleomavaega is doing won’t help us address a long term problem. Especially for those who we want to hire to mow our lawns.
Tuesday, December 02, 2008
Monday, November 24, 2008
Who is the Fono Kidding?
Now that lawmakers can claim their office expense allowances as taxable income, Senator Moliga believes “we can see some additional revenue going to the government”. But all they are doing under the new law is reducing their costs to us taxpayers, and that’s if they choose to do so.
If cutting its own costs is the Fono’s definition of generating new revenues, then all anyone has to do to get rich in this life is not spend any money at all.
Revenue is the result of producing something and then selling that product to somebody else. But what does the Fono produce that helps our economy grow? Legislation? Toilet paper adds more value to the economy than the paper many of their laws are written on.
If the Fono wants to help the ASG generate real new revenue, it can help by easing the burden on the producers of our society: business owners, employers, investors, employees, farmers and so on. Reduce their taxes, remove unnecessary red tape, and don’t compete with them using their own tax dollars.
Until then, the Fono shouldn’t pretend it’s doing anyone any favors by taxing its own allowances.
If cutting its own costs is the Fono’s definition of generating new revenues, then all anyone has to do to get rich in this life is not spend any money at all.
Revenue is the result of producing something and then selling that product to somebody else. But what does the Fono produce that helps our economy grow? Legislation? Toilet paper adds more value to the economy than the paper many of their laws are written on.
If the Fono wants to help the ASG generate real new revenue, it can help by easing the burden on the producers of our society: business owners, employers, investors, employees, farmers and so on. Reduce their taxes, remove unnecessary red tape, and don’t compete with them using their own tax dollars.
Until then, the Fono shouldn’t pretend it’s doing anyone any favors by taxing its own allowances.
Monday, November 03, 2008
Let's Just Ban Life
Did you know that there were 21,634 alcohol-induced deaths in the U.S. in 2005? Also in 2005, there were 27,472 vehicle fatalities in the country. If you like to swim, keep in mind that 3,582 people died in 2005 alone from swimming. And don’t play with fireworks, 11 people died from such dangerous products in 2006.
Actually, if you’re alive and reading this, you have a 100% chance of dying one day. With a statistic like that, the Fono should ban people from even living at all.
Monday’s letter to the editor by an anonymous writer, titled "Secondhand Smoke is Lethal” refers to a 1993 EPA report that declared environmental tobacco smoke (ETS) a dangerous carcinogen.
Robert Levy of the Cato Institute writes that in July of 1998, “federal judge William L. Osteen lambasted the EPA for ‘cherry picking’ the data, excluding studies that ‘demonstrated no association between ETS and cancer,’ and withholding ‘significant portions of its findings and reasoning in striving to confirm its a priori hypothesis.
Both ‘the record and EPA’s explanation,’ concluded the court, ‘make it clear that using standard methodology, EPA could not produce statistically significant results.’
Despite Mr. Levy’s findings, I’m not debating the dangers of second-hand smoking. I’m defending our individual right to engage in such a risk. In my opinion, life is just not worth living if there were no risks to take at all.
Actually, if you’re alive and reading this, you have a 100% chance of dying one day. With a statistic like that, the Fono should ban people from even living at all.
Monday’s letter to the editor by an anonymous writer, titled "Secondhand Smoke is Lethal” refers to a 1993 EPA report that declared environmental tobacco smoke (ETS) a dangerous carcinogen.
Robert Levy of the Cato Institute writes that in July of 1998, “federal judge William L. Osteen lambasted the EPA for ‘cherry picking’ the data, excluding studies that ‘demonstrated no association between ETS and cancer,’ and withholding ‘significant portions of its findings and reasoning in striving to confirm its a priori hypothesis.
Both ‘the record and EPA’s explanation,’ concluded the court, ‘make it clear that using standard methodology, EPA could not produce statistically significant results.’
Despite Mr. Levy’s findings, I’m not debating the dangers of second-hand smoking. I’m defending our individual right to engage in such a risk. In my opinion, life is just not worth living if there were no risks to take at all.
