Innovation vs regulation

Doing things right brings into full view the need to focus on innovation rather than regulation. It’s basically simple: A light touch from government encourages innovation quicker than otherwise. Silicon Valley is a perfect example of light taxes and regulations. Texas has led the troops on this score.

Too much fees, taxes, and stifling regulations exact the complete opposite. It’s this very set of facts that annihilated investments in the Golden State.

But how does the CNMI pursue innovation if at all?

A commission on investments should be established and charged with the review of fees, excise tax, and other predatory or incendiary policies that have dissuaded or scared investors from coming to the islands. It should also review the financial viability of all investors to ensure we aren’t dealing with speculators or fully shielded criminal elements.

Let’s begin by fostering a strong sense of responsibility to instill stability in the policies we place on the table for thoughtful review. Let’s not vacillate for purposes of political convenience. Nah! That sends all the wrong messages to investors of substance.

Discontent

We’ve unjustly demonized CW workers when in fact they’re gainfully employed paying their dues to the local coffers. They’re here in view of our ill-conceived decision to build beyond our ability to support the hotel industry with local warm bodies.

Not casting aspersions, but have we raised the same questions against FASayers who are here unemployed and feeding off a hog’s back? Why can’t we demand U.S. Immigration to look at this issue a bit more critically given the usually late remittance of Compact Impact funds?

Now, we seem to hold the view that raising the minimum wage would effectively grant all employees salary bumps upwards. Not quite. U.S. minimum wage law exempts companies earning less than $500,000 annually from paying federally mandated MW. So where’s the benefit?

Moreover, firms that could afford it must pay upfront. Paying $5.50 an hour is about two dollars short of the federal minimum wage. Locals who receive such wage and must still apply for food stamps to support the other half of their needs is a tale in itself.

In other words, the federal government is subsidizing the companies. If hotels are into this scheme, how about sharing the healthy occupancy rates with your employees so the feds don’t have to subsidize your business operations?

Peeking into bonds

While the CNMI has recently passed the one billion dollar mark in debts, it plans to float a pension obligation bond to the tune of $120 million in hopes of resolving pay for retirees per the settlement agreement. So it seems the paradigm is to engage in short-term answers as to ignore the long-term implications of the loan. Amortized, we’re talking paying back over $219 million in pension obligation bond.

Ahead of the CNMI, Puerto Rico is also dealing with a $70 billion debt it seeks to cushion by selling $3.5 billion in bonds. The debt is attributed to some 30 years of negligence. Sounds familiar, doesn’t it? The CNMI plan brings into focus two issues:

1). Forcing other taxpayers who won’t benefit to cough up money for this purpose. 2). Instantly saddling our children with debts that would annihilate their economic freedom. There’s got to be a better way than piling up more debts than we could pay.

It’s obvious the CNMI needs better-suited leadership to move the Canoe of Mediocrity out of the Harbor of Bankruptcy. Something’s got to give beyond the dimmed and abject fiscal conditions of the CNMI today. It would be one long journey and the “tide waits for no man.”

No tomorrow living for today

Since December of last year, our focus is stuck in the loss of 25 percent in retirees’ pay as to ignore others who withdrew their contributions from the “defined benefit” plan, forfeiting their future after serving for 20 years. But even as I raise this issue, five years from now the current program takes its final trip into the sunset.

How do we deal with employees who can no longer look forward to some form of retirement? Do they get to work forever, spending every penny earned on other obligations today, ignoring saving some for that rainy day? For those without health insurance, are they prepared to deal with emergency health costs, i.e., a family member needing off-island medical specialist attention?

Furthermore, the death of the current program in 2019 also means zero-sum for retirees of nearly 3,000. It also means some $70 million would be removed from the local economy. There goes revenue generation taking a nosedive.

Employees who withdraw their contributions are spending everything today. So it’s a case of living tomorrow today. Not a very promising journey into their golden years, is it?

Appalling how politicians have driven the Fund into bankruptcy by sticking their filthy fingers into the cookie jar, clueless how to keep it operating cash-balanced. Where are they now? Or have they also turned victims of their sheer lack of understanding that you can only eat off the hog’s back for so long?

Any which way you dice or splice it, shortsightedness has finally come home to roost in the obvious bankrupting of the Fund. Imagine the 30 percent bonus granted employees who retire early. Imagine inserting beneficiaries who never contributed into the Fund. Broke!

The Fund is on its way to some holy ground for burial in 2019. Would this include the interment of politicians who ensured it is broke by their injection of liberal and bankrupting measures?