On Politics
By Richard Borreca
Sunday, October 28, 2001
SEIJI Naya, director of the state Department of Business, Economic Development and Tourism, looks at the numbers and hopes he isn't right. 2 sides differ on how
to fix economyAcross Richards Street, on the fourth floor of the Capitol, Rep. Calvin Say, speaker of the House, stares at his own figures plugged into a spreadsheet. The view doesn't get any better.
At 49, with 25 years in the Legislature, Say doesn't rattle easy. Naya, a former amateur boxer, the former chairman of the University of Hawaii Economics Department and a consultant to several international economic organizations, also doesn't flinch.
The data about Hawaii economic crisis show a picture that is scaring both men, but they are at opposite ends of the solution.
"I see unemployment rising again; the numbers are not going down," Naya says after leaving the Capitol for an afternoon visit with Gov. Ben Cayetano. "The governor is very unhappy."
After asking for a pledge to spend $1 billion for state construction and decisive action to spur the economy, Cayetano looks at the legislative action as if he had just been handed a plate of 2-day-old rice for dinner.
"The governor wanted it to be much more," Naya explains.
Say is the reason why there is not more money to spend. You just don't spend what you don't have, Say argues.
The former five-time House Finance Committee chairman knows his budgets and is expecting trouble.
According to Say's spreadsheets, the money just isn't there. The money was just barely there before Sept. 11 and now it is just gone.
Say looks at the state budget while Naya looks at the state economy.
Naya, who confesses to being a recently converted Keynesian economist, wants the state to spend money to stimulate the economy.
Naya predicts the Waikiki layoffs are just the beginning.
"Initially it is Waikiki, but eventually we will see it in the rest of our economy, the layoffs will spread to other nonvisitor industry sector," he says.
Say and Naya both watched the 1991 Persian Gulf War trigger a recession and it took Hawaii nearly eight years to climb out. They saw the visitors from Japan stop coming. They saw the local real estate market implode, bankruptcies soar and Hawaii's bright and talented grab the Samsonite and catch the red-eye out of town.
Naya fears it will all happen again.
His worries are countered by Say's memory of past bad times.
Say recalls the state taking a $500 million surplus and spreading it over so many programs that by the time Cayetano took office in 1994, the state was flat out of money.
Say can see that happening again.
In Say's mind, the day of reckoning is Thursday when the state Council on Revenues meets to assess the damage done by the 25 percent drop in visitors and the more than 17,000 new unemployed.
Say predicts that Hawaii's economy will go from a positive growth rate to minus 1 percent.
That minus 1 percent means if the state doesn't shut off the spigot now, it can expect deficits of $160.5 million, $167.9 million, $175.6 million, $186.6 million, $195.6 million and $208.1 million in the fiscal years 2002-2007.
If you spend more money now, in the hope that high unemployment is caused by low consumer spending and can be treated with government spending, you side with Naya.
If you think the state isn't going to have enough money to spend and you better start cutting back everything, you agree with Say.
Overriding the concerns of both Naya and Say are those of Cayetano, who last week was asked if he would use his possible new emergency powers to override state law to seize the Ala Wai Golf Course for a new park.
"Golf? I am just trying to feed people and make sure they keep their jobs," he said.
The state's course may not be Keynesian or conservative fiscal policy -- it may just be simple survival.
Richard Borreca writes on politics every Sunday in the Star-Bulletin.
He can be reached at 525-8630 or by e-mail at rborreca@starbulletin.com.