Tuesday, October 14, 2008
Money: More Than a Piece of Paper
The origin and role of money in the economy is one of the most important lessons we need to learn. A lack of proper understanding often leads to public policies that have disastrous consequences such as hyperinflation or just inflation period.
Money, as Adam Smith put it, is a "medium of exchange". Economists Thomas Sowell and Alan Greenspan both pointed out that even sea shells were used as a form of money. Mr. Sowell explains in his book, Basic Economics, how cigarettes from Red Cross packages were used as money among prisoners in P.O.W camps during World War II. He notes that the least popular brand of cigarettes circulated as money, while the most popular were smoked.
But what makes money, money? First, people with whom you want to trade with have to want to accept it. "Want" being the key word here. If there is ever a mass consensus that the US dollar, for example, is useless, there is little government can do to force people to accept it. That will be especially true on the international market and with foreign governments who hold the Dollar as reserves.
Any form of money has to be tied to what people consider valuable. For Europeans, it was gold; for Samoans, it was the ie toga. Gold, as Mr. Greenspan puts it, has both artistic and functional uses. The ie toga represents honor, history and pride to the Samoan.
The other aspect of money is that it is limited. If there is more gold coins or paper bills or ie togas floating around than there are goods and services in the economy, prices will go up.
The point I want to make is money is whatever most people find valuable and will accept as payment for their property; is limited in supply and ideally represents the amount of products and services being demanded and supplied in an economy.
When we ignore the nature, origin and role of money in an economy is when we start getting into some serious trouble.
Money, as Adam Smith put it, is a "medium of exchange". Economists Thomas Sowell and Alan Greenspan both pointed out that even sea shells were used as a form of money. Mr. Sowell explains in his book, Basic Economics, how cigarettes from Red Cross packages were used as money among prisoners in P.O.W camps during World War II. He notes that the least popular brand of cigarettes circulated as money, while the most popular were smoked.
But what makes money, money? First, people with whom you want to trade with have to want to accept it. "Want" being the key word here. If there is ever a mass consensus that the US dollar, for example, is useless, there is little government can do to force people to accept it. That will be especially true on the international market and with foreign governments who hold the Dollar as reserves.
Any form of money has to be tied to what people consider valuable. For Europeans, it was gold; for Samoans, it was the ie toga. Gold, as Mr. Greenspan puts it, has both artistic and functional uses. The ie toga represents honor, history and pride to the Samoan.
The other aspect of money is that it is limited. If there is more gold coins or paper bills or ie togas floating around than there are goods and services in the economy, prices will go up.
The point I want to make is money is whatever most people find valuable and will accept as payment for their property; is limited in supply and ideally represents the amount of products and services being demanded and supplied in an economy.
When we ignore the nature, origin and role of money in an economy is when we start getting into some serious trouble.
Monday, March 24, 2008
Thank You Asian Businesses
If every business in American Samoa were Samoan owned, do you know what we would think when any store closed its doors? Most of us would rightly conclude that the enterprise just wasn't any good. It either was in the wrong market, didn't satisfy its customers, couldn't control or account for its costs, couldn't collect on its 'aitalafu', couldn't keep and nurture an effective and educated workforce, or any combination of these and other factors that hurt their bottom line.
But Jim Brittle's letter to the editor, "Facing Reality", asks us to ignore these fundamentals and encourages us to blame business failure simply on Asian businesses.
The fact that competitors in our somewhat free market are of a different race trumps all other considerations as to why a Samoan store owner can or cannot keep his doors open? Mr. Brittle does point to greed, corruption and consumer preference for lower prices (surprise, surprise) as well, but he doesn't explain those points in further detail.
There is no other conclusion one can make from his letter other than that Samoan businesses are failing because of Asian immigrants, and that's it. That sort of reasoning relies on racial phobia, and it is not only an insult to our Asian brothers and sisters but it does a complete disservice to the Samoan community as well.
Samoans can make it in this world. We don't need to be sheltered from competition; we need to learn from the competition. For that, I thank the Asian business community.
But Jim Brittle's letter to the editor, "Facing Reality", asks us to ignore these fundamentals and encourages us to blame business failure simply on Asian businesses.
