Comparing Economies: Hawaii and Greece -- The Writing on the Wall

Recently UHERO, that is the Economic Research Organization of the University of Hawaii, presented a detailed inforgraphic of jobs in Hawaii. The inforgraphic answers questions like: What type of jobs, how many and how much do they make?

UHERO explains their graphic as follows: Each colored rectangle represents a single occupation. The size of the rectangle indicates the number of jobs. The color of the rectangle indicates that occupation's median annual salary relative to the overall median.

The inforgraphic is pictured below but I strongly encourage to visit UHERO so that you can use your mouse to explore the data in each category that interests you.

What I found stunning is this: How is it possible that all these people live in Hawaii where a (roughly) $75,000 income is necessary, nearly double US average?

This graph suggests to me that Hawaii's economy is very much like Greece's pre-default economy. The majority of Hawaii earners are low earners particularly in comparison with the cost of living in Hawaii. So how do so many people make it in Hawaii? (How was it possible for Greece to be one of the largest markets for luxury cars?)

I suppose that at least three things are in play in Hawaii (like Greece):
(1) A large para-economy such as groups of laborers building rock walls, cutting trees and trimming bushes that never report any income. This is just an example. Check Craigslist for carport car mechanics as another example. And so on.
(2) Some under-reporting of taxes by people who have proper jobs or own businesses. (This was vast in Greece.) Do you recall the Hawaii Dept. of Taxation efforts to put cashier machines in farmers markets?
(3) A vast governmental welfare operation dedicated to income redistribution and supporting "the poor with Escalades in the public housing parking lots", as car repairman Nitta, 2008 mayor candidate used to say. Greece had that too.

The score Hawaii-Greece is 4 for 4: Many low income earners, para-economy, tax evasion and big welfare. Wouldn't you say that the writing on the wall is too obvious for Hawaii?

BBC: Is it Cheaper to Put Greek Train Passengers in Taxis?

BBC News coverage on May 12, 2012.

The claim that it would be cheaper for Greece to send every rail passenger to their destination by taxi was first made by Stefanos Manos, the former Greek finance minister, in 1992. Manos used the railway system to illustrate what he saw as gross public sector waste.

Mr Manos is correct if there are more than two passengers in each taxi.

But either way, the Greek railways are in a pretty awful mess, and while train journeys may cost less than cab journeys, they are more expensive than travel on other forms of public transport, including air.

"Over $13bn has been pumped in, in the last 15 or 16 years. In terms of passengers, long-distance rail has 2.7% of the share and in terms of freight it's truly a joke because it's 0.08% of the freight so the costs are staggering," says Prof Prevedouros.

Greece Elects a Non-politician as its Savior Prime Minister

Dr. Lukas Papadimos became Greece's Prime Minister on November 11, 2011 through a consensus process that included the ruling socialist party, the opposition conservative party and the President of the Republic.

A member of no political party, Dr. Papdimos is a wise and unusual choice. A physicist and electrical engineer with a doctorate in economics, all from MIT, and professor of economics at Columbia University and the University of Athens. An academic and a numbers man.

Furthermore, Dr. Papadimos has had extensive experience in national banking affairs. Between 1980 and 1985 he worked at the US Federal Bank in Boston. Between 1993 and 2002 he was manager at The Bank of Greece. This was followed by the vice-presidency at the Central Bank of Europe until 2010 when he became financial adviser to the prime minister.

It appears that Dr. Papadimos is "what the doctor ordered" for Greece with its huge banking and debt financing crises. It remains to be seen whether the members of the Greek Parliament will re-orient their thinking around the goal of saving the country as opposed to their petty politicking, service to special interests, and focus on pet regional projects and re-election ambitions. (This may be too much to ask of parliamentarians who consistently did wrong for the country for decades.**)

I can only wish Dr. Papadimos the best of luck, and congratulate him for his bravery to pilot a half-sank ship in the middle of a hurricane.

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(**) As an outside observer with a bit of knowledge of politics I am alarmed by the similarities among the Greek Parliament, the US Congress, and the Hawaii Legislature. Simply put, they keep making the wrong choices time and again, and driving the debt to the Billions and Trillions.

Like in Greece's past, all political "change" in the US and Hawaii has been fake. Until the knife reached the citizens' bones (as it has in Greece.) Although I hope for a big improvement, it may be too late and too painful to return Greece (and the US and Hawaii) to fiscal health and prosperity within a generation.