The ASG Critique

Elaborating On Greed

2011-10-28T18:27:00.002-10:00

Malinvestments

2011-10-28T18:27:00.001-10:00

Cutting Down Trees With Sticks

2011-10-28T18:24:00.000-10:00

In The Spirit Of Transparency

2011-10-28T18:21:00.000-10:00

The Great Leader Who Could Have Been

2011-10-28T18:19:00.002-10:00

Stuck In Second Class

2011-10-28T18:19:00.001-10:00

Cable TV Critique Needs Some Perspective

2011-10-28T18:18:00.001-10:00

Greed in the 21st Century

2011-10-28T18:17:00.000-10:00

And The Show Goes On...

2011-10-28T18:16:00.000-10:00

The Liberal Let Down-A Depressive Disappointment

2011-10-28T18:15:00.000-10:00

Budget numbers don't add up

2011-10-28T18:13:00.003-10:00

Government Shutdown

2011-10-28T18:13:00.001-10:00

What politics should be all about

2011-10-28T18:12:00.001-10:00

ASG need for limited Government

2011-10-28T18:11:00.000-10:00

Home Economics

2011-10-28T18:10:00.000-10:00

The Future Belongs to Us

2011-10-28T18:07:00.000-10:00

Shrinking Pie Equals Bad Politics

2011-10-28T18:06:00.002-10:00

Without Foundation?"

2011-10-28T18:06:00.001-10:00

With Eyes Wide Open

2011-10-28T18:05:00.000-10:00

A Spending Problem, Not A Revenue Problem

2011-10-28T18:04:00.000-10:00

In These Difficult Times…

2011-10-28T18:03:00.000-10:00

Budget Busters

2011-10-28T18:02:00.002-10:00

It’s Not About The Money

2011-10-28T18:02:00.001-10:00

The Flaws of Progressive Taxation

2011-10-28T18:01:00.002-10:00

Just A Little More Criticism

2011-10-28T18:01:00.001-10:00

Avoiding Taxation

2011-10-28T17:57:00.000-10:00

Tax Justifications

2011-10-28T17:56:00.000-10:00

Failure Of Governance

2011-10-28T17:55:00.002-10:00

Protecting Our Culture

2011-10-28T17:55:00.001-10:00

Our Culture is not the Problem

2011-10-28T17:53:00.002-10:00

Irreconcilable Contradictions

2011-10-28T17:53:00.001-10:00

The Future of Off-Island Referrals

2010-02-27T07:37:00.002-10:00

Talifaitasi W. Satele

When Governor Togiola mentioned earlier in the year that government already operates businesses (his examples were ASPA, ASTCA and ASCC), he forgot to mention LBJ. Had the government hospital been popular with the People, believe me, he would have touted it as a shining example of government at its best.

Yet, it is not. Perhaps the Governor’s near death experience there didn’t help its standing with him either (no offense, just making a point). When that government hospital couldn’t cure him, he was transported via a government airplane to yet another government hospital (Tripler), only later to be transferred to a private hospital (Straub) where they finally saved his life.

There were two lessons that we’ve learned from the above. First was that not even the Governor’s life is safe at the LBJ. The second was that many of our People, like Togiola, rely on the advances of a largely private sector health care market in the US. Our government hospital may provide universal access, but it unfortunately does not provide the critical services needed to render off-island referrals unnecessary.

The ASG, a long time ago, assumed the responsibility of providing healthcare to all of our People. Yet its actions imply that it has no such duty. Its budget is way over in the red, its spending and purchases are extremely questionable, its revenues in the tank after years of watching our economy fall over the cliff.

There are three important considerations that arise from our medical dilemma.

First is that this is not only a local issue (especially in regards to off-island referrals). In addition to getting its financial house in order, the ASG should argue very loudly (along with Faleomavaega) that waiving the Cabotage law in an effort to lower airfares is really a matter of life and death. The ASG and the Congressman should also look into arrangements where our People can buy insurance from other States, especially if there regulatory hurdles that now stand in the way.

The second consideration is on the national level, where Democrats in Congress are looking to control health insurance prices, mandate Americans to purchase health insurance plans, regulate and even outlaw certain health insurance practices, and compete with the private sector by creating a public option. The goal, of course, is to provide universal access.

That sounds a lot like LBJ. Perhaps Faleomavaega should invite Congressional Democrats to take a trip to LBJ to get a picture of what a government takeover of the health care industry would look like before enacting any major overhaul.

The last but most important consideration is what makes the US healthcare market the most advanced provider in the world. It’s because, for the most part, it’s still largely free-market. Prices for drugs, services, doctors’ fees, equipment and surgeries have governmental oversight but are not controlled. The system still relies heavily on personal responsibility and participation in the form of co-payments and the costs of insurance plans themselves.

There are plenty of inefficiencies in the market today, but it’s a march toward a freer market based system that will make it better, not an LBJ-styled government bureaucracy we’re all too familiar with in American Samoa.

Something Is Not An Answer, It’s An Excuse

2010-01-26T20:46:00.001-10:00

Talifaitasi W. Satele

I find it quite ironic that the answer to COS’s departure due to government intrusion (the minimum wage law) is more government.

How nice it is for government to offer itself as the solution to the very problem it created. Hence the excuse that it must do something rather than nothing.

Yet the last thing we want is for our government to make matters worse. That is not an unreasonable demand for the People to expect of their elected representatives. Something is better than nothing— when that something is actually better than nothing.

If that is not the case, then lawmakers earn every single dollar we pay them by deciding to sit on Governor Togiola’s proposal.

Our objection to the governor’s proposal is the government’s poor track record in running businesses. ASG’s involvement into ASTCA’s business has meant that the semi-autonomous company’s revenues go to pay for the ASG’s loans rather than improving services and its infrastructure. ASG’s involvement into ASPA’s business has meant that the ASG can stall and refuse to pay its bill effectively forcing the semi-autonomous company to pass such costs along to the rest of its customers.

The reason government is not any good at running business is because it doesn’t have to play by the same rules as business. No business could do what the ASG has done with its two step-children noted above.

So here are some suggestions to improve the Governor’s proposal. 1) Hold the Governor, all sponsoring legislators and all private parties involved liable for the $5 million of taxpayer money. 2) The ASG cannot bail out the operation should it become a failure; if it fails, it fails, and the ASG cannot leave taxpayers holding the bag again and again.

Those two items alone will make his plan more market-driven and responsible as liability and failure for the parties involved are on the table.

Nevertheless, the Governor is right that lawmakers should offer an alternative. That alternative should be an agenda that incrementally reforms government in ways that lead the ASG to protect and respect private property rights, enforce contracts, level the playing field in terms of paying for needed government services, lower the costs of those services and reduce its bureaucratic burden and red tape.

That is an agenda that supports freedom, and history has demonstrated that freedom and prosperity go hand in hand. Now that is something that’s definitely not an excuse.

The Market Will Determine Aspire's Fate

2010-01-09T11:28:00.001-10:00

Talifaitasi W. Satele

Despite the strongly held beliefs of either supporters or opponents of the ASPIRE legislation, it will be the marketplace that ultimately determines whether it is a success or a failure.

The market is made up of people (both consumers and producers) who don’t respond to elaborate speeches or emotional arguments. They react to their own self-interests whether that be low costs, high profits or some other value they treasure more than the before-mentioned two.

In absence of ASPIRE, the market has determined the price of tuna. On the consumer side, that price is determined by a number of things: household budgets, the price of substitutes and complements, and market trends. From the maximum price that producers can trade their product comes the various forms of its economical costs: profit (which is called opportunity cost), labor cost and capital cost.

To use the force of government, as ASPIRE clearly does in its elaborate scheme of incentives and penalties, to fashion several portions of the tuna market will have effects on the others. Whether those effects end up being beneficial to the people or not is for the market itself to decide.

If this legislation increases cost, that cost has to be paid by someone: either the consumer or the producer. If the consumer faces a higher cost, he may choose to consume a different product (e.g. corned beef instead of tuna). Fewer consumers mean fewer cans of tuna to produce which means fewer jobs. If the producer faces a higher cost, he may choose to do something else or he may not be able to attract or even retain shareholders/investors as his profits dwindle. Fewer producers or investors means less capital which means fewer jobs.

Besides cost, let’s consider whether even reducing our catch of tuna is a worthy goal. Achieving that goal will not happen in a vacuum. Fewer fish being caught will lead to less supply, which leads to higher costs which leads to fewer jobs.

ASPIRE is supposed to be about “jobs, jobs, jobs”. The market, if it could speak, may testify that this legislation does the exact opposite.

The AG Is No Economist

2009-12-23T20:02:00.000-10:00

Talifaitasi W. Satele

Assistant Attorney General Kornegay says that “the raising of these prices for necessities harms the people of American Samoa and its economy”. He argues that his statement is a “fact”. However, Jerry Taylor and Peter Van Doren of the Cato Institute argue in their essay, Let ’Em Gouge: A Defense of Price Gouging, that “price gouging — like spinach — may be unappealing at first bite but it’s good for everyone in the long run”.

Obviously, there are economists who would beg to differ with Mr. Kornegay.

However, my concern is less about the economics of it all and more about the lack of recognition by our government that these storeowners have done nothing wrong. Their alleged crime: ask for a higher price for their property, their merchandise after a natural disaster.

If we are all free men, then we assume that everyone’s rights are respected and protected by the government and that we only trade with one another on a voluntary basis. That basis then is our own self-interest with the seller seeking the highest price possible and the buyer shooting for the lowest. Where the two meet in the middle is a voluntary transaction between two free individuals, a.k.a the market price.

It should be no more a crime for a storeowner to be able to charge a million bucks for something after a natural disaster than it is for customers to get discounted prices, or even for free, from a storeowner who’s going out of business. Yet when the entrepreneur goes out of business and has to get rid of his inventory to discontinue his overhead costs, no one sheds a tear for him as his customers walk away with dead giveaways.

Is it because there are less storeowners than there are shoppers (meaning voters) that his predicament is of less concern to our majority-rule government and grandstanding politicians? Are his rights worth less because his vote won’t help win an election?

None of us have a right to our property when the government can dictate the price at which we can sell it. And government doesn’t fulfill its role of protecting our right to private property when its own law doesn’t even respect the very idea of it.

Mr. Taylor and Mr. Van Doren go on to say that “gouging… sets off an economic chain reaction that ultimately remedies the shortages that led to the gouging in the first place”. While protecting our right to price our own property (regardless of the circumstances) helps more than harms our economy, it is absolutely necessary for a free society to exist.

Let’s Prosecute The Thieves Of The Tsunami

2009-11-10T18:59:00.001-10:00

Talifaitasi W. Satele

I’ve always been disturbed by the attitudes of government officials who pick on private citizens, businesses and non-profit organizations. They fancy their persecutions as courageous acts of bravery, fighting against invincible villains from whom the public have no protection. What a joke!

