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To Our Readers
WHEN does one rock's rolling down a hill cause a landslide? When does random audience clapping become rhythmic? When does freezing water suddenly turn to ice? Economists call such moments of sudden change "tipping points." Tips from
a Forbes editorTim Ferguson of Forbes magazine says the California economy, and perhaps the nation's, is at a tipping point. On the day the stock market posted its third worst fall in history, he was telling Hawaii publishers that recent market contractions are impacting his home state the way the Japanese balloon's bursting thumped Hawaii.
Owning stocks that were reasonably priced when the Nasdaq index was at 5000 made people feel well off. By Thursday, when the index was bouncing off 3000, folks were seeing things in a new light. It's as if the price of your house went from $500,000 to $300,000 overnight, Ferguson said -- an all-too-familiar feeling to us here.
Climbing oil prices, strife in the Middle East, over-investment in some market sectors and serial earnings disappointments have left investors teetering on the brink. People who are invested and borrowed to the max might soon go over the edge, he predicts.
Acknowledging Forbes' coverage of Hawaii in the 1990s that characterize it as a "People's Republic," Ferguson admitted, "We've left our mark here, for better or worse." The good news is that the magazine's "Best Places to Do Business" project no longer lists Hawaii in its "Bottom 10." The bad news is we've moved from next to last only to 11th from the bottom.
Hawaii's challenge is to overcome the high costs inherent in our mid-ocean location and our dearth of space. Ferguson sees opportunity for us in biotechnology -- especially genetic engineering of agricultural products, for which China might become our best market. "Don't get too picky, Hawaii," he advises.
In the meantime, the Hawaii tourism industry could well emulate the dynamism of Las Vegas, where there is a willingness to push the frontiers, tear things down and rebuild, not just redecorate.
Sounds like he's been talking to a local golf-course redeveloper, Ben Cayetano.
John Flanagan is editor and publisher of the Star-Bulletin.
To reach him call 525-8612, fax to 523-8509, send
e-mail to publisher@starbulletin.com or write to
P.O. Box 3080, Honolulu, Hawaii 96802.