Hawaii's troubled economy
Price of Paradise · Hawaii Public Radio · aired 1997-05-11
Guests: Pearl Imada Iboshi (Chief Economist, State Department of Business, Economic Development and Tourism); Kathryn Bilkiss (Honolulu businesswoman); Charles Reppun (Waiahole Valley family farmer)
Duration: 1:04:58

[00:00:00] Randall Roth: Aloha, this is Randy Roth, host of the Price of Paradise Radio Show. We're sponsored by the Hawaii Community Foundation, an organization that encourages grass root efforts to improve the quality of life in Hawaii, and that administers charitable funds with efficiency and compassion. Today's topic is Hawaii's economy and we have four guests, each with a unique perspective and prescription. Pearl Imada Iboshi is DBEDT's Chief Economist. One of her statements in this morning's advertiser is that our economy must grow in order for us to maintain our standard of living. Charlie Rapoon is a Windward farmer who sees a link between growth in the economy and growth in the population. He believes constant growth means that sooner or later, all open space will be overrun. He says current economic policies are headed toward a dead end.
[00:00:52] Randall Roth: Kathy Bilkus is a small businesswoman who wrote in this morning's advertiser that Hawaii's economy is in great trouble and that it's primarily due to a bad business climate. She believes the legislature let us down again this year. We'll also be hearing from Larry Johnson, who is the Chief Executive Officer of Bank of Hawaii and President of Hawaii's Business Roundtable. Well, Pearl, you are the Chief Economist with DBEDT, which is a state organization. Uh, why don't you start this conversation by telling us what kind of shape you and the administration thinks the economy is in right now?
[00:01:28] Pearl Imada Iboshi: Well, we see economic growth as being very moderate for the next for the end for the next year, and then improving slightly for the next year after that. Overall, Hawaii has been in a very slow growth environment since the 1990s and we don't see a very rapid change from that. Okay.
[00:01:54] Randall Roth: So for many years after statehood, we had what many people considered rapid growth, 4 to 5% per year, and over the last few years, you've said it's been very slow, um, almost flat. Um, which is better? Uh, should we go back to 4 to 5% if we can? Is that the goal? Or should we try to maintain where we are, which is, I think you used the term moderate growth or is something in between, uh, the the direction that we should be headed?
[00:02:24] Pearl Imada Iboshi: When our analysis shows that a long run growth trend, just given what we know now, would be at about 2% real growth. Right now we're seeing closer to 1% real growth. And you know, I really believe that a 2% rate of growth, this is my own personal opinion, is is a sustainable rate of growth that if we try to push too fast and try to, um, go to the four and 5% rate over a long period of time, that would be a very difficult rate of growth for us to maintain, but a 2% real growth, um, on average, so you'd have ups and downs from that, would be a a very sustainable and rate of growth.
[00:03:04] Randall Roth: Okay. Kathy Bilkus, I think you described the economy as being a basket case in your article this morning. Uh, tell us a little bit more about you as a as a small business person. How it is that you're viewing the current situation and where you see us headed.
[00:03:20] Speaker 1: Well, as a small business owner who has been involved um for over 30 years in Hawaii, um primarily in um the real estate field, concentrating on providing quote, unquote affordable housing within the market, we find it very, very difficult to do business in Hawaii because of the climate, because high taxes and high government. And our focus is on not so much creating high rates of growth, but providing quality jobs, quality, um business profits and understanding that we need profits to sustain the way that we've come to want to live.
[00:04:13] Randall Roth: So how do we accomplish that?
[00:04:15] Speaker 1: Good question. We have to take real immediate action. Pearl was talking about um projecting rates of growth over a longer time. Well, small business doesn't have a long time to project. It's small business in Hawaii. It's probably over 95% of all business in Hawaii, and it's probably over 25,000 small businesses, and we don't have a long lifeline. We need some help now, and I'm not talking about government doing things for us. I'm just not I'm talking about taking the but it's a way for us doing for what we should be doing for ourselves.
[00:04:57] Randall Roth: So you need help right now. Give me give me an example of something that someone could do that would provide help to the small business community right now.
[00:05:06] Speaker 1: Um, deal with the privatization issue right now.
[00:05:09] Randall Roth: Okay, and that's this Kona opinion from a couple months ago, and we did a show several weeks ago on it. Bottom line on it is that it is more or less tying the state's hands and the city's hands so far as contracting out work that historically has been done by, uh, unionized government workers, which is a more expensive way of doing it as opposed to outsourcing. So you're saying if somebody could somehow deal with that, but the legislature didn't.
[00:05:36] Speaker 1: The legislature didn't.
[00:05:37] Randall Roth: Okay. Well, let's go to, uh, Larry Johnson. Larry, are are you there?
[00:05:42] Speaker 2: Good morning. Good morning. You're the, uh, Chief Executive Officer for Bank of Hawaii and this year's President of the Hawaii Business Roundtable.
[00:05:49] Randall Roth: That's right. Could you very briefly describe what the Hawaii Business Roundtable is and then give us your thoughts on our topic this morning?
[00:05:57] Speaker 2: The Hawaii Business Roundtable was formed about 10 years ago. We currently have, uh, 44 members and it's made up of the larger businesses here in Hawaii. In order to qualify as a member, you need to have at least 100 employees and uh and, uh, about 50 million annually in sales. And our main, uh, topics of attention are tourism, land use and and also reforming public education.
[00:06:21] Randall Roth: Okay. What do you think about, uh, the topic or what do the members of the Round Table think about our topic, that is Hawaii's economy and the direction that we seem to be headed?
[00:06:30] Speaker 2: Well, I the Business Roundtable would agree that the the economy here in the state of Hawaii has been stagnant since, uh, 1990 after more than 30 years of constant growth. The Business Roundtable believes strongly that, uh, that we we need to, uh, in order to to get the economy off dead center, we have to do what we do best and that is we have to improve the the quality of our of our primary product and that is uh that that is uh tourism. And, uh, we also feel we need to make uh some some big changes in in the way we we manage ourselves in terms of land use, and uh we also need to take special attention to the to the size of government.