Take for example the Attorney General Office’s pledge to prosecute violators of Governor Togiola’s price-gouging law. Is it so courageous to threaten people whose licenses (their very means of living) you can revoke if they don’t do as you say? If the AG’s Office had some real balls, they’d focus 100% of their efforts and resources into prosecuting the real gougers of the tsunami’s aftermath: the thieves who ransacked people’s and businesses’ property in our greatest hour of vulnerability.

That would take real courage right there. Instead of doing what government is supposed to be doing (which is protecting our lives and property), what is the ASG doing now? Picking a fight with the Pago Pago Yacht Club. What cowards.

You know, one of the most important lessons I’ve learned growing up back home is that thugs only respect other thugs. They only pick on people they don’t expect to push back. That’s why the thieves of the tsunami will get away with their crimes while innocent people who live at the mercy of the ASG will continue to suffer under the thumbs of bullies.

The Black Sheep

2009-10-31T12:52:00.000-10:00

Talifaitasi W. Satele

With all due respect to the Governor, sometimes doing nothing is actually better than doing anything at all. In situations such as purchasing the COS facility, I am constantly reminded of one of my mentor’s favorite newspaper cartoons. It depicts a lone black sheep running away from a towering cliff while the rest of the flock blindly follow one another right over it.

Fortunately, in our particular situation, legislators are asking the tough questions that need to be asked instead of going right along as usual.

However, my main concern is not particularly the proposal itself. It’s how Governor Togiola is going about it and how it reflects on how he’s been doing business lately. After making enemies out of anyone who dared to oppose his agenda in the first few years of taking office as governor, Togiola changed his strategy and made them all his “friends”.

There is nothing wrong with that. It’s the “big tent” philosophy. You know, keep your friends close and your enemies closer sort of deal.

But you start running into problems when you expect everyone just to fall in line. That’s a rare occurrence in a home with a family of more than two— let alone a “big tent” full of different interests and agendas.

But this administration seems to expect and assume broad support for anything it chooses to do. That sort of arrogance led the administration to deem it not necessary to get the Fono’s approval before expending funds on a number of items this year.

Assumption of approval replaced actual approval in that case, and that is wrong.

Otherwise, why have a Fono at all? Just assume that a make-believe legislature representing a make-believe people authorized you to spend their real life money.

And who cares if the court orders the ASG to do something; the power of the purse lies with the legislature, not the treasurer. It’s the Fono’s responsibility to address such mandates. The Fono cannot be an equal branch of government unless the other two, let alone its own legislators, treat it that way.

But getting back to his proposal, the Governor is the salesperson in this situation and the Fono (and the people) are the investors. In the free market, you persuade people to risk their own money in backing your plan; you can’t order them to do so.

The Governor has to spend more time convincing us why his proposal is, at the very least, better than doing nothing at all, and not expect us just to follow him over what seems to be a very big cliff.

In that newspaper cartoon, the only thing the black sheep says is, “excuse me, excuse me”, as he makes his way through an unsuspecting crowd. I am very proud that, in this case, our legislators are saying more than that!

Lessons Forgotten

2009-10-26T20:19:00.002-10:00

Talifaitasi W. Satele

Governor Togiola has said that the profit motive will not run the new ASG Cannery. So does he expect this company to operate at a loss or barely break even? If this new government entity does not generate revenues above expenses, then taxpayers will be throwing their money down a bottomless pit.

And I don’t believe anyone around here is so naïve as to believe that government officials or workers don’t have a profit motive of their own. If they didn’t, then we could rest assured that ASG employees all worked for free! That is simply not the case.

Nevertheless, the profit motive in government just doesn’t work like it does in the free market. For one, there isn’t the same level of responsibility in government as there is in the marketplace. That’s because the money the ASG will use is not Governor Togiola’s or Mr. Sanchez’s. Whether this venture succeeds or fails, no one here will be held financially liable, and that fact alone makes their decision making process a lot less reliable than someone who has a personal stake in a gamble of this nature and magnitude.

Second, the profit motive in a free market depends on having a very satisfied customer. That’s because the customer is your only source of revenue, and on top of that, he is free to go to your competitor. Government, on the other hand, can continue to tap taxpayers as a source of revenue whether the customer is satisfied or not. Or whether they do the job right or not, or the market is up or down, or they advertise sufficiently or not, and so on and so forth.

We can go all day making the case why ASG involvement in the cannery business is certainly doomed for failure. Is it not enough to take a overall look at the government as a whole and see where and how this thing is going to end up?

But how can anyone blame Governor Togiola for taking such drastic measures? After all, this is what the majority expects a governor to do, and that’s to do something, rather than nothing, especially at a time like this! Our expectations of his office empower him to take almost any measure necessary lest his constituents judge him for not having enough compassion for those who are about to lose their jobs.

However, a popular idiom reminds us that the road to hell is paved with good intentions. In actually using the government to do something to remedy the situation, we only make matters worse.

In times of extreme shakeup of an economy, conservatives-libertarians point to three ideas for policy guidance. They are benevolent ignorance, creative destruction, and believe it or not, having faith. Benevolent ignorance means government ignores a problem so that private actors can more appropriately and efficiently address the situation. Creative destruction refers to the fact that sometimes something has to be destroyed in order for something else to be created and take its place. And having faith means just that: having faith that it will all work out. These are lessons already learnt but easily forgotten; especially for those with little faith indeed.

Defending the Constitution

2009-09-20T12:59:00.002-10:00

Talifaitasi W. Satele

Originally, the US Constitution did not include a Bill of Rights. Federalists argued that since the Constitution didn’t give the government power to infringe on our inherent rights, like Free Speech, we didn’t need those 10 amendments explicitly protecting them. It was a naïve assumption to say the least.

Terrance Jeffrey, a reporter for Human Events, asked former Education Secretary Margaret Spellings, in an interview a couple years back if she could “point to language in the Constitution that authorized the federal government to have a Department of Education.” Her reply: “I can’t point to it one way or the other. I’m not a constitutional scholar, but I’ll look into it for you, Terry.”

She never got back to Mr. Jeffrey because the Constitution doesn’t authorize a DOE.

Supporters of the Bill of Rights did not buy the Federalists’ argument that government would restrain itself to the limits of its contract with the People. They knew better. They knew that the Constitution had to explicitly restrict government from infringing on our individual rights; otherwise, it eventually would.

But what makes the Bill of Rights so effective is that people go up in arms defending them. We will never see Congress ban Free Speech or the Freedom of Religion or the Right to Bear Arms. They can try, but Americans stand up for themselves, and it would be a cold day in hell before any of that stuff happens!

The point being is that no one pays attention to the Constitution unless someone stands up for it and defends it. Sadly, the ASG makes that point all too clear with its budget appropriations (spend first, ask later).

Luckily, we have a few heroes in the Fono who are working to change that. Hopefully, one day, we will have a Fono and a government we can all be proud of.

False Altruism

2009-09-18T20:27:00.004-10:00

Talifaitasi W. Satele

We should be wary of folks who preach that we should live our lives in service of others. I say that because they usually don’t practice what they preach. Syracuse University professor Arthur Brooks notes in his book, “Who Really Cares”, that “people who believe it’s the government’s job to make incomes more equal, are far less likely to give their money away” to charities.

Not only do altruists not follow their own ideology to a tee, their rhetoric is often inconsistent. Some try to pass themselves off as advocates of the least fortunate amongst God’s Children, but they won’t extend that same compassion to their brother if he is branded an illegal immigrant. Nor if their brother is of a different race or of a certain income level.

Moreover, altruists contribute almost nothing to the actual welfare of the people they claim to want to help. Most supporters of the minimum wage, for example, don’t provide jobs to anybody nor could they show us how to provide living wages to our people. And some of altruists’ ideas actually harm the general welfare such as price controls or trade restrictions.

All altruism does is provide rhetoric for those who want to sound like they care when they really don’t. So until an altruist provides public access to his own private home, we should take his philosophy with a grain of salt.

Plastic Saves Lives

2009-08-26T18:57:00.000-10:00

Talifaitasi W. Satele

Have you ever seen that commercial where the setting is in a hospital, and everything made of plastic starts disappearing? The I.V. bags, X-Ray Photos, the bedding patients lie on, etc. After all things plastic have disappeared, the hospital room is bare metal and wood; not a pretty sight at all, especially if you’re an institution charged with saving people’s lives.

As Mr. Kneubuhl acknowledges in his guest editorial dated 8/19/2009, “The Pago Pago Jellyfish”, everything we consume involves the use of plastic in one form or another. Most of our foods are packaged with and preserved by the material. Why? Because plastic’s attributes make that possible.

If another material could do what plastic does at a cheaper price, we would be using it. We use plastic because it’s cheap, very durable and very convenient, and any realistic alternative would have to surpass those qualities if it has any chance of serving as a replacement in the free market.

Nevertheless, it is plastic’s greatest strength (durability) that serves as its greatest weakness in the eyes of the public. It’s not biodegradable (if it were, we wouldn’t be using it the way we do) and it sticks around long enough to cause an eyesore. But that shouldn’t serve as reason to dismiss this product’s blessings, but rather as a point of focus for its proper disposal.

And one can glean as much from the comments on Mr. Kneubuhl’s guest editorial on Samoa News’ website. And I believe Mark would agree with me that as far as plastic being an inherent danger to its human consumers’ health, the science is not settled yet.

But as far as the plastic bag ban being that gentle “prodding” the Chamber of Commerce believes businesses need to do what they think is right, let’s remember how gentle the container inspections at the loading docks were, or the Governor’s ban on 10 year old import vehicles. The first was a boondoggle failure and the latter caused mass confusion with residents (especially for Military Veterans returning home) losing time, money and assets.

Pollution is a problem that involves more than just plastic bags, and their outright ban may have costs that far outweigh the benefits.

Standing With Senator Velega

2009-08-17T17:59:00.000-10:00

Talifaitasi W. Satele

What an honor it must have been to stand up as one of the two shepherds who tried their best to protect their flock from a chamber full of wolves. It is not easy to do what is right, especially when the rest of your peers take the easy way out. Yet there he was standing alone; a situation in which righteous men often find themselves.

But I would like the Senator to know that he is not alone in voting “no” to the $200K bill to fund the Heritage Week in Hawaii. He has a whole island of constituents in his corner as they too have never consented to that expenditure— since none of their representatives or senators voted to approve the bill before the money got spent.

The Senator should remind his colleagues that the Constitution serves a contract between the People and the Government. Government derives its powers from the People through the terms outlined in the Constitution. For Government not to discharge its duties in accordance with the terms of the Constitution constitutes a breach of its contract with the People.

If Government continues to function without regard to the Constitution, then the People are no longer its masters. Government becomes a power onto itself, and that sets a very dangerous precedent.

Legislators always talk about protecting the integrity of one of our most important institutions in our system of checks and balances. But when they had that very chance to stand up to do so, they decided it was best to remain seated.

