Capitol View

By Richard Borreca

Wednesday, July 1, 1998


Hawaii is exception
to national prosperity

HERE'S a new rationale for Hawaii: We can be the "yes, but..." phrase for stories about how the national economy's surging tide has lifted all economic vessels.

We have been discovered as the exception that proves the booming U.S. economy is not all powerful. By serving as the economic asterisk, Hawaii is getting new acclaim.

For instance, in the last three weeks, Hawaii's economy has been described as "stagnant and floundering" by The Economist, the state as a whole called "troubled by serious economic problems and weariness with the government's inability to reverse a downward slide" by The Washington Post and "flat and stagnant" by NBC News.

There's a worrisome side to all this unwanted attention.

The Economist is a small, opinionated British magazine, but it is read around the world by political and economic leaders. It is much better to have The Economist proclaim your economy "vibrant" than "stagnant."

Here's part of what it said about Hawaii:

"This is an expensive, highly taxed, highly regulated little dot on the Pacific."

As if to answer Gov. Ben Cayetano, who is laying blame for the economic crisis on the decline in the buying power of the Japanese yen, The Economist says: "Hawaii cannot blame all its troubles on Asia; it is also a lousy place to do business.

"Not only is the cost of living roughly a third higher than the American urban average, but government is far more centralised than in other states. The public sector unions are particularly powerful.

"The result is that Hawaii is 20 years behind other cities and states in wringing productivity gains out of its public workers."

So much for typical British understatement.

The Washington Post also thinks there's a government angle to the story:

"The Democratic Party of Gov. Benjamin J. Cayetano, unable to shift the blame, has begun to pay a political price for the stumbling economy in the run-up to November's election.

"Polls show that after four decades of uninterrupted control of the state house, the Democrats could lose the governorship," the national paper said.

In the Washington Post article, Cayetano tosses off his own vulnerability by saying you can't always worry about what people say.

"You can only be governor for eight years anyway, and if I'm not elected I'll walk away feeling pretty good about what I've done," the Post quotes Cayetano as saying.

When Forbes magazine last year slammed Hawaii, Cayetano said his first reaction was to ignore it.

"So I said, 'To hell with it, I waste so much energy on these things. I'm not going to do anything about it. Then I thought to myself, 'I better do something.' You know, the people of Hawaii aren't the sophisticated investors that you find on Wall Street.

"One of the things about us people here is we read something and we have such a parochial plantation mentality...We think something came from the mainland, it must have some substance or credibility."

THE good news for Cayetano is that both the Post and The Economist question whether parochial Hawaii will change leaders.

Many have become accustomed to the economic slide, says the Post. The economic misery is "plainly not painful enough to jolt Hawaii out of its love of the status quo," says The Economist. Perhaps that is why parochial isn't a perjorative in Cayetano's lexicon.



Richard Borreca reports on Hawaii's politics every Wednesday.
He can be reached by e-mail at rborreca@pixi.com




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