[00:07:08] Randall Roth: Okay. Now can you give us an example what you mean about changing how we deal with land use?
[00:07:12] Speaker 2: Well, right now there there is a tremendous amount of duplication that goes on between both the state and the county. There's a lot of overlap uh there in what their responsibilities are in terms of zoning restrictions, in terms of controls, and it makes it extremely onerous on business uh to do business here. These are existing businesses or any or any new businesses that want to come to Hawaii.
[00:07:33] Randall Roth: Okay, and when you say look at the size of government, are we talking about dramatically reducing the size of government or something else?
[00:07:39] Speaker 2: Well, I believe we are looking at dramatically uh decreasing the size of government. Uh during during the boom years from 1959 to 1990, government grew uh at a very, very fast rate. And back in those days, I guess we could afford to do it because the state had surpluses every single year. We've reached a point now where we are bloated, and the the cost of doing business is a direct relation of the cost of government.
[00:08:02] Randall Roth: Okay. And so if if I've got it right, you're saying we need to reduce the size of government, we need to, um, change how we deal with with land use, we need to, uh, work hard on improving the quality of our primary product, which is, uh, tourism. Is that pretty much what the Roundtable is is saying?
[00:08:19] Speaker 2: Yes, and we also believe strongly that it's important for us to diversify. We feel there are great opportunities here in the state of Hawaii to improve the quality of our health uh healthcare, to improve our retailing services, to improve our educational opportunities, particularly at the University of Hawaii.
[00:08:33] Randall Roth: Okay. Larry, just generally, were you happy or unhappy with the work of this year's legislature?
[00:08:40] Speaker 2: Oh, I believe that they didn't attack some of the bigger issues, some of the bigger fundamental issues that have to be that have to be addressed. Uh there were a few minors uh small changes uh uh uh a few uh minor improvements that were made, but overall, I don't believe that they uh they really hit the mark.
[00:08:55] Randall Roth: Okay. Larry, can you stay on the line just for a while?
[00:08:57] Speaker 2: Sure.
[00:08:58] Randall Roth: Uh, we'll come back to you a little bit later in the show. Our fourth guest this morning is Charlie Rapoon. Charlie is a farmer on the Windward side of of Oahu. He operates a farm in the uh Waiahole Valley. Uh, many people will recognize Charlie's name as uh someone who's been very much associated with water issues, especially over the last few years. Charlie, can you hear me all right?
[00:09:18] Speaker 3: Yeah.
[00:09:19] Randall Roth: Uh, happy to have you on the show this morning. I'll bet you've got some thoughts to share based on what you've been listening to thus far.
[00:09:26] Speaker 3: Uh yeah. Thanks for for having me. Um, basically my point is that I believe we have a uh an economic system that's dependent on a growing population. And until we recognize that and see that we got to where we are today on the backs of a growing population, I don't think we can have a coherent vision of of where to go in the future. And I believe the evidence um is pretty clear that we are dependent on a growing population. Um, for example, it's often reported, you know, we look at visitor arrivals, and if visitor arrivals increase, that's that's um always considered good for our for our economy. So, my question is, how long can we survive with a with a kind of economy that is dependent on population growth. So in other words, we end up actually promoting population growth um for economic purposes. And sooner or later that ends up being a dead end.
[00:10:26] Randall Roth: Mhm. And uh Charlie, if if we set as our goal sustainability, which I guess would be no growth or or very, very small growth, uh is that something that you're saying would in the long run make us all happier? We'd have a higher quality of life? Or or do I have that wrong?
[00:10:48] Speaker 3: Well, I I think we need to distinguish um between the kinds of growth we're talking about. Um, you know, I'm talking about population growth and and the comments that I've heard today are talking about economic growth. Um, but often they end up being the same thing. And I think, you know, unless our our ultimate goal is a stable population and surviving with a stable population, then then of course we're going to be we're going to be in trouble.
[00:11:16] Randall Roth: Charlie, as I read your piece in the paper this morning, I got the impression you felt that they weren't just often linked together, that they were inextricably tied together, that in order to have economic growth, there was going to be population growth, and vice versa. Did I get that wrong?
[00:11:33] Speaker 3: Yes, no, that that I believe that that's correct. Um, unless, you know, there's so many people who are tied up in uh, you know, the construction industry is what I see as the key to this thing. There are so many people directly and indirectly that are tied to that that what happens when our population growth starts to slow is that all of those people that are directly or indirectly tied to that industry, um are now in a difficult position, um because they they can't earn the income that they that they were earning and they can't uh keep themselves going personally. Um, so then what happens? And and I think they either move away or or we end up with a lot more government problems trying to deal with those people's problems. And it seems to me that that the construction industry and and indirectly and directly is really the key to this thing. And so much of our economy is dependent on that that when our population growth starts to slow, then we're in trouble.
[00:12:35] Randall Roth: So Charlie, if I understand correctly you're saying that the 4 or 5% per year growth in in past years was a bad thing, it created a boomtown sort of situation, and you would acknowledge that people are suffering right now, but they're not really suffering so much because the economy is flat. They're suffering because we've been this boomtown and we're now in the aftermath of that?
[00:12:57] Speaker 3: Right.
[00:12:59] Randall Roth: Okay. Charlie, can you stay on the line? Yeah. Okay, I'll be coming back to you in just a bit. Pearl, um with DBEDT, the Department of Business and Economic Development and Tourism, uh any reaction to what you're hearing from from Charlie or from Larry Johnson or Kathy Bilkus?
[00:13:14] Pearl Imada Iboshi: Well, I agree that the growth, the slow growth now, um is extremely painful, especially because there was such rapid growth in the earlier period that people had built up expectation and size of industry um to sustain their rapid construction that was taking place because of the very large investments being put in by the Japanese. And with that stopping, virtually stopping, that really has um caused a great deal of pain and dislocation. And I really think that we do have to adjust to a slower growth environment. And part of that also means looking at our regulations, which were formed really to take to slow growth in a high growth period.