Drawing the Line

2009-08-06T01:13:00.000-10:00

Talifaitasi W. Satele

The Private Sector and the ASG may have a nice, cozy relationship going on with its partnership together on the minimum wage petition, but that will soon come to an end.

For one, Congress will never delay the next increase in the minimum wage law lest they be made out to be a bunch of hypocrites by Republicans and liberals alike in the national media.

Two, the devastating effects of an increase in labor costs based on nothing other than Congress’ preconceived notions of social justice will force the ASG to choose between either upsetting its own work force (for cutting personnel costs) or its new found friend (for raising taxes on them to pay for its personnel costs).

As California and many other states have figured out the hard way, government is no creator of wealth. If government did create wealth, it could tax itself on the way to a balanced budget!

But the truth of the matter is that it is the Private Sector that creates wealth and the new revenues governments have had the pleasure of redistributing. So what many states have had to decide during this recession is either to raise taxes, cut spending or both.

Right now, the ASG is positioning itself to raise taxes with its un-prioritized spending. $200K for a Heritage week in Hawaii and trips to Washington D.C. to hand deliver the minimum wage petition do not put the ASG in a fiscally responsible position at a time when COS departure will mean a substantial loss amount of taxes to fund the government. And the Private Sector has said virtually nothing in the way of constructive criticism of the government’s reckless spending habits.

If private citizens don’t draw the line somewhere sometime soon, it will be that much more difficult to complain when the ASG comes knocking on the door after running up the tab.

Real Advocates of the Poor

2009-07-21T17:13:00.000-10:00

Talifaitasi W. Satele

I could understand Common Cause’s position in support of the minimum wage law, if it were not causing jobs to disappear. Downsizing (in terms of personnel and benefits) actually started soon after the federal government forced this law upon us and well before the recession began to take its hold over the global economy. To say this law is not a significant reason for the COS’ departure is either dishonest and/or ignorant of everything that has been happening so far.

And clearly the canneries were the targets of the minimum wage law. But now with one to close in September and the other with one foot out the door, it would be those businesses still remaining that will have to comply with this law. And does anyone really expect these small businesses, these mom and pop stores, to pay the minimum wage, especially after the canneries’ departure?

Thousands of our low wage workers may be “aliens”, but you won’t know how good you had it until they’re gone. People complain about foreigners sucking up all of our precious limited resources, taking up all the jobs, owning all the businesses and crowding our schools and dysfunctional hospital, but wait until the streets are empty and life on Tutuila starts to look and feel like it is in Manu’a.

And while Tutuila starts to become an ever increasingly isolated island, watch the cost of living go up, not down. I have an uncle who travels to American Samoa every now and then, and he talks about the horrors of the rental rates for cars back home. Of course, it’s because he’s comparing them to rental rates here in Hawaii, and I have to remind him that car rental shops are dime a dozen over here.

If he thinks car rental rates back home are bad now, wait until after September.

It used to be that supporting the minimum wage law meant supporting the poor and the least fortunate amongst us. With the way things are going now, that is clearly no longer the case.

Slave Wages?

2009-07-14T17:38:00.000-10:00

Talifaitasi W. Satele

To compare people who work at low wages to slaves does a great disservice to those who actually live or have lived in real slavery.

A real slave doesn’t get paid anything; he or she is forcibly taken against their own will, beaten and threaten with death if they don’t do as they’re told. Slavery is a real, sad and unfortunate crime committed against individuals to this very day, and no one should make a joke of the term by using it to describe what people working at the canneries are going through.

If anyone is close to being slaves around here, they are businesses. They are being forced to pay wages on a notion other than profit-maximization. That notion is simply the law. And in what ways are businesses compensated by the government for making these payments? None. Right now, businesses are paying for a government welfare program without even a word of thanks!

Slavery is a condition where one is subjected to another. Offering low wages to someone to perform a job doesn’t fall into that category. Wages, high or low, are offered to free men not slaves.

The Spirit of Optimism

2009-06-29T17:17:00.001-10:00

Talifaitasi W. Satele

A close relative once gave me his perspective of what it means to be the cook for one’s family or village. He said that even if you slaved all day preparing food for the President of the United States, it is the cook, not the President, who gets to eat first. After all, someone has to taste the food before it gets served.

His point of view reminded me of something very unique about the Samoan Culture. Those who practice our culture always seem to have the trait to make lemonade out of lemons. I sometimes want to call it arrogance, but it’s more a combination of unrelenting pride, appreciation of life and a strong dose of optimism.

With the canneries closing, I think we’re missing that sort of inspiration from our leaders. All I hear from the top are numbers and models and mystical multipliers that, even as a self-proclaimed economist, I’m left rather uninspired by anything the ASG or the Congressman has had to offer in the way of solutions so far.

Our leaders are always quick to suggest that we return to our roots when it comes to our economic way of life (which is unrealistic). I very respectfully suggest to our leaders to return to that Samoan spirit of optimism that our people need in these very difficult times.

The departure of COS could either be an opportunity or a loss. Like they say, the choice is ours to make.

The Freemarket Solution

2009-05-30T06:18:00.002-10:00

Talifaitasi W. Satele

Whenever the ASG attends those DOI sponsored business conferences, I always wonder what the attendees think of our officials’ statements about how welcoming our great territory is to investors.

With just a little research, they could find out for themselves that if they don’t pay enough in wages or benefits (like unemployment or health insurance), they’ll be attacked for corporate greed and mismanagement.

If they happen to be the only game in town, they’ll be attacked for establishing a monopoly. And if they stick around long enough, they are bound to become some politician’s target for a new “revenue” measure.

Instead of rolling out a welcome mat, the ASG puts out a blatant warning sign to potential businesses with all its policies and rhetoric, and it reads: Run like hell! And like the old saying goes, actions speak louder than all the flattering words our officials could ever say at any business conference.

Why not reform our tax system to level the playing field and tie taxes to the services one receives? That way there is a sense of fairness and the idea that one doesn’t pay something for nothing.

Why not resolve to not dictate to businesses what they should pay in wages or benefits, and leave the matter between employers and employees (with collective bargaining if need be)?

Why not put up for sale assets that should clearly be in private hands (ASPA, ASTCA, KVZK-TV, DBAS and LBJ) and get the government out of the business of competing with the private sector?

And there are plenty of other unresolved matters that we need work on. We need relief from Cabotage laws to free up the airline market. We definitely need relief from the federal minimum wage law. We don’t just need the increases stopped; we need to have the law rolled back!

The free market solution simply asks for relief from government intervention. Mind you that while it is a simple request, it won’t be easy for our politicians to discard their policies unless they believe that the private sector (meaning the people) can succeed as well as achieve the ends (higher wages or benefits) for which their policies were founded.

Above all, the free market solution asks that the people believe in themselves and their fellow citizens. That belief alone should be the engine upon which we rebuild our economy.

It's All A Guess

2009-05-11T18:07:00.002-10:00

Talifaitasi W. Satele

Businesses need to defend their decisions and not cede public opinion to the politicians or even to pundits, like myself. But seeing that Chicken of the Sea (COS) doesn’t want to justify how its bottom line is better off in Georgia than it is in American Samoa, then I guess someone has to speculate on their behalf.

I’m guessing that paying 200 workers $7.25/hr in Georgia is better than employing 2,172 of our people at $4.76/hr in American Samoa. That actually amounts to $8888.72 of instant savings in labor costs per hour, and that will especially be true if COS can employ less workers to do the same amount and quality of work in Georgia as it does now in the territory.

I’m guessing COS will be able to employ fewer workers to do the same job by investing in more capital (newer technology, methods and machines). It’s textbook economics that as labor costs go up, businesses have the incentive to substitute labor with machines. But as any accountant can tell you, the danger in doing that is that you increase your fixed costs relative to your variable costs. When things go south, you can’t fire machines; you still have to pay for them day in and day out.

I’m also guessing that the relocation to Lyons has a lot to do with its proximity to Atlanta , which is the transportation hub of the South East. Three interstate highways converge in Atlanta , and even Mexican drug cartels have relocated there to take advantage of the infrastructure. So instead of producing in American Samoa and shipping product via sea transportation, they’ll make it and transport it right there in its main marketplace.

I’m guessing there are whole bunch of other reasons that makes COS move more profitable than staying, but I’m not privy to any inside information. Is the minimum wage the sole reason they’re leaving? No. But it sure as hell didn’t help any.

The canneries may not have paid our people what many think are “fair” wages, but do they even get credit for all the indirect benefits they provided our great territory? Interest rates for auto loans are now going up; do the canneries get credit for unintentionally helping to keep them low while they were here?

How about the economies of scale they’ve helped with in transportation costs and electricity or all the supporting businesses that make money from them? Seems to me that the choice is either “fair” wages or nothing, which is not much of a choice at all.

I don’t care whose theory of economics this whole fiasco fits in. The fact is that we have 2000+ workers soon to be out of work, and we’ll trade $22-23 million of paid work for a $20 million welfare check from Uncle Sam (and that’s a Big IF). Our leaders must do something and do something quick.

But Faleomavaega’s rhetoric so far is not helping any. Any potential businesses or investors looking at American Samoa are probably reading his press statements and saying to themselves, “This is how I’m going to be attacked if I open up shop. Best not open up at all.”

How the government plans to attract businesses other than providing for a free market is anyone’s guess at this point.

Force: A Governing Philosophy

2009-04-19T18:03:00.000-10:00

Talifaitasi W. Satele

I’m very thankful for Mr. Slater’s letter written in response to my diatribe on the House ban on petroleum-based plastic shopping bags. His commentary was less a defense of the House bill than it was an explanation of his beliefs about the role of government, and I’d like to respond as such.

I agree that government should “promote the common good”. It’s even in our Constitution under slightly different terms: To Promote The General Welfare. Actually, I believe the legislature can “promote” anything it wants, but to “force” or “legislate” or “guarantee” goes beyond mere “promotion” and requires the use of the state’s police powers.

That line between promotion and the use of force is a very thin one. There’s a lot of things government would love to promote like lower prices for food, gas, and airline tickets. Government would like for all of us to be in tip-top physical shape and eat only vegetables for breakfast, lunch and dinner. Officials would love for us to quit smoking, stop drinking beer and be in bed by 10 o’clock every night. All in the name of the common good of course.

Do not the above causes deserve the use of government force? Is the criteria for determining what are just causes whether they’re too controversial or not?

That sort of criteria is simply called majority rule, and everyone agrees with the majority as long as they’re in the majority. So it begs the question: Where does the majority’s view of what is good for the rest of us end and the rights of the individual begin?

The two concepts are incompatible; on any issue, either majority rule or the sovereignty of the individual triumphs.

But I do not believe that the majority of what the majority “wants” is incompatible with the rights of the individual. Things like a cleaner environment can be addressed while protecting our individual rights to life, liberty and private property.