The fact that competitors in our somewhat free market are of a different race trumps all other considerations as to why a Samoan store owner can or cannot keep his doors open? Mr. Brittle does point to greed, corruption and consumer preference for lower prices (surprise, surprise) as well, but he doesn't explain those points in further detail.
There is no other conclusion one can make from his letter other than that Samoan businesses are failing because of Asian immigrants, and that's it. That sort of reasoning relies on racial phobia, and it is not only an insult to our Asian brothers and sisters but it does a complete disservice to the Samoan community as well.
Samoans can make it in this world. We don't need to be sheltered from competition; we need to learn from the competition. For that, I thank the Asian business community.
Friday, March 14, 2008
Individual vs. the Collective
Savaii P. Amitoelau's guest editorial titled "Faasamoa and Democracy" explains in detail why the Senate's ban on campaign signs wouldn't last a day in court. Sometimes I wonder if our esteemed leaders in the Fono have even read our constitutions, which they swore to uphold and protect. Nevertheless, his editorial touched on a subject that rightly concerns a lot of us, and that is the conflict between individualism and the Samoan culture.
Contrary to popular belief, individualism is not about valuing the individual above everything else. It's not about glorifying or putting the individual before everybody in the world. Individualism is not a question of value; it is a matter of an objective right. You, as an individual, exist and have natural rights that derive from your existence.
Society, on the other hand, doesn't exist in the sense that it's an actual observable object. There is no person by the name of "Society" with whom you or I can talk to. Society has no head, no heart, no blood flowing through the veins.
What people are referring to when they talk about society are different organizations of individuals such as families, villages, churches, schools, businesses, football teams, rugby teams, volleyball teams, etc. "Society" is thus a term that encompasses organizations of individuals. So without the individual, there is no society.
Individuals come together to form these organizations because they get value out of doing so. One finds love, support and guidance in a caring family. In church, a believer joins others in song, praise, worship and prayer. Individuals work together in pursuit of making money in business. In charities, individuals find value in helping other individuals.
When we talk about the eroding of the fa'asamoa or society or our culture, we're talking about the institutions that make them up. If a family doesn't care about their children, if a church bickers more than it worships, if a business incurs losses rather than makes a profit, "society" suffers, our culture erodes.
And what incentive do our institutions have to improve if the attitude is that individuals owe allegiance to them regardless of how crummy the family is, how dysfunctional the church is, or how dissatisfying a business' service or product may be?
Would Coca-Cola be what it is today if the individual did not have the right to choose Pepsi instead? Would the Nintendo Wii be so innovative if it didn't have the Sony Play Station or Microsoft Xbox on its heels? We can find plenty of these comparisons in a free society where individual rights are recognized and protected.
I see individual freedom and rights as the essential building blocks to society. It is more than obligation and duty that most individuals are part of the fa'asamoa; rather, it's the love, pride, tradition, heritage, support, communal relationships and value that we get from it. In my opinion, that is what made our fa'asamoa last so long, and it can only make it stronger.
Contrary to popular belief, individualism is not about valuing the individual above everything else. It's not about glorifying or putting the individual before everybody in the world. Individualism is not a question of value; it is a matter of an objective right. You, as an individual, exist and have natural rights that derive from your existence.
Society, on the other hand, doesn't exist in the sense that it's an actual observable object. There is no person by the name of "Society" with whom you or I can talk to. Society has no head, no heart, no blood flowing through the veins.
What people are referring to when they talk about society are different organizations of individuals such as families, villages, churches, schools, businesses, football teams, rugby teams, volleyball teams, etc. "Society" is thus a term that encompasses organizations of individuals. So without the individual, there is no society.
Individuals come together to form these organizations because they get value out of doing so. One finds love, support and guidance in a caring family. In church, a believer joins others in song, praise, worship and prayer. Individuals work together in pursuit of making money in business. In charities, individuals find value in helping other individuals.
When we talk about the eroding of the fa'asamoa or society or our culture, we're talking about the institutions that make them up. If a family doesn't care about their children, if a church bickers more than it worships, if a business incurs losses rather than makes a profit, "society" suffers, our culture erodes.