[00:13:56] Randall Roth: Okay. Kathy Bilkus, any thoughts?
[00:13:57] Speaker 1: Yes, I um it it is a continual um effort to balance growth with sustainability, and growing um communities in the mainland are are dealing with that um like Portland uh now, and they are important issues, and we have to to deal with it effectively to take the consideration that the the chances of going back to a four or 5% growth are probably not going to happen in Hawaii for some time.
[00:14:28] Randall Roth: But should that be the goal? Should be should we be trying to have as much economic growth as we can possibly have, or should the guiding star be something uh smaller in terms of a projected growth rate?
[00:14:41] Speaker 1: We should be more realistic. Um, we should be more realistic that growth is good, um but not to generate on purpose a boom and bust cycles.
[00:14:53] Randall Roth: Okay. Well, you're listening to the Price of Paradise Radio Show. My name is Randy Roth. Today's topic is Hawaii's Economy. If you would like to ask a question or make a comment, just call us at 955-8821. If you're on a neighbor island, the number is 1-800-955-8821. Our guests this morning are Pearl Imada Iboshi, who is the Chief Economist for the State Department of Business, Economic Development and Tourism. It's often times called DBEDT. Kathy Bilkus, who is with the Howard Bilkus Company, a small acquisition and development company doing business in Hawaii for over 30 years, with a mission of providing affordable housing within the market. Charlie Rapoon, who is a farmer from the Windward side of Oahu. He operates a farm in the Waiahole Valley, and Larry Johnson, who is the CEO of Bank of Hawaii and President of the Hawaii Business Roundtable.
[00:15:47] Randall Roth: Again, if you would like to ask a question or make a comment, our number is 955-8821. Well, um let's see. Charlie, are you there?
[00:15:58] Speaker 3: Yeah.
[00:15:59] Randall Roth: Charlie, you just heard a few more comments from Pearl and Kathy and so while we're waiting for the lines to fill up, which will happen very quickly, uh any additional thoughts?
[00:16:08] Speaker 3: Um, yeah. I guess I would have ask this question of both Pearl and and maybe all three of the other people, Larry Johnson too. Um, my question is, can we have economic growth without population growth?
[00:16:23] Randall Roth: Okay. Real quickly, let's start with, uh, Pearl. Can we?
[00:16:29] Pearl Imada Iboshi: Yes, but it's um but you're right that population growth does fuel economic growth.
[00:16:36] Randall Roth: Okay. But it's possible to have, uh, one without the other.
[00:16:39] Pearl Imada Iboshi: Yes.
[00:16:40] Randall Roth: Okay. Um, Larry Johnson and Ryan, I don't know if you can plug Larry in for me. Larry, did you hear, uh, Charlie's question?
[00:16:47] Speaker 2: I believe the question was, how can you have economic growth without population growth?
[00:16:51] Randall Roth: That's the question.
[00:16:52] Speaker 2: Well, uh I think a good example of what we're facing with, uh, facing today and that is the the high unemployment rate, uh, particularly in the construction industry here in Hawaii. And I believe that if we had an improvement in our economy, uh, it would put these people back to work, and that that won't necessarily mean that the that the that the the the population will be growing. We can certainly use our existing population to support more growth in our economy.
[00:17:18] Randall Roth: Okay. Uh, let's go back to Pearl.
[00:17:21] Pearl Imada Iboshi: Well, the other thing is that we're not an isolated economy that we don't have to to buy everything that we produce within ourselves. I mean we can export and that also can provide for economic growth.
[00:17:32] Randall Roth: Okay. Kathy Bilkus, then we're going to start taking callers.
[00:17:36] Speaker 1: Well, if the economy, our existing economy is able to improve, we can get our own people back to work and we can grow our economy with without necessarily increasing population from from other places.
[00:17:57] Randall Roth: Okay. So what I'm hearing from Pearl, Kathy, and Larry is that they feel the answer to Charlie's question is, yeah, it is possible to have economic growth without necessarily having population increases. Let's let's go to, uh, our callers. First, Lloyd from Waikiki. Lloyd.
[00:18:14] Speaker 4: Yes, aloha.
[00:18:16] Randall Roth: Aloha.
[00:18:17] Speaker 4: I'm, uh, this is a question and also a comment, I guess. Um, our organization, uh, just, uh, yesterday went to the, um, airport with 40 students from Monoloa High School and we gave out plumeria blossoms to about 3,000 people coming off those planes. Um, and we've had very good uh reaction from that. And I'm wondering I never hear people say anything about trying to bring the Aloha spirit back to the islands and to the tourists, because tourism is our most important, uh, as they say, product, then we should help to make it more uh Aloha spirit when they arrive here. We spend so much money on advertising and promotion and no money.
[00:19:00] Speaker 5: is no money or at least I've asked them for money for t-shirts for our organization and they don't have money for this. They don't have money in the um, anywhere in the state budget for projects of this nature. And I think we need more money to bring the spirit of aloha and then I think our tourism will improve by the quality of people that come here rather than these cheap tours that are coming in now. That's why it's going down. And then again you've got a real problem with these big department stores that are just these big stores that have open. This is going to hurt a lot of those small businesses when you have those big K uh Costco and so on. That type of thing. Okay. And also on that, I think no more development on any anything of what we've got. We've got enough acreage already zoned out in the Ewa side to do quite a bit of development out there. We don't need anymore anywhere else when that's filled up, fine, then let's look at some other area.
[00:19:52] Speaker 6: Okay, Lloyd, we appreciate your comments this morning. Aloha. I'm going to move on through some additional callers and then we'll go to our guests and get their thoughts on on what they're listening to. Let's go to Donald in Honolulu. Good morning, Donald.