But the Fono or the ASG doesn’t take that approach. Whatever it wants to do, it just decides to muscle its will with a ban on this and a ban on that. It is that view I will always take issue with, because once that line is crossed, it fast becomes the governing philosophy.

The Ban On Plastic Bags Is A Farce

2009-04-13T18:34:00.001-10:00

Talifaitasi W. Satele

The House bill to ban plastic shopping bags is a farce as it will do little to protect our environment. After all, plastic shopping bags are not the only things flowing down our streams and choking our oceans. There are also diapers, cans, bottles, cardboard boxes… you name it, it’s there! Is the Chamber of Commerce going to ask the Fono to ban those items as well?

Free marketers always point to property rights as the means of effective environmental protection. People have the incentive to protect and maintain property from which they individually benefit and bear responsibility. And if government owns property, then it should enforce existing laws that protect it before going off on endless environmental crusades.

But I, for one, actually want to see this ban put into practice.

If biodegradable bags are “generally cheaper” than petroleum-based plastic bags as Mr. Robinson claims, then we wouldn’t need this ban to make the switch. We’d do it ourselves in the marketplace. And even if they were a cheaper alternative, I doubt these “environmental” bags are as convenient as their plastic counterparts are to us customers.

An attempt to force businesses and consumers to use something that’s most likely more expensive and less convenient is likely to cause a popular backlash. If that happens, it’d be interesting to see how many House members retain their seats after unanimously imposing something of this nature on their own constituents.

It Better Work

2009-04-02T17:48:00.001-10:00

Talifaitasi W. Satele

Over the last few months, I’ve been in utter shock at how fast America has turned away from capitalism. Everything President Obama and Democrats (and some Republicans) have proposed and enacted has been done in the name of saving the economy.

While their policies go against everything I observe to be true, deep down inside, I am hoping…no, praying, that it all works out. Like you, I have a family to feed, bills to pay, and a future to fulfill.

But these big government policies are doomed to fail. For what ails the economy cannot be cured but through its sickness. The economy cannot gain until it has realized what it has lost. In other words, we have to allow those who made the wrong choices to suffer the consequences before we can even begin to think we could prosper once again.

And it’s not that those wrong choices imply the people who made them are bad or evil; it’s just that those choices didn’t work out.

Homeowners across the country were in a rush to sap the equity out of their homes, because loans were then easy to make. No documentation required. No proof of income. Credit scores were not even relevant. All in the name of some social-economic mission.

But in the end, someone has to pay the bill. No matter how a loan was structured, when the lender didn’t receive from the borrower what he expected from his investment, there was a loss realized in the market. Someone had to pay for that loss. It was either the person who did the lending or the person who borrowed.

The only way we could have avoided this crisis was for borrowers to pay their loans as expected. But how could borrowers pay their loans in a economy that was fueled by those loans?

It’s like watching a dog chase its own tail.

And every policy from the stimulus package to every single bank bailout has been done in a futile attempt to trick the market into believing a price doesn’t have to be paid. It’s as if prosperity were only a matter of borrowing or printing money.

It’s that type of mentality that makes me sick.

When I eat rice, I think about the farmer who planted it; I think about the guy who packaged it; the person who shipped it over; and the entrepreneur who took the risk to inventory it; and then sell it to me. Then I remember that nothing in this world is free.

Yet all these big government policies from the federal government say otherwise.

All I have to say is that, in the end, it better work!

Thanks But No Thanks

2009-03-17T21:00:00.000-10:00

Talifaitasi W. Satele

It’s a shame that the Fono is looking to allocate money from the ASG’s $20 million loan to buy each District Governor a vehicle.

With all the fuss over ASG pay raises and fears of a further downturn in the economy, one would think that a sham of this nature would be the last thing on the Fono’s agenda.

Senator Utu Abe Malae said earlier this year that the loans made by the Retirement Fund to the ASG were a “great investment” compared to the stock market. But how are vehicles for our District Governors a “great investment” for the Retirement Fund? Or any of the projects funded by the ASG $20 million loan for that matter?

The stock market may be in a nosedive, but at least stock prices eventually reflect all the bad investments, mismanagement, fraud, waste and abuse made in the marketplace. Is there any stock price by which we can judge whether this “great investment” in the ASG is worth anything to us today, tomorrow, or for the life of this loan?

Taxpayers are continually taken for a ride in American Samoa except that they don’t get their own personal limousine to pick them up.

I hope our District Governors do right by their constituents and say to the Fono when they try to allocate them each a vehicle, “Thanks, but No Thanks”

Privatize the Print Shop

2009-02-03T22:40:00.000-10:00

Talifaitasi Satele

If the ASG plans to follow other local governments in the U.S., like Chicago, Illinois or Sandy Springs, Atlanta, in shoring up their budgets by privatizing certain governmental functions, they can start with the ASG Print Shop. If print production in the ASG is anything like its business licensing process, then we should all pray that the next storm does more than just flood the Print Shop building.

The fundamental idea behind outsourcing a function is whether doing so would be cheaper or be of more value than keeping it in house. ASPA based its justification for bringing its trash collection services back in house on its findings that it would save its customers money. But it seems the Fono is being asked to mandate all ASG printing to be done at the Print Shop in an effort to save jobs or maintain that department’s relevance.

Whether it comes to privatization, outsourcing or free trade for that matter, it should never be about saving jobs. It’s whether the customer (in this case, the ASG) has the freedom to choose where to best spend his money. Economically speaking, that often means the cheapest price or the best quality possible.

Seeing that it takes a million years for the ASG to get anything done, we shouldn’t be too hopeful that it will privatize anything anytime soon. But in the case of the Print Shop, the best way for the ASG to privatize that department is to continue to do what it has always done best:

Nothing.

My One Complaint About 'Atlas Shrugged'

2009-02-01T20:47:00.001-10:00

Stuart K. Hayashi

Writing this post has become an annual tradition for me. February 2, 2009, marks 104 years to the day of Ayn Rand's birth. Of course, the culture of the 48 contiguous United States associates the date of February 2 with yet another tradition. It is said that, on this day, if a politician crawls out of his hole -- and sees his shadow -- then we will have sixty more years of federal farm subsidies.

As for Miss Rand's magnum opus, I enjoyed every syllable on each of the 1,084 pages of the 1985 paperback edition I read. The prose sparked vivid images that made me feel as if I were gazing upon an exquisite painting.

I was so enthralled by the grandeur of it all that I was quite sad to finish it. It was as if I were a small child again, and summer was coming to an end, and I was parting with a dear friend and playmate whom I would not be able to see again for the rest of the year.

And so I have only one complaint about Atlas Shrugged:

It was too short. :'-)

Immigration Control Through Private Contracts

2009-01-27T21:54:00.000-10:00

Talifaitasi Satele

The public should be weary of a governmental approach to immigration. The ASG is slow, unfair in its application of current laws and unresponsive to the needs of the private sector. It’s just the nature of a one-size-fits-all approach, which is nearly impossible to do; otherwise, the current immigration law wouldn’t have loopholes in it in the first place.

Samoan landowners should take the issue of immigration upon themselves through the terms of the leases they have with foreign business owners. Samoan property owners can negotiate the terms by which they lease their property for others to do business. It is their property, thus it is their right.

A potential problem may be that many of our people may be unfamiliar with constructing proper contracts; perhaps the Fono can instruct the AG’s office to provide free legal counsel in that area.

Nevertheless, this approach has several benefits:

1. Reaffirms that Samoans own their land, not the Fono or the ASG or foreign businesses.

2. Invites more of our people to learn how to create contracts to their benefit.

3. The private sector can meet its needs through negotiations with landowners versus one entity, the ASG.

4. The Fono can influence public opinion and action on the issue without having to violate private property rights or meddle in businesses’ day-to-day affairs.

The idea of having the ASG fix immigration always seems to get us nowhere. We need a new approach, and hopefully, this time that is to put it in the hands of individual Samoan landowners whose decisions will collectively decide how we move forward together into the future.

Everyone's a King

2009-01-20T20:22:00.000-10:00

Talifaitasi Satele

A colleague of mine informed me that the late Malietoa Tanumafili II once said that in Samoa, everyone is a king. I think that the former Head of State of Independent Samoa almost got that right. That’s because if everyone is a king, then no one really is.

I believe every man is king of himself and his property, and he is not a subject of another man or of a majority of men. If every man is a king in that respect, I believe Malietoa would have been even more correct to say that in Samoa, every man is free.

God bless America and American Samoa!

Credit Expansion

2008-12-30T20:33:00.001-10:00

Talifaitasi W. Satele

Some say that credit through fractional reserve banking is a result of “greed”. Many liken anything to do with making money to that ugly term; I just commend it as a good idea. But lending out depositors’ savings while only keeping a fraction of deposits in reserves is not done out of philanthropy. It is to make money or profit, and lending credit is not only beneficial for the banker but the depositor and borrower as well.

If banks didn’t make money through lending, they would have to charge their depositors additional fees. Banks do have to pay for the overhead it takes to secure their depositors’ money. But instead of having their customers pay more in fees for the privilege of having their money in a secure vault (instead of under one's mattress), the bank makes your money work to pay its rent.

And let’s hope banks are profitable while they lend! Profit attracts new entrepreneurs into the market (which means more banks to choose from) and determines whether someone stays in business or not. Economists call profit an opportunity cost, which is the value of the best alternative use of a resource. For example, if you profit only $20,000 from your business, but can make a salary of $25,000 working for the government, would you stay in the market or go to work for the ASG?

For borrowers, getting a loan often means having the funds necessary to seize upon an opportunity that they just didn’t have money at the time to pursue. You take out a loan at the prevailing market rate betting that you’ll make more than principal plus the interest later on. From big and small businesses to homeowners, they are all betting on future success.

Banks, on the other hand, set the interest rates by the level of risk, competition, and the amount of profit they’re seeking. They measure risk by level of income, payment history (credit score), and length of employment of new applicants. Banks too are betting on their borrowers’ future success, and they lend accordingly.

Credit, made possible through fractional reserve banking, allows banks to make a profit, pays to secure depositors’ savings, and provides funds for the economy to expand.

It’s a system that serves the purposes of the banker, the depositor, and the borrower, and it is beneficial to all as long as the bets made are good ones.

Otherwise, like a bubble, it pops.

Who Will Mow My Lawn?

2008-12-02T21:58:00.000-10:00

Talifaitasi Satele

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.

Who is the Fono Kidding?

2008-11-24T23:29:00.002-10:00

Talifaitasi Satele

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.

Smoking Responsibly

2008-11-12T07:24:00.002-10:00

Talifaitasi Satele

The Samoa News Editor notes that second-hand smoking is an invasion of our individual rights when permission is not asked or given, and I couldn't agree more. However, by coming onto private property where the owner allows smoking, you are implying permission. If you don’t agree with the owner’s decision, you can always go some place else.

The above shows how the free market regulates the risks of second-hand smoking. It puts individuals in charge and responsible of their own lives and property. But let’s take a look at the path the Fono wants to take us by banning smoking through the force of law.

