It’s the Economy, Mooooo
by Tom Yamachika, President, Tax Foundation Hawaii
These days, there are tons and tons of new items keeping our minds occupied – from the Johnny Depp trial to the January 6 hearings to the demise of Roe v. Wade. As our primary and general elections edge ever closer, however, there are a few long-term concepts that we as voters should be top of mind as well.
“It’s the economy, stupid.” This phrase, coined by Democratic strategist James Carville in 1992 as part of Bill Clinton’s campaign against George H.W. Bush, solidified one of the key concerns of Americans at the time – so much so that Clinton was able to unseat Bush even after Bush had enjoyed a public approval rating of 90% the year before, on the heels of the ground war in Kuwait.
On June 6, the financial site WalletHub put out a study called “2022’s Best and Worst State Economies.” In that site, our humble little state had lots of reasons to be humble, coming in at a bottom-scraping 48th out of 51 (50 states and the District of Columbia). The only three states to finish lower than us were Louisiana at 49th, Alaska at 50th, and West Virginia at 51st. West Coast states, by the way, were doing very well: California ranked 3rd overall, Oregon was 9th, and Washington state got the top spot.
To come up with their rankings, WalletHub examined indicators in three areas, Economic Activity, Economic Health, and Innovation Potential. Economic Activity included things like change in Gross Domestic Product in 2021 over 2020, exports per capita, and state gross public debt as a percentage of GDP. Economic Health included indicators like unemployment rate, change in nonfarm payrolls, growth in state personal income, government surplus/deficit per capita, and unfunded public pension plans per capita. Innovation Potential used metrics like share of jobs in high tech industries and STEM employment, entrepreneurial activity (from the Kauffman Index of Startup Activity), and inventor patents attributed to the state.
Of these three categories of metrics, Hawaii pulled in at 33rd on Economic Health, solidly in the middle of the pack, but was blown out in Economic Activity (47th) and Innovation Potential (50th).
But hold on a cotton-pickin’ minute there. Wasn’t it a mere 20 years ago when we as a state threw a whole bunch of resources at high technology and vowed to make the state a better, friendlier place for tech? And that institutions we set up for that purpose, like the High Technology Development Corporation, are still around today? It would be understandable if a few states caught up to us in that department in the past 20 years, but almost ALL of them? Yikes! We must be doing something terribly wrong.
But is it really that strange? People generally were and are packing their things and getting on planes with one-way tickets out of here because they weren’t able to make ends meet. Is it a surprise that businesses, high-tech businesses among them, would do the same?
Lawmakers, please note: We know that some of you don’t think of businesses as your constituents, whom you are supposed to be serving. Some of you think that businesses are cows to be milked. But even so, if you want the milk you have to feed the cow.
It’s the economy, mooooo.