[00:20:04] Speaker 7: Good morning. Uh I wanted to share something in relation to our expertise in culture and languages in Hawaii. The caption TV technology has up to four different languages that can be captioned and four different text windows and we'd be able to caption in different languages and have worldwide reading channels, just like uh uh Turner started worldwide news channels, 24 hour reading channels. That would bring in income from all over the world, it would give people a reason to come to Hawaii, could be tied into our courses in our universities and so forth. People could come here and take their proctored exams or uh visit Pearl Harbor as part of our history course, whatever, and it would generate a lot of income without necessarily building additional uh uh you know people on the islands and then the construction area, we could maybe finally do things about mass transit or whatever other areas that we need to support uh our our own existence and transportation and so forth here and still keep then the construction jobs. And if we don't do this, uh people will go to other places to practice the languages that they're going to be learning on the caption TV and uh so that could go to Mexico for Spanish or Spain or Quebec for or Tahiti for French and so forth. So I think it'd be protecting our own tourism tourism industry to do this. Otherwise we could take a tremendous hit in tourism as all the tourists then went to other ways to practice these languages they're learning on the caption TV.
[00:21:33] Speaker 6: Okay. Donald, we really appreciate your comment this morning. Just as soon as someone gets off the line, someone else is on, and so I'm going to try to move through a number of callers before we go back to our guests. Next, we go to Martha from Hawaii Kai. Good morning, Martha.
[00:21:45] Speaker 8: Good morning. Um I would like to talk about two things: one, sustainability and the other is around table. Uh on sustainability, this is something that is everyone's responsibility and the and its responsibility is not to take out more of from our um environment and our people resources than we put back. It's a matter of balance and um equity. And with the round table, this is a 50 million dollar requirement. You have to do $50 million worth of business to be a member and this means that 50 million dollar people are talking to each other but we should all be talking together. And I would like to see the round table open up some of their con uh conversations with the population at large.
[00:22:32] Speaker 6: Okay. Martha, thank you for your call. We go to David on Maui. Good morning, David.
[00:22:37] Speaker 9: Uh good morning, aloha. Randy, I appreciate your show. It's wonderful and enlightening very much. Um my comment is that we can have sustainable profit without growth, very simply, by converting the sugar industry into the hemp industry, using industrial hemp to solve all of our personal needs uh within the global context and we can export it and improve our environmental quality as we do that.
[00:23:11] Speaker 6: Okay. David, thank you for your call. I'm I'm sorry, I've got to move on just because we got so many people and I want to give everyone a chance to to uh at least say something. Let's go to George from Manoa. Good morning, George.
[00:23:23] Speaker 10: Good morning. I noticed that uh none of your guests uh uh used the word money until the first caller and yet money is what they're they're talking about. I'd like to hear there's a guy from the bank talk about money. I'd like to hear the DBED talk about money uh because it goes money goes from the taxpayer to the government, to the big banks, to the construction industry with a lot of things ripped off along the way. So how about some words about money from uh your uh four guests?
[00:24:03] Speaker 11: Good morning. Uh just an observation, uh uh on some of the comments earlier uh your your panelists have made. Uh there was a reference to uh uh control of population and I'm just curious as to what mechanisms might exist in order to achieve that, uh you know, practically within uh the political system that exists at this point. Okay. Uh and and further, uh I think the idea that was raised about the Aloha Spirit, uh it is a good point, uh but the curiosity that I have at this stage is is how that might return when when people such as the business round table and and the process itself is pretty much a top-down process set up to uh allow more or less allows the outside interests to come in and exert influence to a greater extent than people in local communities. Uh unless they really rise up uh such as the folks in Waiahole have done on some of these issues. So the controls uh and the process seem to uh focus on what the this last comment uh the gentleman commented that he wants to hear about money. Uh while I think money is important, I don't and that is uh the economics of this issue are really critical, uh I I'm quite concerned that uh this is a lot more, it's about a lot more than money uh that that we're dealing with in these issues here.
[00:24:22] Speaker 6: Okay, and I'm going to ask all four guests to comment on all of the comments that they're listening to, but I've got some more people that I'm going to get to before we do that. Next we go to Dave from Kailua. Good morning, Dave. Okay. Dave, thank you very much. Appreciate your uh participation. We keep going and and I'm going to ask the people that I I go to in the next few minutes to try and keep it real short because we've just got a flood of calls coming in. Let's go to Lisa from Maui. Lisa, what do you have for us?
[00:25:52] Speaker 12: Um I wanted to get the uh whoever is um uh listening, the telephone number for a very interesting group in Washington DC called Carrying Capacity Network. Their phone number is 1-800-466-4866. One of the points that they make that I think is um of apropos for your comments today has to do with the fact that they believe that um or it's been shown that instead of population size increasing, uh uh reducing the cost of living, uh a taxpayers pay more for public services if with with the larger the population. So uh that is the a related point. Thank you.
[00:26:32] Speaker 6: Okay, thank you Lisa, appreciate it. We go to Steve from Palolo. Good morning, Steve.
[00:26:34] Speaker 13: Good morning. I'm a bit bewildered by the comments about the lack of cooperation between the government and the small businessmen, people particularly. I am looking for more substance to what these small businessmen are complaining about. You asked the representative of the small business group today for a specific suggestion on what is an example of what could be done to help them as all she could reply was privatization. Now, the the small businessmen have lived with privatization for years and it's only now that it's been challenged by the UPW that there's a possibility that it will be a eliminated. So what else is there besides privatization that the businessmen want? And secondly, uh on the question of more help for small business people, on page one in Hawaii, the Hawaii section of the newspaper today, we have a story about the water state getting a special break on a loan to build a parking edifice. Now, if that's not an example of the state helping business people, I don't know what is. So what are we talking about? They say let's get off get the government off of our back, but every time business people need help, they have no hesitation in asking the government to help. So what are we talking about? And how sincere are they?