We would have the Fono tell us how and where to establish designated smoking areas. If businesses and individuals violate the law, fellow citizens may report violations to the authorities. Alleged violators then would be imposed with a fine, or they may have to challenge such allegations with the Commerce Commission or the courts.

What we would have in the likely scenario above are situations that pit neighbor against neighbor, challenging one’s trust and faith in his fellow man. It would give rise to needless suspicion and animosity. It would also cost us money with the imposition of fines, and the expending of government resources such as the police, Commerce Commission and the courts in order to enforce this ban.

The real crime here is how this ban would divert our government's attention from protecting the public from real criminals to suppressing second-hand smoking on private property.

Ernest Alaimalo wrote in his Letter to the Editor, Tabacco Smoking, A Risk Worth Taking?, that he “can think of better ways of spending” his “healthcare dollars than helping someone whose cancer is due to his exercising his right to smoke”. I feel the same way with someone who eats too many McDonald’s quarter pounders or drinks way too many Vailimas. But what we have in American Samoa is Socialized Medicine where everyone pays for everyone else’s mistakes in life.

Whether it is smoking or eating a greasy, artery-plugging McDonald double cheeseburger, we should be forever mindful that with freedom comes great responsibility.

Let's Just Ban Life

2008-11-03T07:10:00.001-10:00

Talifaitasi Satele

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.

Veto the Smoking Ban

2008-10-24T06:38:00.002-10:00

Talifaitasi Satele

I ask Governor Togiola to please veto the Fono’s bill that will dictate to private businesses on how to address the risks posed by second-hand smoke should it become law. The risks of smoking, like that of bungee jumping or eating a high cholesterol cheeseburger, are well within the control of every individual who may engage in such a risky activity.

The owner can choose not to have smoking on his property or designate a smoking area outside; the employee can choose to work where smoking is prohibited; and, the consumer can choose to socialize where the owner of the property doesn’t allow smoking. The important word here is “choose”, and in the case of smoking on private property, it is clear everyone has a choice.

This doesn’t warrant government intervention, and it is a clear violation of our private property rights. Should the ASG succeed in dictating to businesses on how to control smoking on their own property, then we shouldn’t complain when the Fono finds it necessary to intrude into our very homes on such a matter.

And what of other behaviors where we take risks on daily basis? Sex, eating fatty foods, swimming, climbing coconut trees, playing sports, etc.? Do they fall within the purview of the Fono as well? Is this the proper role of government?

The answer is no, and the governor should lead the Fono in addressing the dangers of smoking without having to violate our individual rights.

Fractional Reserves, Fiat Money and the Federal Reserve

2008-10-19T17:42:00.009-10:00

Talifaitasi Satele

I’m not sure what part of our monetary system Majac LeTautai has a gripe with, the fractional reserve banking, fiat money or the Federal Reserve itself. Perhaps an explanation of all three will help both of us determine what exactly we’re arguing about.

Fractional reserve banking is a process where banks keep only a fraction of their depositors’ money in the vault while lending out the rest in hope of making a profit by gaining interest on such loans. Your bank, however, does promise to pay you your balance should you ever wish to take it all back at once.

As “Modern Money Mechanics” explains, banks can easily predict the level of cash withdrawals, but the Federal Reserves dictates such parameters to its member banks.

The amount of money we would have in the economy would normally come from the credit created from fractional reserve banking and actual deposits. “Deposits” meant gold deposits during most of our banking history. A dollar in cash meant that you could redeem a dollar’s worth of gold, back when we were on the gold standard.

Today, however, we have a fiat money supply, where paper dollars are not tied to gold deposits but instead to our government’s order for us to accept the dollar as payment. Fiat actually means “order: or “decree”.

You can read on any dollar bill the statement, “This note is legal tender for all debts, public and private”.

The switch to a fiat money supply, which was only possible with the creation of the Federal Reserve, came about in what Mr. Greenspan explains was an attempt “to use banking system as a means of unlimited expansion of credit”.

The Federal Reserve is not a private firm but a supposedly independent government entity authorized by the Federal Reserve Act of 1913. Its Board of Governors are appointed by the President and confirmed by the Senate. The Federal Reserve’s actions in bailing out Wall Street over the past month is not a good indication of its independence.

Banking is better left to the free market, which is not what we’ve had since 1913.

Money: More Than a Piece of Paper

2008-10-14T19:36:00.003-10:00

Talifaitasi W. Satele

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.

Price: The Real Regulator

2008-09-04T19:25:00.001-10:00

Talifaitasi W. Satele

If we do recognize that the population is getting out of control in our great territory, we should admit that this is largely the government's doing.

The federal government's grants, interest free loans, and tax exemptions for the canneries have largely subsidized what we have today. Without that subsidization, either prices for everything we have received before would have been higher or would never have been available in the first place.

To obtain a standard of living independent of the federal government would require a thriving private sector. And when we talk about the private sector, we're talking about individuals working for themselves or for each other in efforts to produce for themselves or to trade with one another.

That means paying for our own healthcare, education, telecommunication, electricity, broadcasting, loans, infrastructure, and proper governmental services. That means not having a government that redistributes wealth from federal taxpayers and competes with private enterprise and subsidizes poverty.

If we had to start from scratch and had to pay to build a modern economy ourselves, it would be more expensive/difficult to have larger families, more cars on the road, and more homes on less land.

We have seen the concept of higher prices reducing demand on a number of occasions at home. With gas prices going up, consumption went down plenty. When prices for rice imports shot through the roof, people turned to local produce and healthier alternatives.

And it's just sad that the very government that wants to control the population also wants to control the very mechanism (prices) that actually does the job. Hopefully, the ASG plans continue to sit on the shelf and collect dust.

Alternatives Are Not Viable Yet

2008-08-14T21:51:00.006-10:00

Talifaitasi W. Satele

I like to make a number of points in response to Mr. Herdrich’s latest guest editorial.

First, I want to restate the fact that the technology is unavailable to make alternatives economical. When I say “economical”, I mean economical on a scale that fossil fuels (like oil) now provide for.

According to the Dept. of Energy (DOE), only .8% of the electricity consumed in the U.S. was provided by wind power during 2007. To get the other 99.2% would require an overwhelming dedication of resources. We’re talking about land, thousands of wind turbines, transmission lines and new grids here, and such investments would cost a lot of money.

The other thing to consider is that cost is not the only factor in determining what prices will be charged. Cost per kilowatt hour generated by current wind technology may be 4 to 6 cents, but that’s only in service to .8% of the nation’s electricity needs.

Let’s imagine for a second that all of the world’s oil wells dried up tomorrow, and everyone has to jump on electric grids powered by wind turbines. Currently, wind power technology is so far from being sufficient to meet demand that prices per kilowatt would be astronomical in such a scenario.

It’s the same story with every other alternative out there. All together, renewable energy can only provide for a mere 7% of the nation’s energy consumption in 2007 according to the Energy Information Administration.

Second, investment cost for alternatives are still prohibitive. Let’s start with hybrid vehicles. The cost of a Civic hybrid, for example, is $3,980 more than a conventional model. To make up the cost difference, one would have to drive 86,444 miles since you would only save .045 cents a mile at $4 a gallon of gas.

I’m glad Tom Drabble can afford to invest in solar panels for his hotels, but for a lot of folks, such an investment is out of reach and unjustifiable. And all his solar panels are doing is heating his water? People need a source of energy that does far more than that.

Last but not least, the only viable alternative to oil is a cheaper substitute. The switch from whale oil to petroleum was not made out of concern for that stupid animal. It was made because oil was and still is the cheapest form of energy.

Now whoever invents that substitute is going to make a lot of money. Big Oil would be stupid to be blind-sided by such advancement and not be part of that potential market. That is why they’re working on alternatives, not because they have anyone else’s best interest at heart.

In the meantime, having that 18 billion barrels of oil from off-shore drilling is better on the market than lying in the ground despite what the U.S. Energy Information Administration assumes its impact on prices will be in its latest study.

Dr. Patrick Soon-Shiong: Pro-Capitalist or Anti-Capitalist?

2008-08-11T19:02:00.005-10:00

Stuart K. Hayashi

This is the story of Dr. Patrick Soon-Shiong, from ABC News's Nightline. Is this a parable about the evils of capitalism? The Nightline story says,

Back in 1985, when Soon-Shiong was working as a surgeon, he was poised to perform a pioneering transplant of cells from pigs to humans when he made a chilling discovery.

"We discovered a virus in pigs, and I refused to do that transplant," he said. "My investors said, You will do the transplants."

His investors later sued him for fraud, and he won in arbitration.

"I recall vividly, they said, 'You know, heroes and pioneers take risks, and all that you will suffer is a slap on the hand from the FDA.' And I said, 'No, that's not all I'll suffer. We'll put patients' lives at risk and I will not do it,'" he recalled.

Aha! Does this not prove the evil of capitalism? Dr. Soon-Shiong stood up to his greedy investors, who were willing to endanger the lives of transplant patients in order to make a quick buck? Were the investors not greater exemplars of capitalism than Dr. Soon-Shiong?

. . .

If I told this story in front of an audience, this is the part where anti-capitalists would not be nodding along, taking this as confirmation of their worldview.

But there is more to the story. Soon-Shiong got tired of this corrupt, unethical environment. And so he started his own pharmaceutical company, American Pharmaceutical Partners (APP). He built up a reputation for honest dealing. Consequently, a lot of consumers decided to stop doing business with the corrupt people, and to buy from Soon-Shiong instead. This has made Soon-Shiong a billionaire -- far richer than his get-rich-quick investors from 1985.

So capitalism does work.

This is how the Nightline article began.

The blood thinner heparin is one of the most used drugs in America, employed daily in hospital surgeries and for kidney dialysis patients.

But a safe supply of this critical drug fell into jeopardy last winter [2007] in a catastrophe that illuminated severe problems caused by the fact that most ingredients for American drugs now come from foreign sources. These sources are not being adequately monitored by either the pharmaceutical industry or the Food and Drug Administration.

The FDA told "Nightline" that as many as 55, or perhaps considerably more, people may have died from the contaminated heparin. So far it's only been able to definitively link three deaths to specific lots of the tainted drug.

Although so far it's only been able to definitively link three deaths to specific lots of the tainted drug. Heparin used to be primarily produced by the pharmaceutical giant Baxter, but Baxter recalled its entire stock, nearly half the nation's supply, after the deaths from contaminated heparin. A number of smaller companies also recalled supplies. To date, Baxter says they have received 955 reports about contaminated heparin in 2008.

That's when billionaire pharmaceutical executive Dr. Patrick Soon-Shiong and his company American Pharmaceutical Partners (APP) stepped in with a large, safe supply of the drug. Without it, countless more Americans would have died.