And what incentive do our institutions have to improve if the attitude is that individuals owe allegiance to them regardless of how crummy the family is, how dysfunctional the church is, or how dissatisfying a business' service or product may be?
Would Coca-Cola be what it is today if the individual did not have the right to choose Pepsi instead? Would the Nintendo Wii be so innovative if it didn't have the Sony Play Station or Microsoft Xbox on its heels? We can find plenty of these comparisons in a free society where individual rights are recognized and protected.
I see individual freedom and rights as the essential building blocks to society. It is more than obligation and duty that most individuals are part of the fa'asamoa; rather, it's the love, pride, tradition, heritage, support, communal relationships and value that we get from it. In my opinion, that is what made our fa'asamoa last so long, and it can only make it stronger.
Saturday, March 01, 2008
FCC Petition
If it is Larry Fuss' intention to prevent fraud (as in false advertising by cell phone companies) or to obtain remedy for injury suffered due to fraud, then I agree with him. The proper role of government is to enforce contracts, and as a colleague of mine pointed out, fraud is a premeditated breach of contract. But Mr. Fuss' petition is not about addressing fraud; it is about forcing cell phone companies to apply their domestic long distance rates to American Samoa , which is not the proper role of government.
The only reasons that Mr. Fuss offers up as justification for all of this are that American Samoa is now part of NANP and that the FCC has succeeded in mandating domestic rates on landlines. I would think a lot of factors came into play as to why the FCC left cell phone companies out from their original mandate on domestic rates and as to why cell phone companies are willing to apply their domestic rates to Puerto Rico, Guam and the US Virgin Islands but not to American Samoa.
Are the markets more profitable in those territories compared to our own? Is it because we don't have fiber optic cable? Is it because communication through satellite is cost prohibitive? How do wireless transaction costs compare to landlines? Is it more expensive? Has ASTCA invested in the necessary infrastructure to support the integration of cell phone companies' domestic rate schedule? Are these questions even significant? I'm no telecommunications expert, but I'm inclined to believe that the free market is in the best position to answer these kind of questions.
Mr. Fuss did an excellent job of ripping into my hyperbole where I exaggerated the need for the FCC to investigate radio advertising in American Samoa. I'll take his word that "the cost per listener on radio stations in American Samoa is much lower than that charged on the mainland", although I wished he provided us with some figures or references. The point I was trying to make was that it's pretty much in the "left field" that this kind of stuff is even brought up for discussion in the first place.
Why should businesses have to justify their costs to some bureaucrat in the FCC or to the public before they can price their property?
The only reasons that Mr. Fuss offers up as justification for all of this are that American Samoa is now part of NANP and that the FCC has succeeded in mandating domestic rates on landlines. I would think a lot of factors came into play as to why the FCC left cell phone companies out from their original mandate on domestic rates and as to why cell phone companies are willing to apply their domestic rates to Puerto Rico, Guam and the US Virgin Islands but not to American Samoa.
Are the markets more profitable in those territories compared to our own? Is it because we don't have fiber optic cable? Is it because communication through satellite is cost prohibitive? How do wireless transaction costs compare to landlines? Is it more expensive? Has ASTCA invested in the necessary infrastructure to support the integration of cell phone companies' domestic rate schedule? Are these questions even significant? I'm no telecommunications expert, but I'm inclined to believe that the free market is in the best position to answer these kind of questions.
Mr. Fuss did an excellent job of ripping into my hyperbole where I exaggerated the need for the FCC to investigate radio advertising in American Samoa. I'll take his word that "the cost per listener on radio stations in American Samoa is much lower than that charged on the mainland", although I wished he provided us with some figures or references. The point I was trying to make was that it's pretty much in the "left field" that this kind of stuff is even brought up for discussion in the first place.
Why should businesses have to justify their costs to some bureaucrat in the FCC or to the public before they can price their property?
Monday, February 25, 2008
Opposition to FCC Petition
( Below is my written testimony to the FCC concerning a petition submitted by South Seas Broadcasting Inc. to mandate that cell phone companies apply their domestic long distance rates to American Samoa.)