[00:27:56] Speaker 6: Okay, Steve, thanks for your call and we're going to get an answer to that question and a lot of thoughts on the other uh questions that were asked and the comments that were shared in in just a moment. But I I want to remind our listeners, including anyone who's tuned in uh in the last few minutes that this is the Price of Paradise Radio Show. My name is Randy Roth. We're talking about Hawaii's economy. With me in the studio is Pearl Imata Iboshi, who's the Chief Economist for DBED and Kathy Bilkas, who is with the Howard Bilkas Company, a small acquisition and development company doing business in Hawaii for over 30 years. With us by phone is Charlie Rapoon, who is a farmer from the windward side of Oahu and Larry Johnson, who's the CEO of Bank of Hawaii and President of the Hawaii Business Roundtable. We've got some more people who are waiting to uh ask a question or make a comment and we'll get to them as soon as we possibly can, but we've got quite a bit to deal with first. Uh Larry Johnson, are you still there?
[00:28:49] Speaker 2: Still here, I'm about ready to run, but I'm still here. I know you have a commitment you've got to go to. A lot has been said over the last 15 minutes. Uh one specific question was why not open up the business roundtable so that uh other people know just what you're doing and why and all that sort of thing. But I'm sure there are some other things that have been said that you'd like to comment on as well. Okay, I'll go through this quickly. Uh first of all, the comment that Lloyd made regarding the Aloha spirit. Uh I believe that this is very, very important for us. It's one way we where we can differentiate ourselves from the rest of the world. The Aloha spirit is still there. Is it as strong as it was 30 or 40 years ago? I don't think so, but it's something that we is very fragile and we're going to have to pay very close attention to it. As far as Donald's comment regarding culture and languages, again, I feel this is a great advantage for Hawaii because of where we are, uh the proximity to the Pacific and to Asia and it is a an outstanding opportunity for for us to be able to to to capture and um and capitalize on those uh those abilities that we have uh have as a state. There was up to us First of all, we are not the chamber of commerce. Uh there there are chambers of commerce that have been established throughout the entire state and the the main purpose of the chamber is to represent to represent all forms of interest. Uh we do, though our we we are most willing to to talk openly about the the primary areas of concern that we have. Uh as far as the George's comment regarding money, saying that the there hasn't been any talked about money there hasn't been any conversation about money. What we're really talking about here is the economy and jobs and that we must have a strong every civilization in the world must have a strong economy because the the economy will will will provide jobs which will provide the money to be able to to to to to sustain ourselves. So it's just a very, very basic concept. And uh he also made the comment that uh that the government is ripping off people and the business is ripping off people. I don't think anybody is intentionally ripping off anybody. It's we're all out there trying trying to do the job. Uh Larry, can I ask you a question? Sure. Uh there is and I I think it's just at the stage of an unsubstantiated rumor that Bank of America is leaving Hawaii. Is that something that you're in a position to talk about? Uh no. Really all I know about what is what I read the papers. If it's true, isn't that uh or is that a bad sign that uh a very large company like that would decide that the Hawaii economy wasn't something that was was going to be attractive to them in the future? Well, I know that one of the reasons why Bank of America is concerned about the operation here is because the economy has been flat over the last uh four or five years and then they are concerned about our future. Uh fortunately though I think that if if they are to leave, it appears that there are some local financial organizations that are willing to step up and and um and to to maintain the business relationships that they have. Okay. Any additional thoughts you'd like to share with us, Larry, before you run to your meeting? Yes, well, just just just one primary thought and that is that in order for us to get out of the doldrums that we're in, it's going to take some collaboration. It's going to take everybody working together. It's not business to solve business isn't out there to solve all the problems and government isn't uh isn't out there to do the same. Uh business and government and labor and the entire population has to get together and and and work towards the common goal. There has to be a vision created. Uh some some shining star, if you will, that we can work towards. We've got an outstanding state. We have uh we have a wonderful history, we've got a great future. When you look at where we are in the middle of the Pacific and you look at how unique we are, we've got some wonderful opportunities. And I believe that we can do that by still maintaining the quality of life that we all love here in Hawaii. Larry, do I hear correctly that that you feel we don't yet as a state have such a vision? Well, we're working on it and we're making some I believe some good progress. I also believe that the that that government is uh is being much more cooperative in terms of trying to to to assist business. I believe that they are starting to get the message but we have a long ways to go. And I also believe that uh there is this collaborative effort that's starting, just starting to gel between business, government, and labor. Okay, Larry, thank you very much. We appreciate your participation.
[00:38:00] Speaker 5: with um government We um in our industry, I know we have sat down with um both the state and the and the city governments to to help us um streamline processes and try to eliminate regulations that are not necessary. Uh and we've got a lot of work to to to to go. I we do but there's been a lot more awareness but specifically it's the business climate and I want to address the fact that people should know that profits are a good thing when businesses make profits and money, that's what fuels our economy. That's what provides us with the goods and the services and the government that we have come to love and respect and value.
[00:38:43] Speaker 5: And without that, we become a more socialistic society, and I think that that's what that small businesses are being strangled. We are overregulated and we can endure more taxes. We need incentives to create profits, and we can do this. We can collaborate, we can discuss, and we need to pull in unions and government and businesses both small and large to help us work together, but we have to all understand that profits are good things.
[00:39:18] Speaker 6: What about the uh the one caller who commented that uh Ward was given a loan or guarantee or or some sort of benefit, I didn't see the article in this morning's paper. Uh what about that?
[00:39:29] Speaker 5: I read it quickly and so I only know what was in the newspaper, but my gut reaction is that if it doesn't cost the taxpayers anything because of bond insurance, then it's a good thing, it's going to create a couple thousand more jobs for our state. And what we understand is it's not just the jobs, but it's the multiplier effect that those jobs have on our economy, that it just got a couple thousand jobs will pump a lot of dollars where we need it. Um I don't know like I said anything more about that was in the newspaper, but that's what we really need more of is government collaboration. Now, you may wonder why it's not done in the the the borrowing from the um private sector.