There are indeed criminals and corrupt people in the business world, and some of them may get rich. But, to the extent that the market is free, consumers are able to seek information about which businesses truly deliver on their promises, and which do not. For that reason, in the long run, businesses that endanger their customers lose potential revenue to competitors who consistently treat their customers better. In the end, free enterprise is the best means of rewarding good conduct. In this case, it was Dr. Soon-Shiong, rather than his 1985 investors, who behaved in accordance with the principles of capitalism.

Off-Shore Drilling Is Part Of The Answer

2008-08-09T22:57:00.007-10:00

Talifaitasi W. Satele

I’m always dumbfounded when people compare our reliance on fossil fuels to an addiction, as Mr. Herdrich did in his guest editorial. If there is anything we’re addicted to, it’s to higher standards of living that oil is now providing for at the lowest cost possible. It’s unfortunate that some would relegate our pursuits of living better, more affordable lives to something as irrehensible as crack; especially when it comes to those who could least afford the high-priced luxuries of an environmentally friendly lifestyle.

In the past, oil harvested from whales was used to light up lanterns and make candlesticks. Transportation back in day was largely horse-driven, and those damn animals came with their own pollution problem: manure. That did not make for a pretty picture in large urban centers like New York City.

Oil replaced whales and horses as sources of our energy needs. And you can say that the switch to oil was unintentionally beneficial to the environment. It saved the whales from extinction, got horses off the streets reducing methane exhaust, reduced our dependence on more carbon polluting fuels such as coal and wood, and as a result of the latter, saved tree forests. All the while, petroleum is used to make everything from plastics to fertilizers to the asphalt the ASG forgets to put in all the potholes back home.

I say “unintentionally beneficial to the environment” because the intention is always to get the most output out of the least input. Economists call that “efficiency”, businesses call it “profitability” and the average Joe calls it “common sense”. And right now, oil is still the cheapest form of energy that requires the least amount of input to extract all of the output that makes modern life convenient. Not hydroelectric power, not wind power, not solar power, not geothermal power, and definitely not ethanol.

Currently, the technology is unavailable to make any of those alternatives economical. But Big Oil is working on it, because they realize that they’re in the energy business, not just the oil business. In the meantime, Big Oil wants to expand oil production at home using their own money, which is the clearest indicator that such ventures are viable. These people are putting their own money where the mouth is by investing billions in the infrastructure and technology that can expand domestic production in an environmentally safe manner.

Whether oil from off-shore drilling comes 10 years or 30 years from now, it is better to start today than it is tomorrow. Gas prices is a function of supply and demand, and increasing supply is the only way to bring them down. Some are even making the point that the now likely prospect of more domestic supplies coming online is causing investors to bet down the price of oil futures contracts.

Cheap gas is not a right, but as a matter of public policy, government should not be standing in its constituents’ way when it comes to using the environment to serve their needs. One day, oil may very well dry up, and we should expect to pay the true costs of energy as determined by supply and demand at that time. But that day is not today, and hopefully when that day does come, inventors have figured out how to make alternatives a viable source of energy.

Until that day arrives, off-shore drilling, oil shale and nuclear energy should all be part of a national energy policy.

What's Up With Congress and Gas Prices?

2008-08-05T21:22:00.003-10:00

Talifaitasi W. Satele

I hate to jump on bandwagons here, but I have to join the Republicans still holed up in Congress protesting the decision by Democrats to allow the legislature to go on vacation without taking any action on gas prices. Not that Republicans are admiring free-marketeers (which most of them are not), but at least they’re highlighting an energy solution I agree with, and that’s to increase energy supplies.

Get this: Big Oil companies want to use their profits to increase supplies but Congress chooses to stand in their way. Why?

I believe Faleomavaega owes the people of American Samoa an explanation as to why his party is blocking off-shore drilling and nuclear energy and what he has done (if anything) to persuade them otherwise.

Washington Post on Oil Prices

2008-07-27T13:55:00.002-10:00

The reliably liberal newspaper, Washington Post, did this piece on oil prices.

Why Speculation Is Needed

2008-07-25T07:33:00.006-10:00

Talifaitasi W. Satele

Many see market speculation for oil as the real culprit behind rising gas prices. Although economists point to global demand and supply as the primary drivers behind prices at the pump, some analysts believe at least 60% of the price of a barrel of oil today is pure speculation. Whatever the case may be, speculation does serve important market functions.

When pundits talk about speculation, they’re referring to the actions of investors on the futures exchange. A futures contract is a standardized contract to buy or sell a certain underlying instrument at a certain date in the future, at a specified price, according to Wikipedia. Through such contracts, traders can buy commodities such as oil at a future price believing prices may go even higher (which is the speculation aspect of all of this).

Buying a futures contract thus provides a hedge against inflation. That means buyers “speculate” that oil prices, for example, are going to be higher than the specified price of their oil futures contract. A trader would be willing to buy oil for August in July for, let’s say, a $160 a barrel when prices in July were, at the most, around $150 a barrel. They are willing to do so because they believe prices will be higher than $160 in August.

The other purpose the futures market serves is to provide some predictability in a volatile environment. ABC’s John Stossel explains quite well in his article, Bless the Speculator, how speculators help to “reduce volatility and uncertainty in an unpredictable world” and provide liquidity through their buying and selling.

Predictability and confidence extends beyond the futures exchange to purchasers themselves. Hawaiian Airlines, for example, can know what its fuel costs are going to be next month by purchasing their jet fuel on futures contracts. Even car drivers are getting in the act by buying fuel in advance through prepaid accounts locking in today’s prices in anticipation (dare I say “speculation”) that prices will be higher tomorrow.

But the most important market function speculation serves is to send resources to where they are needed most through the price mechanism.

Let’s imagine for a second that the Commerce Commission were in charge of the nation’s oil industry. All of their nifty statistics indicate that oil supplies are drying up and that the country will soon run out of gas. What will entice this government agency to act upon this information? How will the Commission marshal the resources necessary to address this emergency? From whom will the ASG tax in order to acquire this capital?

Speculation reflects what supply constraints are today and in the future, and by helping to drive up the price, it is focusing the nation’s attention and resources on the problem through free market incentives.

How Cab and Bus Fares Would Work in a Free Market

2008-07-16T20:06:00.007-10:00

Talifaitasi W. Satele

One of the first requirements for a free market in public transportation would be the freedom of drivers/owners to set their own prices. However, there are a number of reasons it’s in drivers’ best interest to invest in either meters or some system of ticketing that allocates prices to the distances they service.

A customer can refuse to pay in which case the owner would need evidence to prove his case in court or with the Commerce Commission. Setting rates can also make consumption easier, much like price labels at the grocery store, when customers become more confident about their purchases. But bus owners can’t make such an investment without being able to pass such costs along to consumers in the form of higher prices, which is currently against the law.

Initially, prices will be higher without price controls. Much higher nowadays because of gas prices and a high demand for public transportation. But higher initial prices will do two things: it will lower demand for public transportation and pay off investments owners have made in their businesses. Both will put pressure on prices to come down again as bus drivers would try to entice customers to come back and their investment costs have been paid off. And of course, competition will have its own part to play in the process.

Such adjustments in our public transportation system will never happen as long as the Commerce Commission exists to cap fares. And as long as bus and taxi cab drivers continue to absorb higher costs without being able to legally raise their fares, the more will see the sort of opportunistic behavior that seeks compensation through fraud.

obaMACcain: not-so-great candidates think alike

2008-07-08T02:57:00.003-10:00

Stuart K. Hayashi

Every Sunday, the newspaper arrives with a silly weekend tabloid-insert called Parade magazine. In the Sunday, July 6, 2008 issue, there are two articles -- one by Barack Obama and the other by John McCain. So I turned to pages 4 and 5, which have the Obama and McCain articles side-by-side.

In the print edition, the title of Obama's piece is "Sacrifice for the Common Good." On the next page, we have the title of McCain's: "A Cause Greater Than Self-Interest."

Ummmmm, don't the two titles have the same meaning? Doesn't a "Cause Greater Than Self-Interest" imply a "Sacrifice for the Common Good"?

The titles are different for the online versions, respectively at here and here. However, you can see the two titles from the print edition on the Table of Contents web page -- as Sub-Headlines -- over here (these contents will be erased when the next issue is posted online).

When you read the two columns, you find that they do have nearly identical messages. This isn't a real debate, because the two candidates don't ultimately disagree on the fundamental philosophic issues. The main difference between the two articles is that Obama's platitudes are much more familiar and much less coherent. When one tries to decipher a final message amidst Obama's heap of cliches, it appears to be that everything to him must revolve around Community, Community, Community.

Overrated Obama briefly gives lip service to a Horatio Alger-styled American Dream, but he qualifies that "living our dreams" entails behaving as a tiny little cog in a Greater Collective.

McCain's piece distinguishes itself in that it fixates on a topic dear to McCain but not so greatly beloved by Obama -- militarism. Obama says that soldiers "inspire" him, but he cannot take pride in military service in a manner comparable to McCain.

Interestingly, while Obama focuses on the social collective, he talks as if no self-renunciation is involved in his brand of collectivism. On this count, I am more greatly aggravated by McCain's words -- because McCain is more honest and explicit about the exact price of the sort of collectivism that he and his "opponent" (ha ha) champion: "We are blessed to be Americans, and blessed that so many of us have so often believed in a cause far greater than self-interest, far greater than ourselves."

If you removed the bylines from those columns, I would only be able to identify each author according to whether or not he referred to having served in the military. If you excise even that, and just put the words themselves on paper -- minus the pretty pictures -- I would not be able to identify the different authors upon reading the essays.

It is possible that either or both of these pieces might have been written by authors other than the candidates, but the candidates approved of what is in these pieces, and so the candidates are ultimately (ir)responsible.

Ugh. Do you remember a time when the two main political parties actually had two different people running during the general election?

Between the two major parties, there is just one candidate in the general election: Political Collectivism. It is obamaccain versus obamaccain.

Watch the pincer movement. If you're sick of one version, we push you into the other. We get you coming and going. We've closed the doors. We've fixed the coin. Heads -- collectivism, and tails -- collectivism. Fight the doctrine which slaughters the individual with the doctrine which slaughters the individual. . . . Offer poison as food and poison as the antidote. Go fancy on the trimmings, but hang on to the main objective. Give the fools a choice, let them have their fun -- but don't forget the only purpose you have to accomplish. Kill the individual. . . . The rest will follow automatically. Observe the state of the world as of the present moment.

--Ellsworth M. Toohey in The Fountainhead by Ayn Rand

George Washington on Economic Freedom

2008-07-04T01:46:00.002-10:00

Stuart K. Hayashi

Since it is July 4, I thought I should mention that George Washington understood that the United States could prosper only to the extent that it maintained economic freedom. And he credited the Enlightenment for having brought about this understanding.

