After Coronavirus: The Future of the Hawaiian Economy

Hawaii's Economy

By: T. Jeffersonian

Coronavirus 19 revealed the Hawaii’s lack of economic versatility and resiliency.  The state is dependent on tourism and the military for its income.  Without tourism, Hawaii is now near entirely economically dependent on the federal and state governments.  Our state political leadership – exclusively Democratic – seems to be content with Hawaii’s economic dependency as a welfare state.  This economic dependency fuels the Democratic Party’s Federalist views that the political elite are the only group amongst us qualified to make the best economic decisions for every citizen.  Decision making in the hands of the elected elite creates an entangling bureaucracy and slows results for all.  Results can however be sped up if you know someone important and they get something in return for helping you.  Bureaucratic results cannot keep pace with a dynamic, fluid crisis such as Coronavirus.  

Let’s do a quick comparison between decentralized decision making and centralized bureaucratic decision making just in our public schools.  In Kailua – Kaneohe, public schools are not open and when they do open after the New Year, they will continue to operate on abbreviated schedules.  Comparatively, private schools in the same area have been open on full schedules for months without issues.  Private schools operate like businesses.  They have to provide a product or service in order to make a profit.  Public schools do not operate like a business.  They are going to be funded whether they provide a product or not.  Public schools’ funds are running out and our public teachers and school staffs will begin to be furloughed after the New Year.

In order to prevent elongated furloughs and further budgetary cuts, eventually our taxes will have to be raised.  After California, Hawaii has the second highest tax rate in United States.  In addition to high taxes, Hawaii’s cost of living is the highest in the United States.  Everything that we require to sustain life here in Hawaii must be imported.  Due to the highest costs of living and taxes in the country, we have less discretionary income to spend resulting in our spending out of necessity alone.  Necessity spending fuels the downward spiral.

There have been several economic downward spirals before Coronavirus.  There was the Financial Crisis of 2007- 2008 and the Great Depression in the 1930s.  Let’s talk about the Great Depression for a moment and the series of New Deals enacted by the Federal government to reverse the Great Depression.  The New Deals eased the symptoms of the Great Depressions; but the New Deals did not end the Great Depression.  World War II ended the Great Depression.  With the return of Great Power Competition between the United States, China, Russia, Iran, North Korea, and Violent Extremist Organizations, the economic and social downward spirals emanating from Coronavirus, may spark the war that ends life on Earth.

In the meantime, what can a Jeffersonian Republican approach to the future Hawaiian economy do to return and enhance life here in our state? 

Become Business Friendly: 

The first Jeffersonian step undertaken must be to establish the conditions that make businesses want to establish themselves in Hawaii.  In 2019, Forbes ranked Hawaii number 47 out of 50 states in terms of being business friendly.  To become business friendly, Hawaii must de-regulate and lower business associated taxes. 

Become Energy Independent:

To become truly business friendly, Hawaii must become energy independent and must lower energy prices.  Over 60 percent of Hawaii’s electrical power is created by burning imported fossil fuels.  Coupled with heavy reliance on imported fossil fuels, Hawaii energy prices are the highest in the United States.  In order to reduce our energy prices and reduce if not remove our reliance on fossil fuels, Hawaii must embrace our geographic placement and the resources we have on hand and we must do this without damaging our fragile and very unique ecosystem.  Hydrogen fuel cells can be made from sea water, so a hydrogen fuel cell business should be in order.  The sea has tide and wind, so tidal energy and more wind farms are in order.  The sea surrounds islands made from millions of years of volcanic activity.  Volcanic activity means geothermal energy.  Energy must continue to be provide by solar means with every house and every surface available being paneled to create electrical power.  Electrical power can also produce by photosynthetic wall panels which can be used in future commercial and residential construction. 

Become the World Leader in Underwater Sciences:

De-Regulating commercial and residential construction and becoming business friendly does present dangers to Hawaii’s fragile ecology and Hawaii’s limited amount of above water land.  The United States will not terrace farm Kualoa or Waimea Valley.  Despite being the widest east-to-west state in the Union, we are limited by available space above water and by ecological concerns preserving a fragile unique environment.  We therefore have to create more opportunity by going underwater.  Going underwater allows us to expand commercially and residentially by using all available space.  Expanding commercially underwater means underwater factories, underwater mines, fisheries, and underwater farms.  Farms and fisheries that can feed the state and reduce our reliance on imported food. 

Becoming a World Leader in Agriculture:

In order to further reduce the state’s reliance on imported food, I recommend that the state consider two things: (1) ensure compliance with agriculture land zoning; and (2) bring in high yield industrial agriculture to those plots.  Many of Hawaii’s agriculture zones are not used for agriculture because owners can make more money using the land for other endeavors.  Traditional agriculture has high overhead costs and low profits for basic subsistence crops.  Growing crops like marijuana for profit and not subsistence keeps Hawaii reliant on imported foods to feed our population.  This reliance makes us more vulnerable in times of crisis when our links to imported necessities are jeopardized.  Reducing the jeopardy means focusing on high yield subsistence farming that requires minimal space, minimal fresh water, and minimal overhead.  Such farming can be found in the Netherlands who like Hawaii is limited by available land.  Despite its small geography, The Netherlands ranks second only to the United States in global agriculture production and the Dutch achieve this feat by growing more per acre and by using less fresh water per acre than any where else in the world.

