Hawaii Liberty Chronicles

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Note the root of the problem at 1:25.

Peter Schiff is interviewed on Lew Rockwell’s podcast.  A must listen.  Schiff called the current crisis last Summer.

He wrote The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down.

Editor’s note: originally published in Hawaii Reporter on Sept. 19, 2008.

By Daniel Brackins, John Carroll and Dan Douglass

Now is the time for a demonstration of leadership unlike ever before seen in the history of Hawaii. The clock is ticking and the only thing Gov. Lingle has to gain or lose is her own future political career.

Our state leaders must not succumb to the failed systems of the old boy networks that infest, corrupt and destroy every area of Hawaii’s economic livelihood, but rather convey an unparalleled vision of economic freedom that will not only inspire the oppressed of Hawaii to action but establish an unshakable and globally competitive marketplace in Hawaii.

The faces of the economically oppressed have grown and diversified over the years. It’s not only the hungry family or individual you see at IHS or River of Life Mission, but any and everyone who can no longer survive in Hawaii’s failing marketplace.

These are our family members, colleagues, friends and neighbors who ultimately end up purchasing the one way ticket to a place of economic refuge. Will our leaders unashamedly put the self-benefiting political deal-making aside and take the courageous necessary steps that will empower and restore Hawaii’s economy?

It has been five months since Governor Lingle gave her speech on the state of Hawaii’s economy- “Highlighting Hawaii’s Economic Challenges and Opportunities.” It was at that time we responded to her disconnection with the hardships of the Hawaii’s citizens in “Economic Reality Check for Governor Lingle.”

The Governor’s office responded to our piece with, “Gov. Lingle Has the Facts and Solutions on Hawaii’s Economy.” Their response continued to be cluttered with misstatements, and warranted our reply in, “Economic Reality Check for Governor Lingle Part II”

On Sept. 16, 2008 the Honolulu Star-Bulletin reiterated our predictions in reporting that Hawaii is facing a recession. Gov. Lingle claimed many months ago that “reverberations from the U.S. economy are now being felt worldwide,” but “many of these stories [about a failing economy] simply don’t apply to Hawaii.”

Hawaii is now facing increased numbers of bankruptcies, layoffs, business failures, foreclosures, and increased unemployment.

All of these are indicators that Hawaii’s economy is in peril; indicators that Gov. Lingle and her administration seemed to have missed when painting their rosy picture of the economy several months ago. Yet we mentioned all of these factors in our analysis, but they were dismissed as “completely ludicrous statement[s] based on zero fact.”

We earlier claimed that the state is “peering into possibly the most painful economic period in our Hawaii’s history since statehood.” With the current national economic crisis possibly being one of the worst since the 1930’s, how can Hawaii not be affected?

Hawaii has not hedged itself against a downturn in the national economy. Our economy relies mainly on tourism. With a lack of confidence in the U.S. economy, travelers are very unlikely to come to Hawaii for vacation.

In turn our economy has seen a decline in the tourism industry. With fewer tourists coming to fuel our economy all other businesses are affected. One of these affects is an increasing unemployment rate with businesses having to cut expenditures.

The solution to hedge some of these negative effects would have been a vibrant sustainable economy in Hawaii. We provided many possibilities in our previous articles, but two foundational examples are the establishment of free trade and an agricultural industry in the state.

Why does industry and commerce based on importing and exporting in Hong Kong and Singapore flourish while Hawaii spirals downwards? Why do we pay so much more in Hawaii for everything shipped in when our central location should be a tremendous contribution to boom our economy?

Now, in excess of 90% of all goods, food, consumables, and others are imported. Why? With the nearest cape 2300 miles away to the East, the negative impact of the Jones Act on Hawaii’s fragile economy is truly devastating. How does this affect Hawaii? One instance that most can relate to is the cost of goods such as milk. Milk is on average over $7 a gallon. This is because there is no significant dairy production in the state, and milk must be shipped from the mainland.

Once upon a time agriculture was Hawaii’s leading economic component. Every item we use in agricultural production such as fertilizers, feeds, pesticides, and field equipment must be imported. With just two companies controlling all the shipping, these costs skyrocket above what is being paid for the same items on the mainland. Implements manufactured in Russia, Denmark and China are simply not available to Hawaii’s farmers.

Additionally, even if we produce our very delicious fruits such as mango, lilikoi, papaya, lychee, grapefruit, melons, rambutan, and oranges we cannot ship them to world-wide markets where they can command the highest prices. Our healthy cattle, free of hoof and mouth or mad cow disease, would be highly prized in international markets and bring substantial profit here to our ranchers.

The major impediment to eliminating this constricting law is our own Congressional delegation and the State of Hawaii’s administration that choose to not act to reform this denigrating law. With a Hawaii exemption from or elimination of this Act, coupled with major free trade zones, our Hawaii would be well on its way towards a self sustainable economy.

Investors and business would pour into Hawaii, this could lead to new industries being developed that will bring revenue and employment to the state.

Currently the GDP of the state is about $50 billion; with our suggestions Hawaii could expect a GDP of well over $200 billion. Singapore and Hong Kong, both with a vastly smaller land mass than Hawaii, bring in a GDP of over $222 billion and $208 billion respectively. Both of these areas use many similar economic principles prescribed by us, and are economically self sufficient.

Our state politicians were not prudent enough to take proactive measures. Hawaii’s citizenry is now faced with fearful uncertainty. There are no simple solutions and we do not expect a quick end to the current financial crisis, with more turmoil ahead. We urge Gov. Lingle to take the lead and begin to take the steps necessary to make Hawaii a self sustaining economy. The hope of our state rests in the determined productivity and ingenuity of the rising generation. Our current officials have a choice. To oppose and stifle this hope through special-interest driven regulatory policy and bailout at the public’s expense or to facilitate future freedom by getting out the way of honest competition and demanding integrity every time they look in the mirror.