On June 8, 1783, he wrote in his "Circular to the States":

...The foundation of our Empire was not laid in the gloomy age of Ignorance and Superstition, but at an Epocha when the rights of mankind were better understood and more clearly defined, than at any former period, the researches of the human mind, after social happiness, have been carried to a great extent, the Treasures of knowledge, acquired by the labours of Philosophers, Sages and Legislatures, through a long succession of years, are laid open for our use, and their collected wisdom may be happily applied in the Establishment of our forms of Government; the free cultivation of Letters, the unbounded extension of Commerce, the progressive refinement of Manners, the growing liberality of sentiment, and above all, the pure and benign light of Revelation, have had a meliorating influence on mankind and increased the blessings of Society. At this auspicious period, the United States came into existence as a Nation, and if their Citizens should not be completely free and happy, the fault will be intirely their own.

We have gone from that sort of wisdom to . . . John McCain and Barack Obama. And who can we Americans blame for this but ourselves? :-(

America must rediscover what freedom is all about. Reading "Man's Rights" and "The Nature of Government," linked to in the post below, is a good start.

'Man's Rights' and 'The Nature of Government'

2008-07-04T00:51:00.002-10:00

Washington, D.C.'s Ayn Rand Center for Individual Rights has posted online two very important essays by Ayn Rand about what a free society truly looks like.

* "Man's Rights"

* "The Nature of Government"

These principles are very much worth remembering on July Fourth.

'Put the Independence Back in Independence Day' by Michael S. Berliner

2008-06-29T02:17:00.004-10:00

In a terrific YouTube video, Michael S. Berliner of the Ayn Rand Institute discusses what American freedom is all about. The principles upon which the United States was founded are worth remembering on the Fourth of July. :-)

The Ayn Rand Institute's library of YouTube videos can be seen here.

Ken Schoolland's Economics Presentation Online

2008-06-19T15:02:00.003-10:00

In this excellent online presentation, the great economist Ken Schoolland explains why it is wrong for the government to try to redistribute income from the rich to the poor.

My only complaint is that this video is too soft. I had to put the speakers directly up to my ear in order to hear it.

Airline Troubles

2008-06-14T21:02:00.003-10:00

With airlines coming under increasing criticism for their price hikes, I believe this piece by Patrick Smith in the Washington Post to be an important consideration for those passionate about the debate over airfares. American Samoa has had its share of infighting over the cost of flying (with Hawaiian Airlines), and it won't be long until we see the same story played out in the US Congress.

Back in the day in Tutuila, villages far away from the town area had very few vehicles owned by a few families. Those families who owned cars would charge their neighbors if they wanted to catch a ride with them to go to town. Now imagine if a politician like Governor Togiola came along in those days and tried to regulate market prices.

Today, more families own vehicles to drive themselves.

2008 Presidential Election

2008-06-03T20:25:00.007-10:00

I've been debating whether I should vote for John McCain or whoever got the Libertarian nomination for a while now but because of his speech in New Orleans today, I'm more likely now to vote for the Republican nominee. I don't agree with him on campaign finance reform or his views on self-interest, but I think his overall approach may lean towards more free-market solutions than with government. That's a big IF in itself.

My money is on Obama for winning the presidency though. Let's see if the market can predict this one.

The Minimum Wage in 2007

2008-06-01T14:52:00.007-10:00

In 2007, only 2.3 percent of all hourly workers earned at or below the minimum wage, which was $5.15 from January 2007 through July 2007 and $5.85 from August 2007 to the end of the year. I credit Mr. Hayashi for initially pointing out this source to me a couple of years ago, and I recommend his piece on the minimum wage issue. One of his more interesting findings is that, according to a Bureau of Labor Statistics' article, "63 percent of workers who make the minimum wage or less receive raises that put them above the minimum-wage level within one year of employment. Only 15 percent of workers still earn the minimum wage after a period of three years."

What does this mean for American Samoa? In our rush to address some imaginary social injustice, we may deprive many of our people of a necessary step up the economic ladder. Nevertheless, presumed social benefits shouldn't be justification for government to trump individual rights of either employers or employees. We shouldn't have to debunk the liberal case of social benefits or justice of the minimum wage to defend the rights of employers and employees to negotiate wages between themselves.

I guess that's another argument for another day.

Penn & Teller vs. Environmental Hysteria

2008-06-01T06:30:00.001-10:00

To see a 29-minute video of Penn & Teller refuting the anti-capitalist hysteria of various environmental activists, go here.

Warning: That video contains foul language. Viewer discretion advised.

How Can Capitalism Exist Indefinitely in a World of Finite Resources?

2008-05-19T15:40:00.007-10:00

Yaron Brook, the executive director of the Ayn Rand Institute, explains in this 7-minute video why human beings cannot run out of nonrenewable resources in a free market.

More excellent videos about economic freedom can be found on the Ayn Rand Institute's YouTube Channel.

'Too Big to Bail'

2008-05-17T06:56:00.003-10:00

In this excellent video op-ed, you can hear Alex Epstein of the Ayn Rand Institute explain why the U.S. federal government should not use tax dollars to bail out the banks that failed in the recent mortgage lending meltdown. What we really need is a free market in banking.

Worker's Rights

2008-05-05T20:16:00.001-10:00

Faleomavaega says, "No other leaders in Congress know more about the rights of working men and women throughout the United States and its territories than Chairman Miller and Chairman Kennedy." I have to ask our Congressman, what exactly are those rights? Are workers being forced into labor camps in American Samoa? Are employers pointing guns at employees and saying, "Work at this wage rate or else?"

Perhaps he is referring to the minimum wage, which is not a right. If it were, it would exist with or without the presence of government. For example, if there were no government, would you not defend your life in the wilderness? If there were no government, would you not defend the property you acquire to preserve your life? But how in the world could one impose, let alone articulate, a right to a minimum wage upon his neighbor if there were no government?

The only right a worker has is his freedom to contract. Government has a role to protect against fraud and ensure safety, but is that what the US Congress is fighting for in American Samoa on behalf of our people? The only rights Chairmen Miller and Kennedy are interested in are not the ones government is meant to protect, but mere demands of their constituents backed by the force of law.

Congressmen Faleomavaega, Miller and Kennedy say that not "enough specific data and information" was provided to warrant a delay in forcing up the minimum wage. My other question to Rep. Faleomavaega is: why wasn't this request for data and information made before they decided to impose and raise the minimum wage law?

Reject Togiola's Compromise

2008-04-16T20:29:00.000-10:00

If the business community wants to help in creating a positive environment for all enterprises to grow, they would reject Governor Togiola's idea of a compromise on the container inspection policy. The governor plans to allow some importers "some leeway" in getting their containers inspected as long as he deems them "honest". Such a policy is an invitation for corruption and would do more to worsen an already bad business climate.

How long will it be before some businesses can buy the "honest" label? How long before the family and friends of the Togiola administration can get a pass while everyone else has to wait in line? How long will it take before local businesses get smart and use this policy against each other and foreigners? If history is anything to go by, it won't be long at all.

Even if "honest" businesses get a pass in this effort to streamline the process, Treasurer Gaea P. Failautusi would still have to conduct a random inspection to keep them honest. Since that will be the case, why won't the governor take the business community's advice and conduct random inspections instead?

Short of applying random inspections across the board, the governor has to either do 100% inspections or none at all to maintain fairness to all importers. But I think he is more concerned with breaking up the opposition than he is with doing what is right.

If that is the case, businesses would do well to reject his compromise and forgo his leniency.

Use Your Mind

2008-04-13T01:43:00.001-10:00

This excellent video by Zach Oakes, entitled "Use Your Mind," explains how economic freedom is essential to the continued prosperity of any region. These are lessons that can be applied to American Samoa and everywhere else.

The Arrogance of Power

2008-04-12T07:37:00.003-10:00

If Larry Fuss decides to take the Togiola administration to court over the container inspection policy, I will personally write the man a check. The ASG doesn't appear to be interested in doing what is best and reasonable for all concerned: businesses, consumers and even the government with regards to revenue collection! It's instead engaged in a turf war, which the administration is determined to win no matter the costs.

Despite the apparent folly of this policy, Treasurer Gaea P. Failautusi could have been right. Containers could have been inspected in a timely fashion. Businesses could have been able to pay for their imports and restock their shelves at a cost so insignificant that they would not "threaten" to pass them along to their customers. But the policy has run its course long enough to prove that neither is true.

Even if store shelves in American Samoa weren't going empty or prices for imports like sodas weren't going up, the fact that businesses balked at the proposal should have given any reasonable person pause to think things through.

Why? Because business survival relies heavily on low costs and timeliness. The role costs play is quite apparent. On the other hand, it may seem hard to see why time also means money. Lost time can mean the expiration of goods. Lost time can also mean lost opportunity to serve a customer or to expand services.

If the container policy wasn't costly or very slow for that matter, why wouldn't a majority of businesses embrace it? To avoid paying excise taxes on undeclared goods? That hardly seems reason enough to confront a hostile government over something that should otherwise be insignificant. Some in the business community even suggested what might be more efficient and fairer measures to revenue collection.

But the Togiola administration doesn't want to hear any of this. This is what happens when we give power to the government to operate a function that shouldn't be its role. A port operated by a for-profit company wouldn't slap the hand that feeds it. I imagine it would want to impose fees on the most customers as possible and invest in the necessary equipment to ensure users don't cheat on their bills or bring in illegal contraband.

Unfortunately, some see "might" as being "right". It's an arrogance of power that is seriously incompatible with a free market and a free people.

George Washington Supported Open Immigration

2008-04-06T04:07:00.003-10:00

Dear Tali,

I have come across a book by Richard Brookhiser titled What Would the Founders Do?: Our Questions, Their Answers, originally published in 2006, (New York, NY: Basic Books, 2007 paperback edition).

On pages 175-76, it points out that George Washington was an avid supporter of open immigration. He did not mind at all that a competent immigrant might "steal the job" of a native-born American. As Brookhiser details,

In 1784 George Washington was in the market for a carpenter and a bricklayer. He asked Tench Tilghman, one of his wartime aides, to scour a boatload of Germans that was due to land in Baltimore for the proper workmen. "I would not confine you to" Germans, he added. "If they are good workmen, they may be of Asia, Africa, or Europe. They may be Mahometans, Jews, or Christian of any sect -- or they may be atheists." Washington was laying it on for comic effect; he is saying, hire anybody who can put boards or bricks together. But there is no reason to think that if Tilghman had found a Muslim bricklayer, Washington wouldn't have hired him.

Washington wrote those words to Tilghman from Mount Vernon on March 24, 1784. You can see the PDF of that letter here. It says,

I am informed that a ship with Palatines [Germans] is gone up to Baltimore, among whom are a number of tradesmen. I am a good deal in want of a house joiner [carpenter] and brick-layer who really understand their profession, and you would do me a favor by purchasing one of each for me, if to be had, I would not confine you to Palatines [Germans]; if they are good workmen, they may be from Asia, Africa, or Europe; they may be Mahometans, Jews or Christians of any sect, or they may be Atheists. . . . I do not limit you to a price, but will pay the purchase money on demand.

