Hawaii's Demise Through the Eyes of the Economist

Homelessness in Hawaii is now international news. The local socialist mindset proposed to offer the homeless houses for free so we can get them off the streets so Honolulu doesn't look bad.  If this happens, the result is predictable: We will get even more of them.

In fact all this is old news: Homeless? Buy a One-Way Ticket to Hawaii -- Hawaii "is attracting homeless people from the mainland US by offering food, a bed, and health care for just $3 a day."

Obviously we are seeing the payoffs of decades of socialism:

• Homelessness
• Dilapidated infrastructure
• Poorly performing public schools
• Unfunded pensions
• Quick approvals for million dollar apartments in Kakaako
• Destruction of agriculture for cookie-cutter homes (Ho'opili)

 and of course,

• A useless multi-billion dollar rail.

In another article, the political base of Pres. Obama, Illinois, is called America's Greece!

Next year they'll do a follow up: Is Hawaii America's Spain? Spain sunk billions in renewables, trains and overbuilt subdivisions. And they sunk their country.

Problems Big and Small. Sensible Solutions for All.

[This is an enriched version of my TEA 2011 speech at Hawaii Capitol on April 15, 2011]

We got big Problems. So does everybody else… states, the whole country, other countries. What we need is Sensible Solutions. Instead we get more government solutions and more taxes.

Pension accounts for city and state government employees will be broke soon-- they face huge account deficits and Hawaii leads the way in this. Their solution? Tax pensions or bury their head in the sand. The sensible solution is to raise the retirement age to 70 years of age.

Homelessness. Their solution? Build more public housing. The sensible solution is to take care of the homeless needs and provide transitional housing. Transition the homeless back to normal life. Do not warehouse them. Empower, consolidate and better organize non-profits that care for the homeless. Set limits on the benefits that the homeless receive.

Power. We pay the most for electric power. We complain about the price of gasoline but it’s only 15% more expensive than the mainland average. Our electricity is about 300% more expensive. Whose fault is this?

The legislature's with their "green" objectives that put into effect without any cost analysis, the PUC's controls, and HECO's monopoly. The monopoly buys wind and solar power for 15c per KWh and sells it to ratepayers for 30 to 40 cents.

The sensible solution is to deregulate. Within 20 years we can have a competitive energy market with solar, geothermal, coal, OTEC, biomass, algae, etc. distributed power providers.

Planning is a big problem. We have the Oahu Metropolitan Organization (OMPO) that coordinates all transportation plans in the city and county of Honolulu. But the key people on the all-important policy committee are the Transportation Committee chairs of the Senate and the House. For many years they are both from Maui. So the county of Maui decides the transportation plans of the county of Honolulu. This absurdity is going on for a decade now and has lead to gross miss-allocation of funds with Honolulu at the losing end.

Traffic is a big problem. We need roads to move over 90% of the people who use vehicles. Instead government plans to waste 6 billion dollars to help the 1% of people on the rail. And cutback TheBus in the process.

TheHandiVan is a costly service. Its archaic and inflexible booking system requires 1 or 2 day advance reservations. This inconvenience costs $35 per rider. TheHandiVan services can be fully substituted by private modified vans of which there are several on island in private transportation. They provide quick and courteous service, local jobs and a modest profit at about $25 per ride. TheHandiVan is proof that Sensible and Government do not go together.

Waste Management is a problem. Their solution? Business as usual: Landfills and expensive, fake recycling. Best solution? Privatization and incentives for remanufacturing. The private sector can deal with landfill issues, burning and recycling. Or sending trash to mainland or Asia. Leave environmental requirements as is, and let the private sector find the solution set including the remanufacture of recycled paper, plastic, fats, oils and lubricants.

Pavements and potholes. Their solution? Neglect, followed by expensive contracts and sloppy pothole plugging by city crews. The sensible solution is to go on routine pavement maintenance so that our local refineries can plan their asphalt production. (I understand one of them has quit making asphalt because of the unpredictability of demand.) Sign 10 year contracts with quality guarantees and price discounts. Get the City out of the pothole repair business.

Sensible Solutions have these basic ingredients: Less centralization, less taxation, less regulation and greater private sector participation.

Parks, Homeless, Water Mains, Sewers and Trash: Problems and Solutions

Park Maintenance and Beautification
Partial privatization and Adopt-a-Park corporate and club programs. Private Moanalua Gardens is in top shape. Fully restore the War Memorial Natatorium. Keep Hanauma Bay in top shape -- both visitor side and nature.

Homeless in Parks and Beaches; Kuhio Park Terrace All Full with Micronesians
Shrink the $30,000 Hawaii Homeless Benefit Package. Repatriate mainland homeless. Receive much more support and accommodations for the Federal PACT with Micronesia. Remove mentally ill homeless from streets, parks and beaches and provide them with proper care. Use decommissioned TheBus for overnight sheltering. No sleeping on public parks, etc.

364 Water Main Breaks per Year
High priority replacement of old mains, especially those in corrosive low lying areas. Our fixing rate needs to accelerate.