Becoming a World Leader in Clean Water Production and Distribution:

Fresh water is not a problem in Hawaii where on some islands it rains more than 400 inches per year, but it is a problem elsewhere in the world.  Here in Hawaii, we sometimes look at seawater as obstacle but we should look at saltwater as a resource.  Seawater can be desalinated with high pressure membrane reverse osmosis.  The resulting fresh water can be a Hawaii export to the rest of the world.  Desalinization creates briny salt by products that are a pollutant when dumped back into the ocean; however, briny byproducts from desalination can be recycled. Japan and the United Arab Emirates have partnered to create brine-based cement for use in construction.  Brine can also be made into other chemicals used in desalination itself.  Desalination requires large amounts of energy, however, together with Hawaii’s energy independence endeavors, the energy requirements can be both clean and enduring and will yield fresh water that further allows Hawaii to have an enduring supply of fresh water and an exportable product.

Becoming a World Leader in Shipping and Transportation:

Exportable products require distribution via land, sea, and air shipping and other transportation.  Shipping and transportation are especially expensive when an area is isolated far away.  Hawaii is often described as the most isolated population center on Earth so to get items to or to get items from here takes a lot of time and money.  Money for shipping equates to insurance, fuel, maintenance, salaries to crew, operate, stow, and handle cargo.  The money required is so expensive that primarily countries that have low wage standards are usually found to be the countries that flag commercial vessels.  Commercial vessels carry 90 percent of the world’s trade over the oceans.  There is a way for Hawaii to carve a niche into the commercial shipping business and that is to embrace automation and narrow artificial intelligence (AI).  Becoming a world leader in transportation and shipping automation and narrow AI reduces required crew members and associated overhead.  This reduction in overhead increases profit margins and makes transportation and shipping a more lucrative business opportunity for Hawaiians.  Hawaiians are historically ocean-going explorers.  Returning Hawaii to the sea in this manner, embraces the Island’s history and it enables Hawaii to transport its exports to Asia and the Americas without dependency on external shipping and transportation.

Becoming a World Leader in Medicine: 

Coronavirus this past year has demonstrated the medical importance of transportation in several ways.  Transportation was needed to bring purchased medical personal protective equipment manufactured in other countries to the United States.  Barring transportation to the United States was intended to slow the virus’ spread. Transportation throughout the United States enables the vaccination of the population.  Transportation from United States territories and the Compact of Free Association brought critically ill Coronavirus patients to the United States for treatment or transported health care professionals to those locations.  The United States’ medical system, as have all the medical systems around the globe, has been significantly challenged.  Hawaii’s medical system has been challenged and its vulnerabilities and shortages have been revealed.  A Jeffersonian approach to future medical preparedness can not only short up Hawaii’s medical systemic vulnerabilities but can provide a medical hub serving the remainder of U.S. interests throughout the Pacific.  An example of what Hawaii’s expeditionary medical preparedness could be was seen in December 2019 when Lieutenant Governor Josh Green and a team of Hawaiian doctors went to Samoa to help fight the measles outbreak.  Measles nor Coronavirus will be the last outbreaks that Hawaiians will face.  Preparing to face future pandemics presents an economic opportunity for Hawaiians to enhance the state’s economic resiliency and to increase the state’s wealth.

Immigration and Education Reform: 

Hawaiians and outsiders have historically attributed the state’s wealth to being the land, but the real wealth of Hawaii is found in the people.  The people in Hawaii are diverse already but they stand for greater diversity.  This greater diversity cannot simply come from the mainland United States but should appeal to the smartest, most driven, and most hopeful people throughout the world.  Overcrowding certainly is a concern when you open the doors wide open, but do you want the best and brightest the world has to offer living in and working for another country or another state, or do you want the best, brightest, and most driven talent living in and working in Hawaii?  If there is no opportunity for freedom and wealth in Hawaii, no matter how beautiful the land is, people will not want to come here except but to holiday.  Wealth opportunities in Hawaii can also be enhanced by educational reforms and enhancements.  Deregulated enhancements and other incentives enable research, development, and experiments to occur readily here in Hawaii.  Other incentives would enable successful research, development, and experiments to be lastingly implemented throughout Hawaii.  We also have to revisit and question the incentive behind getting a 4-year college degree if doing so produces a graduate with no real skills sets.  Skills sets that will be immediately needed if a Jeffersonian approach to the Hawaiian economy is undertaken might be: medics, transportation specialists, farmers, artificial intelligence technicians, and electricians.  Quite possibly none of these specialties require 4-year degrees. 

Conclusion:

A Jeffersonian Republican approach that makes Hawaii business friendly best prepares Hawaii to build independent economic wealth and removes our dependency on the state and federal governments.  Should we retain our exclusive Democratic Federalist approach, we will perpetuate our dependency and remain slow and ineffective during dynamic, fluid challenges that face our state in the future.