[00:40:24] Speaker 5: Well, the amount charged by lending institutions to private depends on the risk and the reward. And so in our business climate, money is high right now. It's it's it's very much lower in the mainland than it is here because of of the risk and the reward.
[00:40:41] Speaker 6: Okay. Charlie Rapoon, our Windward Farmer, you're still on the line, I believe, Charlie.
[00:40:45] Speaker 14: Yeah.
[00:40:47] Speaker 6: Um look, we get some background there, Ryan. Charlie, um you heard a lot of callers ask questions and make comments and you've heard uh Larry Johnson and Kathy Bilcus comment on all of that. Uh want you to take a couple minutes just to share what you think are your most important thoughts right now.
[00:41:01] Speaker 14: Okay. When uh when both Pearl and Larry say that uh a growing economy is possible without a growing population, um I believe they're flat out wrong. And I believe that they're not that they're doing people a disservice by not telling them the truth of what they're really trying to do. I'd like to see them actually come up with a blueprint for how we can have a growing economy without a growing population. For example, the bank the Bank of Hawaii um praises uh the lengthening of the runway in Kona so that that will have a um there will be a spillover of tourists to Maui and that's good news because that increase in tourists will attract private developers to come in and build more hotels.
[00:41:44] Speaker 14: You know, everything that they're doing is geared towards increasing the number of people here. You know, the state, everybody, the private sector, they're all calling for an increase in the number of tourists. Pearl talks about a doubling of our tourist population. My question is always, what happens after that happens? You know, then what generates your economy? You know, if we build this parking structure for uh with the idea in mind that it's going to provide jobs. Okay, once that parking structure is done, then what do those workers do? What job do they move to next? I mean it's it's appropriate that we're talking about this on the day that they're having a run on H3, because in large part H3 was built in order to provide jobs.
[00:42:30] Speaker 14: And now that H3 is built, where do those workers go? It seems to me that that you know, to say that oh yeah, we can have a growing economy without a growing population, well I'd like to see uh see them actually explain how that can happen. And I'd like to see it reported a lot differently in the paper then. If it's since since we only report increase in population is good.
[00:42:54] Speaker 6: Okay. You know Charlie, something else I want to ask you about is um that I think your position is that both the city and the state officially or at least are on record as wanting to restrain population growth and yet you're saying despite these these official policies, they're just winked at.
[00:43:16] Speaker 14: Well, our official policy is to balance immigration with out-migration and to control population by uh doing things, you know, by looking at social, economic, legal, and environmental controls. For example, if you restrict the amount of water for urban development, clearly you're going to that's going to have an impact on population. Um but what ends up happening is they say, well, uh our we have to we can't do anything about controlling population. We can't stop people from moving here. So therefore, what we have to do is accommodate it and only direct where it goes. But in actuality, the real policy is that we have to promote it. For example, they're they're saying, well the growth in Ewa um and Central Oahu is not happening fast enough.
[00:44:06] Speaker 14: That's that's a cause for concern. So um both state and city are looking at ways of jumpstarting that that building economy. So I think that that is our real policy is to promote population growth, because we don't know what um what the industry would look like with a stable population.
[00:44:25] Speaker 6: Charlie, one more one more question then I I'm going to ask Pearl to comment on all of this. How do you propose that we keep population down other than by making it unattractive for people to live in Hawaii, people to come to Hawaii? How do we keep population down?
[00:44:41] Speaker 14: Okay, for example, let's look at agriculture since that's the sector I'm most familiar with. Um I believe that that we could actively promote small family farms and that we could attract people to do that, and that that is a long term form of agriculture that would um help to stabilize our population. But instead, what we're doing is we're promoting a continuation of agribusiness, which the sugar industry was. And that kind of agribusiness basically provides um backbreaking low paying jobs, and and people are just not attracted to that. We end up with wave after wave of immigrants coming in to do that job, and we have to go out and attract them. What's happening in agriculture now is that they're going to to Southern California and to Mexico to attract workers.
[00:45:33] Speaker 14: So now we have large numbers of Mexicans coming in to do those wages, so another wave of population has to come in and do that kind of agricultural work because we don't promote small family farms.
[00:45:47] Speaker 6: Okay. Charlie uh stay on the line, I'll come back to you one more time at the end of the hour, but we now go to Pearl Imata Iboshi, the Chief Economist with DBED. Pearl, what do you think?
[00:45:57] Speaker 15: Well, I believe that the question is, um are we at a position now where we have a population size that we cannot support, and I don't believe that's true. Um I I guess the question is as we continue to expand, um when do we get to that point, and I believe that that's something we really have to seriously consider. And that part of the reason that DBED does its projections for the 25 years, although it's a very dangerous thing to do because you really don't know what's going to happen, is is to say if things go as they go now, this is how many people we're going to have, can we handle it? And if we want to handle it, um and what can we do to change um change the trend if um if we if this is not the reality that we want to happen.
[00:46:42] Speaker 15: So I believe that planning is is critical um and that now is the time to start really looking at some of these issues. And some of the can I move on to some of the other issues?
[00:46:52] Speaker 6: Mm-hmm, please do.
[00:46:53] Speaker 15: Um on the Aloha spirit question, um I think Hawaii is in a unique situation because of the importance of tourism to Hawaii that we really have to count we really have to make sure that the environment is is that we stay beautiful otherwise people won't come. Um that we have the culture, um cultural aspects here because that's what makes us unique and therefore, we can't have economic growth without culture without maintaining the culture, without maintaining the environment. And therefore, that any kind of economic growth that we have really has to take into consideration all of the maintaining all of these things and part of the reason that DBED has begun this cultural tourism um grants is to do that is to help small groups start up um little projects um which promote culture um and um activities um which would enrich our own lives as well as the um give activities additional activities for our visitors.