Sewers Consent Decree with EPA Will Cost Over $7 Billion If Done by the City
A Public Private Partnership (PPP) for reconstruction, maintenance and operation to infuse private capital, to share risk and to operate sewers like a utility. With PPP, construction costs decrease, quality and timeliness improve. Better management. Bottom line: lower monthly bills and better infrastructure.

Oahu’s Recycling Is a Glorified Sorting and Exportation of Trash. Yard Waste Recycling Is Basically Mulching and Dumping. 20% of Trash Burnt is Flyash.
Re-use tires and glass into pavements. Convert flyash into pozolanic cement. Remanufacture plastics into benches, bump stops and other simple and useful parts. Incentivize a private biomass plant to generate electricity out of the voluminous routine green waste collection by the city.

Poverty of Dollars is Largely a Statistical Creation. Poverty of Spirit is Real.

Walter Williams of the Jewish World Review makes a powerful argument that poverty as applicable worldwide is almost absent in the US. He says:

"Material poverty can be measured relatively or absolutely. An absolute measure would consist of some minimum quantity of goods and services deemed adequate for a baseline level of survival. Achieving that level means that poverty has been eliminated. However, if poverty is defined as, say, the lowest one-fifth of the income distribution, it is impossible to eliminate poverty. Everyone's income could double, triple and quadruple, but there will always be the lowest one-fifth."

The real malaise in the U.S. is poverty of the spirit which leads to many ills in our modern society:

"Yesterday's material poverty is all but gone. In all too many cases, it has been replaced by a more debilitating kind of poverty — behavioral poverty or poverty of the spirit. This kind of poverty refers to conduct and values that prevent the development of healthy families, work ethic and self-sufficiency. The absence of these values virtually guarantees pathological lifestyles that include: drug and alcohol addiction, crime, violence, incarceration, illegitimacy, single-parent households, dependency and erosion of work ethic. Poverty of the spirit is a direct result of the perverse incentives created by some of our efforts to address material poverty."

Read his full article "Where Best to Be Poor" for a fuller argument why material poverty is almost largely absent in the U.S.

Homelessness on Oahu

Earlier today, I testified before the Hawaii Housing Authority on the issue of homelessness in our city. The following is an expanded version of what I stated at that meeting.

As an 18+ year resident on Oahu and a candidate for mayor, I am alarmed by the homelessness issue and its impact on our people, our tourists, our parks and our beaches.

The Kapiolani "tent park" is only the beginning. A shrinking economy, reduced tourism and large anticipated cuts in both public and private budgets have the potential to make this an explosive issue which will stress service providers at all levels.

There are many causes to homelessness, including cost of living, low pay, unemployment, housing affordability, mental health, drugs, and, for a few, a life style choice of permanent camping.

There are several services and solutions, including priority housing for single parents, cubicles, camps or areas with facilities for sleeping in a car, other temporary accommodations, physical and mental health treatment, affordable housing and other public housing.

There are many agencies involved and service providers such as:

• Hawaii Housing Authority
• Partners in Care
• HUD such as Community Development Block Grant
• other Federal assistance
• City Council and Mayor
• State Department of Health
• Police Department
• Aloha United Way and Foodbank Hawaii
• Churches and several other advocates

Therefore, a County Unit on Homelessness is necessary to coordinate and consolidate all these activities and offerings.

Homelessness is a multi-issue, multi-solution and multi-fragmented challenge. Some of the issues and positive directions include the following:

• City cooperation with state is lacking; and city is going out of the affordable housing service at the worse possible time.
• The city has not cooperated by providing warning of evictions thus putting responding agencies and volunteers in sudden crises.
• Last year a bill proposed a 20 million allocation for a downtown homeless center but city administration never showed up to support it.
• Public private partnerships for affordable housing development and management work. We should do more of them and apply proper controls.
• The state should take a serious look on sustainable lease. It will likely work well for low income families. (A sustainable lease is a leasehold arrangement that maintains property in an affordable price range.)
• There are complaints that several people residing in public housing own new vehicles that are worth well over $40,000 dollars. Why are their owners in subsidized public housing ?
• There are concerns that the development of public housing and free sleeping quarters sometimes act as incentives for local and in-migrating homelessness. So you are balancing on a tight rope.

A major crisis is looming with the downturn in economy, the closure of homeless centers such as the recent one in Waihiawa, and the Next Step 151-cubicle unit provided by the state will close this year. Although it may sound counterintuitive at first, it is essential to increase the budget and coordinate the response to the homeless issue so that it remains at a manageable level.

To this end, for the interim, the city, in cooperation with the state should:

• identify vacant lots and specific areas in some public parks and
• develop a homeless camping permit much like the regular camping permit.

The advantages of a homeless permit are that:

• It designates specific places and periods.
• Assisting agencies will know where each individual is located.
• If the police are called, the homeless campers can show their permit.
• Maintenance on parks will be easier due to a manageable number of people at each site.
• The permit will have an expiration date which can be renewed.

This permit process would be a proactive approach to homelessness making it measurable, tractable and manageable.