There you have it. Open immigration was good enough for the Father of this country.

An Announcement

2008-04-01T06:06:00.001-10:00

Stuart K. Hayashi

Dear Tali,

I have some news. I don't know if there is even an appropriate way for me to break this to you. Trust me -- it's not easy.

It's just that, . . . well, . . .

. . . I don't have full confidence in the free market anymore.

Laissez faire is not sufficient when it comes to addressing many of the inadequacies of living in society today. You need government to build a dam to protect everybody from flooding; a free market is not enough for this, what with the "free rider" problem and all. And to pay for a lighthouse's upkeep through having the private dock owners own the lighthouse and pay for its maintenance through docking fees, only works if the private dock owner has a monopoly on any port that the lighthouse can possibly guilde any ships to.

I can't explain this all in a single blog post, so I've given a more detailed explanation of why I no longer have full confidence in the free market.

To read my more detailed explanation, go to this website.

Thank You Asian Businesses

2008-03-24T21:39:00.000-10:00

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.

Individual vs. the Collective

2008-03-14T18:18:00.000-10:00

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.

FCC Petition

2008-03-01T07:08:00.002-10:00

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?

Opposition to FCC Petition

2008-02-25T20:49:00.003-10:00

( 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.

No to Popularity Contest

2008-02-19T18:37:00.001-10:00

The Attorney General's position should not end up being a popularity contest, and that is what will happen if we make it an elected position. The standard for justice should not be what the public sentiment is at the time, which direction the political wind is blowing or if a case will help the AG hold office or further his or her career. Having the AG come under the administration is not perfect but it is far better than the circus show we will see once we put the position up for a popular vote.

A good example of this is the Duke University lacrosse case where the North Carolina's Durham County District AG, Mike Nifong, prosecuted three members of the lacrosse team accused of rape and withheld evidence proving their innocence. He has been disbarred for "dishonesty, fraud, deceit and misrepresentation".

Thomas Sowell writes the following in National Review Online,

"Now Nifong faced a tough election against a woman he had once fired and who would undoubtedly fire him if she became district attorney."

"Where would that leave Nifong? Out on the street at an age when most people are not likely to be starting a new career. His pension as well as his job could be in jeopardy. Moreover, his opponent was favored to win the election."

"Then along came the Duke University "rape" case, like a deliverance from heaven."

"Politically, the case had everything: White jocks from affluent families at a rich and prestigious university versus a black woman who was a student at a far poorer and less distinguished black institution nearby."

"Above all, there were black voters who could swing the election Nifong's way if he played the race card and conjured up all the racial injustices of the past, which he would now vow to fight against in the present."

And there we have it: a circus show instead of justice.

Some people see democracy as some golden standard by which to judge everything. Instead, democracy is a tool for the people to run the state not to administer justice.

American Samoa's AG is responsible to the governor, and the governor is responsible to the popular vote. So is the House of Representatives who, along with the Senate, can summon the AG to testify on a pertinent issue. If the AG does something that attracts the ire of the people, believe me, he or she is going to get fired, elected or not.

Is that not enough? Is the system so broken that the Fono has to fix it? Their solution will come with its own problems, which would more likely be worse.

An Empty Promise

2008-02-09T09:35:00.000-10:00

The corporate tax rate is nothing more than an empty promise. Think about it: the ASG stands to pocket a whopping 44% from foreign corporations.

So let's say a non-U.S. business makes a $1 million in profit. The ASG would get $440,000, and use that money to promise voters things like education, healthcare, pay raises or anything that helps to win an election. The government, with its magical figure of 44% (is there some reason it's not 45?), will take care of the people's welfare.

The only problem is that foreign corporations are not stupid enough to come to our territory just to get ripped off. So instead of attracting more competition and more investment that will diversify our economy, lower prices, add jobs and raise wages (and thus empowering our people to take care of their own welfare), we end up with 44% of nothing.

Minimum Wage Hearings

2008-02-02T06:33:00.000-10:00

There is one more audience whose views need to be included into the House hearings on the minimum wage issue, and that's employees. That group is the beneficiary class or the targeted group of that legislation, and they represent a significant block of voters. There should be no doubt that that is the only reason such laws are put into place.

The question employees need to testify on and answer is if they feel this is how wages should be raised. The minimum wage law practically puts a gun to employers' heads and says, "Pay this wage level or else." Do employees feel, as I believe most honest people do, that wages are negotiable and dependent on one's level of experience, skills and education and the nature of supply and demand for the job?

All of these factors count, otherwise we'll be arguing why football players make more than Faleomavaega when most people would argue he does a vital and important job. I not being one of them of course.

Yes, We Can | We Shall Prevail

2008-01-09T20:04:00.000-10:00

Stuart K. Hayashi

I have a friend I'll call "X." X mentioned to me a year ago that a friend of his said that the mark of a talented political demagogue, who can successfully beguile the masses, is that he will often express a certain sentiment in his speeches. X told me that soon after his friend said that, he coincidentally heard Barack Obama express that very same sentiment in a speech, but he couldn't remember what it was.

It makes me wonder if that sentiment is huge overemphasis on collectivist unity.

In his Tuesday, January 8, 2008 speech in New Hampshire, Barack Obama said, "We are one nation, one people..."

And then I thought, "Aren't those almost the same words used by Big Brother in the famous 1984 Apple Macintosh commercial?"

Sort of. Compare them.

* Apple Commercial

* Obama 1/8/08 New Hampshire speech (He says, "We are one people, one nation" at the 00:05:25 mark)

The repeated chanting of "Yes, we can! Yes, we can!" in the Obama speech also reminded me of Big Brother proclaiming, "Weee shallll pre-vail!"

"National unity" is overblown. What is more relevant than our being "one people" is that we are each individuals. Rather than "We are one people," it is: "You are one person." And I am one person. That's the way it ought to be.

Taxing the Rich Hurts the Poor

2007-12-30T09:53:00.000-10:00

Unlike socialists, I observe that wealth is something that is created and not some fixed pie in the sky. Progressive taxation, where one pays a higher percentage in taxes as he earns more income, is justified on the grounds that one should pay more to the government because he or she has a larger share of that fixed pie. In that way, a benevolent class of politicians can vote on how to redistribute that wealth amongst the masses.

The fixed pie theory assumes that taxing “the rich”, whose definition depends on who you ask, will have no negative consequences on the poor and everyone else in between. From the socialist point of view, only good can come from taking money from those who have it and giving it to those who don’t have it. One of the reasons is because of the assumption that rich people horde all their wealth under some mattress somewhere in their homes. Many believe that their achievements of happiness came at the expense of the rest of society and had no indirect, unintended or some “invisible hand” benefits to anyone else in the community.

Bah! Hum Bug! You will hear leftist political commentators on TV proclaim that “the rich” only buy things like Rolexes and Ferraris. This is supposed to stir some feeling of jealously in a viewer like myself because I can’t afford to buy a Rolex but have purchased a Citizen watch instead. But who makes Rolexes and Ferraris, and what do they purchase? And who makes whatever the makers of Rolexes and Ferraris purchase, and what do they purchase? And so on and so forth.

I work at a timeshare property whose owners I consider to be pretty wealthy. If you are willing to pay $40,000 and up for a week’s worth of ownership, you’re likely to have a lot moolah backing you up. Where would a person like myself be when a future President Hillary Clinton taxes the hell out of our customers? Will “the rich” still come to our property bringing in the necessary revenue that keeps me employed and pays for my and my son’s healthcare?

I’m disgusted with politicians who think I don’t know a little something about economics, assume that I won’t notice the unintended or intended consequences of their tax hikes and expect that I will appreciate their redistributed welfare when I’m standing in the unemployment line.

But let’s say that “the rich” don’t spend and instead only save their money. Wouldn’t it then be economically beneficial for government to tax and spend their money?

Most people don’t save their money under a mattress. Instead, they’re likely to invest in conservative portfolios or stash it in a bank with low returns. Or they may assume some risk to get higher returns in aggressive investments. In this way, “the rich” provide the liquidity in the financial markets where risky start-up companies can find the cash they need (through high interest loans) and future homeowners can take out mortgages (through relatively low interest loans).

We’re not likely to hear politicians consider any of these facts however. Class warfare gets crusader politicians elected, even though government in America , unlike some other countries, enforces no classes of society. All men are created equal here, but it will be your individual talents, motivation, determination and values that determine how far you will go.

A Free-Market Individualist's Anthem?

2007-12-29T09:13:00.000-10:00

Like most entertainers, Billy Joel is a politically-correct statist. However, in 1978 he performed a song that sounds like the anthem of a free-market individualist, emphasizing independence, the American dream, and the spirit of Horatio Alger. The lyrics go,

I don't need you to worry for me, 'cause I'm all right
I don't want you to tell me it's time to come home
I don't care what you say anymore; this is my life
Go ahead with your own life, and leave me alone

I never said you had to offer me a second chance
(I never said you had to)
I never said I was a victim of circumstance
(I never said)
I still belong; don't get me wrong
And you can speak your mind
But not on my time

"I never said you had to offer me a second chance"? "I never said I was a victim of circumstance"? If everyone had that attitude, the welfare state would be no more.

Privatization at its Best

2007-12-15T16:57:00.000-10:00

If we privatize the Department of Buses and Taxis, what would its overpaid director and army of government clerks, statisticians, bus drivers, taxi cabs operators, and accountants do for a living? How could we allow this important, vital public good be left to greedy entrepreneurs who care about nothing else than to make a quick buck? Moreover, there is not enough money to make in our great territory to support the investment necessary to allow the private sector to assume such a tremendous responsibility essential to the general welfare of our people.

How could government keep accountability of how private bus and taxi owners operate their businesses? Without the not-for-profit integrity and honesty of government, wouldn’t these private entities waste precious resources in their operations of public transportation? If one operator is not accountable, he would lose the capital necessary to expand his business, and eventually, his unaccountability will reflect in the prices he has to charge his customers. Then an operator, who is accountable and wise with his limited resources, can charge a lower price than what the first operator charges or even expand his operation by buying another bus. The second operator will then take more market share from the first operator simply because of the first operator’s unaccountability! This is what we, liberals, call dog-eat-dog competition, and that’s what will happen if we privatize the Department of Buses and Taxis, and we don’t need it!

People need set routes and times for transportation, and that’s not guaranteed under private control. People need to be ensured that buses will service certain areas because we can’t rely on asking them to take a turn off the major roads for there’s no money in going the extra mile for the customer. Common courtesy and asking “please” and saying “thank you” are things of the past. Transportation is a right, and bus drivers and taxi operators should be forced into providing it for the common good of society.

Our government and the Commerce Commission have both the responsibility and the power to ensure that public transportation remains in good, orderly and uniform manner. If we privatize the Department of Buses and Taxis, it would be chaos and anarchy if left to the pursuit of profits.

But then again, isn’t public transportation already privatized?