[00:47:56] Speaker 6: Okay. You're listening to the Price of Paradise Radio Show. My name is Randy Roth. We're talking about Hawaii's economy with me in the studio are Pearl Imata Iboshi from DBED and Kathy Bilcas, a small businesswoman here on uh Oahu. By phone we've been listening also to Charlie Rapoon, a windward uh farmer, and Larry Johnson, the president of the Hawaii Business Round Table. We've got uh three people who've been waiting a long time very patiently on uh on the line and we're going to for sure get to them. I don't think we'll have time for for any other callers, so I'm not going to give you the number again. So let's go to Wally from Kaimuki. Wally, thanks for being so patient.
[00:48:35] Speaker 16: Uh thanks Randy. Uh I had an idea about how we could increase the economy without increasing the population. Um and this is uh to adopt some of the policies that exist in Amsterdam and California. In Amsterdam they attract the millions of tourists by selling marijuana products to uh tourists and uh residents in an effort to fight the hard drugs. And in California of course, they passed the proposition to allow the doctors to prescribe the marijuana for the sick people. And uh I noticed that uh um Law Lawrence Johnson uh had mentioned the year 1990 as sort of the swing year and uh Charlie Rapoon also mentioned that in his article in 91 how things have been changed since that time.
[00:49:19] Speaker 16: Well, in 1990 was the year that uh the federal government bragged about how Hawaii became the first successful state in marijuana eradication and we uh decimated the marijuana industry from what was uh estimated to be a 10 billion 10 billion, not million, but 10 billion dollar industry in Hawaii in 1989 and was less than 10% after they uh came in with this operation wipe out.
[00:50:06] Speaker 6: Okay. So legalize uh marijuana use and that would have an improvement on the economy without necessarily increasing population.
[00:50:28] Speaker 16: Right, and the hemp too, for the clothing, and the paper, and the fiber, and the food.
[00:50:32] Speaker 6: Okay. Well, I appreciate your call. We go to Steve from Waikiki. Good morning, Steve.
[00:50:38] Speaker 17: Good morning. A very quick and specific question. I want to key in on something that your small business person said about the multiplier effect, and take it into another area because we've been talking about business and labor and um government. Uh Governor Cayetano campaigned for office, one of his slogans when he first campaigned for office, one of the many which he didn't deliver on, was he said, um, higher education was a key to Hawaii's economic future. The minute he got into office, he started cutting higher education, and not cutting it intelligently, not in any with any vision, but just cutting off the lopping the ends that stuck out. The highest multiplier effect of any in investment is education and in a specifically higher education.
[00:51:35] Speaker 17: Um I really am getting discouraged by the future of the university and the state government, the state, um government's attitude toward I think we're going to turn out like University of Guam, fairly soon, of the same intellectual level, if we keep cutting. What about uh the the lack of investment in higher education in Hawaii and the fact that it is a high multiplier effect investment and that's about where my question goes.
[00:52:04] Speaker 6: Okay. Um let's get a a quick response to that from from Pearl and and Pearl, I think our listeners know that over the last five years or so, the University of Hawaii's been cut back something on the order of 35%. Um what's your quick response to Steve and then we've got one more caller who's been waiting patiently.
[00:52:20] Speaker 15: I agree that education is critical, that anything we do to move forward um depends on education and a very strong university. The cutting, I think the university was cut less than other state departments were cut, and that was um because the governor felt that education was very important. Um in terms of what was cut, um the governor has taken a a pretty hands-off approach and allowed the university to make that decision. And I believe that in many areas of state government including the university and including Dbed um there were there is there was a lot of fat um which had to be cut and um at Dbed, you know, I believe most of it has has or all of it I should say um is gone and at the university, you know, I I don't know the specifics, but I I do know that there was there was a fair amount of fat that could have been cut and we really need to focus and streamline and do what we do best at the university.
[00:53:15] Speaker 5: Kathy Bilcas, thank you, you have a thought to share on that one? Oh, it's a subject near and dear to my heart. There's three other um private universities in um in town and they all do a a wonderful job and actually um actually they don't. That that is not true. They don't do a wonderful job, they don't bring any outside investment. Well, let's let's let's let's let Kathy finish. Let's let Kathy finish. Well, actually, I did a study a year or so ago about the uh foreign students that come to study in Hawaii. Now, I didn't do a study on out-of-state students, just the foreign students. And I found that the um BYU H and Shamanad and the community colleges um bringing in a few quite a number of people, but HPU, who has been growing so rapidly in the last 10 years is now about 40% um of our student foreign student population and UH is maybe 38%.
[00:54:15] Speaker 5: UH because of the public thing, has had to um to make some adjustments and HPU has expanded their programs and they've done a fabulous job and not at public expense and that's the good part. And what it is is when you do consider the multiplier we we find I I I I spoke to an economist at DBED um last year and we we determined that we couldn't compute an accurate multiplier because there's so many unknowns and this really has been a segment of economy that's that's been explored um enough. And we know that it has to um but we we can ascertain that maybe 3000 jobs are just a foreign students are um come to Hawaii because and it doesn't cost the taxpayers money necessarily.
[00:55:05] Speaker 6: Okay. Steve, I think you want to comment on that and then I need to move on.
[00:55:08] Speaker 17: Well, the primary problem is University of Hawaii used to be 55th in the nation in bringing in uh outside investment through research and development money, and we dropped to 94. And the reason we dropped is because the so-called fat was being taken out of the university. What it was was the University's major programs were so badly hold below the waterline they weren't able to pull in the outside grants. So the ability of the university to grow the economy and develop the economy was very short-sightedly uh undermined by the um the fact that the government didn't come through with his with his uh supposed support of the university. Saying that they were cut less than other people really isn't speaking to the fact that the university is an economic growth engine and a lot of things in the in the rest of of the government aren't economic growth engine.
[00:55:51] Speaker 6: Okay. Steve, Kathy's got one thing to say about that, and then I have to move on, and and I think you'll be happy to hear that in about a month or so we're going to do a show specifically on the University of Hawaii and its importance to the state and the perception that people outside the university have of it and the perception from within. And so I think we'll address all of this in a lot more detail, but Kathy, real quickly a response to what Steve just said.
