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With the adjournment of the Legislature last week, elected leaders at the Hawaii Capitol have ended an overhyped session with very little to show for themselves.
While the top campaign issues of 2018 revolved around assuaging worries over the housing crisis and the souring economy, the Legislature missed a vital opportunity in 2019 to work together to address these matters.
Last year, fears of an economic recession were running high because at the time, the Federal Reserve had gone into quantitative tightening with the raising of interest rates to prevent inflation from almost a decade of quantitative easing.
After multiple plunges in the stock markets, President Donald Trump’s political pressure on the Fed caused the central bank to taper off to a more dovish money policy, which in turn delayed a recession.
People might assume this means the good times are still on, but as the Austrian economist Ludwig von Mises famously warned, “there is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
As schoolchildren know from the classic fable of The Ant and the Grasshopper, the time to prepare for scarcity is when there is still abundance. For the moment, Hawaii has experienced an economic slowdown – not yet a recession – but our local and national economy is running on borrowed time, as even the State Council on Revenues has reported that “the growth of Hawaii’s economy has declined from the previous year.”
Much like Aesop’s grasshopper, legislators approached this last session as if times couldn’t have been better. Instead of zeroing in on ways to grow the economy, reduce the cost of living, help lower the cost of housing, or even make energy cheaper for locals as a buffer against hard times, Hawaii elected officials wasted an entire session pushing non-essential priorities and controversial bills.
Instead of winning the public’s trust and mobilizing the community to work together for solutions, the Legislature further alienated and agitated locals with outrageous ideas that made people cynically believe the system was rigged against them.
From attempting to raise the legal age for cigarettes to 100 years or older, to proposing a special fund that would be paid for with pornography, to resurrecting red light traffic cameras, Hawaii’s Legislature made national headlines and caused local headaches with one bad bill after another.
At this rate, there needs to be a workplace safety sign in front of the State Capitol that tells people how many days have passed since the Legislature embarrassed Hawaii – the current number to read, “Zero Days.” But the good news is, they did make it easier to run for office or re-election, if you have a political axe to grind next year.
The Legislature took a police state approach to 2019, ignoring opportunities for growth and treating the public like children to be managed rather than citizens to be empowered.
Drowned out in all this were also some of the best ideas that would have made a significant impact for Hawaii. The Legislature ignored tax fairness measures like House Bill 231 which would have pitched tax credits to persons making less than $60,000 a year, a demographic which constitutes the bulk of Hawaii’s middle class and young professionals. Senate Bill 579, which similarly sought to increase tax credits, languished in the House Finance Committee.
Opportunities to raise state revenues with less regressive means like a lottery or legalized gambling were a dead end. The Legislature moved to decriminalize marijuana and made it easier to transport medical cannabis, but stopped short of providing the means for building the economy and helping revenue collection with taxed and regulated recreational marijuana.
As a former staffer to both Democrats and Republicans at the Legislature, I get it that not every bill can be passed, but leadership is all about setting priorities. The people of Hawaii got lip service this last session when it came to helping them in their time of need.
What Hawaii needed more than anything else this session was for the Legislature to make it easier for locals to make money, save money and turn around and invest that money. Instead, the Legislature took a police state approach to 2019, ignoring opportunities for growth and treating the public like children to be managed rather than citizens to be empowered.
Prices are rising faster than locals can make money. Consumer debt is increasing, which means people are using credit cards more and more to pay for basic necessities. The local housing crisis is a growing demon that cannot be ignored much longer.
Hawaii’s ongoing exodus of families to the mainland shows that many locals have, even in the absence of a full-blown economic crisis, lost confidence in our state’s future. While a major recession has not yet touched Hawaii, the signs are clearly abundant that the time to prepare for greater economic trouble was this session, but we blew it.
There may still be time in 2020 to approach, more aggressively, the policy work of helping Hawaii residents survive today and prepare for the future. Let’s hope for the Aloha State that our legislators learned their lesson this year.
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