“The Market Will Determine Aspire’s Fate” Thursday January 7, 2010

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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.

Talifaitasi Satele
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Comments to this story (6)
Yes-- market has made the decision already  wrote:
09 Jan 2010 08:17 AM
Market says, to close shop and move out-- Good bye Starkist, good to have known you for cheating workers their wages.
The Ombudsman  wrote:
08 Jan 2010 03:21 PM
Thank you Talifaitasi S. I think the answer is in the last word of the first paragraph of your letter. The market place is now standing and done I suppose. And how many people are being benefit from this building so far?, as far as money left over from it? That market place will be for the homeless perhaps, people are in the terriotry illegally will all happy to have a roof over their heads and hide from the immigration altogether. I also think they were using a wrong word for such incumbent, because the people of the territory don't have no ambition (ASPIRE) to make changes as far as creativity is concern. If they were ambiguous people, I can say ASPIRE is the right word to such incumbent. But no; Samoan people have limited knowledge to excel, and not only that, the government doesn't have enough resources to implement any plans, as well as people they are hiring don't have enough expereince, nor education to make the word ASPIRE come to reality. So therefore; I think the government's aiming is to high for something they can't fullfil. Looking for Fulgent? I don't think so!. I am sorry but the truth has to come to light. Obstinate could be one of the reasons in a wrongful way.
Market says  wrote:
08 Jan 2010 03:07 PM
The plan does not work, Starkist is packing it up and moving along. Now, it does not stop them all from automating their operation, but that means they really have to move out to get closer to customer. Why Starkist? Try banking, and or hire out brains-- engineers, etc
Tama Samoa Moni  wrote:
08 Jan 2010 10:51 AM
Thanks Tali, but let add that another factor affecting ASPIRE is the economy throughout the United States. There are a lot of other important issues for the US Congress to consider, and at this point in time it is hard to move ours (ASPIRE) forward. These are trying times and I hope that a compromise could be worked out to benefit not only the remaining cannery but any other cannery that wants to set up shop in American Samoa. It is vital we keep the remaining cannery to help with our fragile economy and especially families who are struggling to "make ends meet" on a daily basis. We have lost Samoa Packing, and the Call Centers are in limbo, so we have StarKist as the only viable alternative at the moment. Don't really know what the advisors to the Governor are still giving him about ASG purchasing Samoa Packing, but that idea should be scrapped altogether and negotiate with the remaining cannery to see what they can do to bring in more people to be employed.
TB  wrote:
07 Jan 2010 08:38 PM
I thought the government would be all for supporting tourist in the island, there is only one place most of mature ppl would meet and discuss sports othe intrest or just have a quiet moment with quality friends and hang out. but it sad to say if they go ahead and close down this well organise venue for all of young and old to hang out. I can see the sign on the wall if they decide to close it down the visitors would take their sports somewhere else like in Samoa (Apia)and there goes money in our pocket. just my thought, I support the yatch club one hundred percent.Hope it will come to a good decision keep my fingers crossed.
You Right  wrote:
07 Jan 2010 06:14 PM
tell that to eni, togiola and the nimrods.