I'm not going to pretend that I'm a telecommunications expert, but I believe a few basic assumptions apply to market prices of cell phone calls to our territory. I assume the market is open to anyone to provide services. I also assume that one makes the most money by having the largest consumer base as possible. If my assumptions are wrong, please explain to me why.
Competition and the profit motive drive prices down, so why do we have this FCC petition to force cell phone companies to apply domestic rates to our territory?
Is it because we're Americans too? Is that the standard for setting prices? Your ethnicity, race, or nationality?
Is it because cell phone companies and their stockholders are "greedy"? When I think of that word, I imagine savage cavemen with clubs drooling at the mouths over piles of cash. Or fat men slobbering and chomping down on a chicken drumstick laughing all the way to the bank.
Instead, what you're likely to see at cell phone companies are professional men and women working hard and being accountable to their customers. They are fathers, mothers, members of the community. Their stockholders are also likely to be hard working people putting in their life savings through 401k's to earn the highest returns possible for retirement. The word "greedy", however, wipes that all away.
Who knows, maybe our oft-raided ASG Retirement Fund is invested in these companies? Surely, our retirees want the most profitable return as possible on their - I'm sorry - the Fono's money.
Or is it just perhaps that our markets are different?
I got an idea. An ad rate at KABC-AM in Los Angeles is $1083 for a 30- second spot. Pretty expensive, yeah? But consider this: the population in L.A. is close to 10 million people (2006 est.). That's 0.0001083 cents per potential customer. Let's say radio advertising in American Samoa goes for $100 for a 30-second spot. Pretty cheap compared to L.A.? But for 60,000 potential customers, that's 0.00166667 per potential customer. That's 15 times more than what they're charging in the mainland. That's price-gouging!
If anything, the FCC should look into the pricing practices of radio stations in American Samoa. And why stop there? We're a democracy where the majority rules. Anything and everything is up for a vote. Individual rights don't exist, and you definitely don't have the right to price your property as you see fit.
If the FCC doesn't uphold individual rights then perhaps its license should be revoked.
I'm not going to pretend that I'm a telecommunications expert, but I believe a few basic assumptions apply to market prices of cell phone calls to our territory. I assume the market is open to anyone to provide services. I also assume that one makes the most money by having the largest consumer base as possible. If my assumptions are wrong, please explain to me why.
Competition and the profit motive drive prices down, so why do we have this FCC petition to force cell phone companies to apply domestic rates to our territory?
Is it because we're Americans too? Is that the standard for setting prices? Your ethnicity, race, or nationality?
Is it because cell phone companies and their stockholders are "greedy"? When I think of that word, I imagine savage cavemen with clubs drooling at the mouths over piles of cash. Or fat men slobbering and chomping down on a chicken drumstick laughing all the way to the bank.
Instead, what you're likely to see at cell phone companies are professional men and women working hard and being accountable to their customers. They are fathers, mothers, members of the community. Their stockholders are also likely to be hard working people putting in their life savings through 401k's to earn the highest returns possible for retirement. The word "greedy", however, wipes that all away.
Who knows, maybe our oft-raided ASG Retirement Fund is invested in these companies? Surely, our retirees want the most profitable return as possible on their - I'm sorry - the Fono's money.
Or is it just perhaps that our markets are different?
I got an idea. An ad rate at KABC-AM in Los Angeles is $1083 for a 30- second spot. Pretty expensive, yeah? But consider this: the population in L.A. is close to 10 million people (2006 est.). That's 0.0001083 cents per potential customer. Let's say radio advertising in American Samoa goes for $100 for a 30-second spot. Pretty cheap compared to L.A.? But for 60,000 potential customers, that's 0.00166667 per potential customer. That's 15 times more than what they're charging in the mainland. That's price-gouging!
If anything, the FCC should look into the pricing practices of radio stations in American Samoa. And why stop there? We're a democracy where the majority rules. Anything and everything is up for a vote. Individual rights don't exist, and you definitely don't have the right to price your property as you see fit.
If the FCC doesn't uphold individual rights then perhaps its license should be revoked.
Subscribe to:
Posts (Atom)