[00:56:14] Speaker 5: Well, we just have to understand that education um is the fifth largest export service ahead of um financial institutions and banking in the in the country. We have to understand the importance of the um prospects in in Hawaii. And if we do understand that, we can um create some very very good jobs without providing pollution or more population necessarily.
[00:56:40] Speaker 6: Okay. We've got time for one more caller and everyone who tried to call this morning and and didn't get in, I apologize, but we just had a flood of calls today. Let's go to Jim in Makiki. Good morning, Jim.
[00:56:52] Speaker 18: Uh yes Randy. Uh my name is Jim Brewer, and I'm calling to put in a perspective which is not present on the uh panel today.
[00:57:00] Speaker 5: our economy in Hawaii.
[00:57:01] Speaker 18: Uh as a matter of fact, I'm really surprised that um you don't have somebody like Bill Boy, a a labor economist on there to also uh stand up for uh working people in this state.
[00:57:02] Speaker 5: And um unless that is addressed, we have a big, the the the problem that we have in the overall comes from economic problems that are bigger than just Hawaii.
[00:57:13] Speaker 18: Um the thing is that um um we this the dialogue has been basically monopolized by the business community, and in a way they talk about Hawaii's bad for business but actually Hawaii in the overall is not any worse for business than any other place on uh on the mainland.
[00:57:15] Speaker 5: And I would recommend that you and other folks read a book called The Great American Deception by a international economist from Southern Math University, his name is Ravi Batra. It's available at borders bookstore and it's called The Great American Deception.
[00:57:35] Speaker 18: Um we've gone through a kind of an economic uh slowdown, a tremendous slowdown from around 1990. And uh this uh has not been handled well by the leadership in in the state. Uh but the thing is that we still have to look at uh the fact that we have a low wage, long work
[00:57:58] Speaker 5: And this hurts small business. Small business needs to get its act together and understand that working people are their consumers. And when they consider us the enemy, then they are cutting their own throat and they are not directing things at those who are gulping down all those big gains from the tech revolution now.
[00:58:21] Randall Roth: Jim, I appreciate your call. We're almost out of time. I'm going to have to move on, but thank you very much. We're down to the last few minutes and I want to give my guests an opportunity to make any closing comments that they'd like to make. Let's go first to Charlie Rapoon, who's been on the phone, and if you're just tuning in now, Charlie Rapoon is a farmer on the windward side of Oahu. He's been especially active in water issues. Charlie, you've listened to about 57 minutes of a lot of people talking about an important subject. Any closing thoughts?
[00:58:53] Speaker 3: Um, three quick ones. First of all, on education, I think education is becoming less and less important in Hawaii because the quality of jobs is low income service-type jobs. That's what most kids have to look forward to, so education is becoming less important. Secondly, population projections as done by DBD is partially done by looking at our main economic drivers, tourism and construction, and projecting how many jobs they want them to have in say 20 years. And so, therefore, population projections, they try and match to that. So we actually use our economic goals to promote population growth. And third and last, carrying capacity, I believe is not important because if you have, I mean it's possible that we could double the number of people that are living here, but if the people living here have to have those additional people come here in order to survive economically, then if those people don't come here, even though we might have the carrying capacity to support them, if those people don't come, the people who are here, who are relying on those people coming for jobs, are in trouble economically.
[01:00:08] Speaker 3: And that's the issue that I believe we need to address.
[01:00:12] Randall Roth: Okay, Charlie, thank you very much for for being with us this morning.
[01:00:15] Speaker 3: Thank you.
[01:00:16] Randall Roth: Let's go next to Pearl, who's the chief economist with DBED. Pearl, about a minute or so of concluding comments.
[01:00:25] Pearl Imada Iboshi: Well, I I really believe economic growth is is important and necessary for our economy and for us to continue to increase our standard of living and for our children to to continue to increase their standard of living. Productivity, I think is a very important element in in that in increasing growth without a large increase in the population size. Education, I believe is critical for our youth because I believe that the areas that we need to expand in services and technology based industries and even in our traditional industries, technology has become so much more important and you see a widening wage gap wage gap between those who are educated and prepared for that versus those that do not.
[01:01:13] Pearl Imada Iboshi: Although at initial levels, it may be that pay is very similar in in some industries but as you go on it becomes the skill levels really make a big difference. I don't really want to talk about our population projections but basically our population projections look at demographics and the and the and how much or fertility rates to look at what the population growth would be like. And there is a factor of economic drivers, but only dealing with in migration or out migration thing.
[01:01:48] Randall Roth: Okay, Pearl, thank you very much for for joining us this morning. And and happy Mother's Day, by the way.
[01:02:01] Pearl Imada Iboshi: Thank you.
[01:02:03] Randall Roth: Kathy Bilkus, you've got about 45 seconds to just put a period at the end of this hour long conversation. And happy Mother's Day to you too.
[01:02:07] Speaker 1: As entrepreneurs, I I just want to say that we're usually a very, very positive bunch. We're used to bringing people together to collaborate and and solve problems and that's what I know that most of us want to do. And we have to get our economy going and we've talked about a lot of ways to do it and appreciate the opportunity.
[01:02:23] Speaker 5: Please to do it. And I'm appreciate that opportunity Randy.
[01:02:27] Randall Roth: Okay. And if that ended quickly, it's because I said, we're out of time. Okay. And if that ended quickly, it's because I said we're out of time. Uh, thank you to Perli Motty, Boshi, Kathy, Bilkus, Charlie Rapoon, Larry Johnson. Our sponsors, White Community Foundation, producer Susie Roth, technical wizard Ryan Kampus. You've been listening to Price of Paradise Radio Show. I'm Randy Roth. Aloha. Thank you to Pearl Imadiboshi, Kathy Bilkus, Charlie Rapoon, Larry Johnson. Our sponsors, Hawaii Community Foundation, producer Suzy Raw, technical wizard Ryan Campupose. You've been listening to the Price of Paradise radio show. I'm Randy Roth. Aloha.