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Wednesday, April 22, 2020
A Low-Risk Plan to Re-Start Hawaii’s Economy Now
By Andrew Walden @ 2:25 AM :: 7330 Views :: Economy, Small Business, COVID-19

by Andrew Walden

The COVID ‘stay-at-home’ system is not economically viable.  After shutting down tourism and laying off 37% of the state’s workers, Hawaii is expected run out of unemployment compensation funds in three weeks.   But Hawaii’s governor and mayors seem to be focused on the beach.  Mayor Caldwell’s big idea is to reopen bars for package liquor take out and allow exercise in parks.  The Honolulu Council plan is apparently to reopen businesses according to their campaign contributions.  UHERO’s latest ‘idea’ is that more magic money will fall from the federal sky

Hawaii’s frozen-in-place economy is dying due to lack of dollar movement.

Corona virus is spread by human to human movement -- for instance the Maui Hospital and Kona McDonald's ‘essential business’ COVID clusters which now account for 86 of 586 known cases in Hawaii.

To reopen the economy, start with high dollar-per-human-contact businesses—ie the ones nobody is talking about.  We don’t need to wait a month to do this. 

Here’s a list of high dollar-per-contact businesses:

1) Real Estate (Note: Kauai Mayor Kawakami April 14 partially reopened Realtors.  On Oahu alone, $510M in real estate transactions were conducted in March, 2020.  UPDATE April 23, 2020: Caldwell announces partial reopening of Realtors and Car Dealerships)

2) Auto, Truck, Boat, Airplane, and Industrial Equipment Dealers, Appliance and Furniture stores.  (Note: New Federal guidelines deem auto sales to be 'essential business'.  54,750 cars and light trucks sold in HI 2019.  At a lowball estimate of $20K each the total value would be over $1B.)

3) All research activities university and otherwise, including astronomy which is worth about $170M statewide.  RCUH did $263M in business in 2019.  (UPDATE: UHPA, April 26, callled for a re-start of academic research.)

4) All wholesale businesses.  (Agriculture and food processing were never shut down.)

5) All manufacturing businesses.  (Pearl Harbor Shipyard and Hawaiian Airlines repair shop were never shut down.)

6) Office-based professional services such as law firms, accountants, architects, engineers--but not beauty salons or other low productivity, high contact retail service enterprises.  (Banking was never closed.)

7) Low contact government offices—some of which are holding up permits for economic activity.

8) Medical and dental practices.  (Never ordered shut but many closed on their own after receiving CDC recommendation.  UPDATE: Gov Ige ordered elective surgeries cancelled 'as each healthcare facility deems appropriate' in his 6th Supplemental Proclamation April 25, 2020.   Some non-Corona patients may be avoiding necessary medical care at great personal cost.  US NiH estimated US per capita medical costs of $5,572 in 2005.  Based on this number, annual medical spending would be about $7.8B in Hawaii.)

Combined, these low-contact sectors account for over $15B -- roughly 20% of Hawaii's $73B GDP.

Compared to the “one more month” on offer from Hawaii’s so-called leaders, reopening these high dollar-per-contact sectors seems like a radical step.  But these steps fall far short of restoring Hawaii’s tourism-based economy.  Likewise this plan does not reopen schools or daycare centers, which are well-known germ factories.  Like McDonald’s, tourism is a high contact enterprise and it is difficult to envision its restoration with COVID floating around. 

Phase one of President Trump’s three-stage plan for reopening the economy includes: “LARGE VENUES (e.g., sit-down dining, movie theaters, sporting venues, places of worship) can operate under strict physical distancing protocols.”   Echoing Trump, Governor Ige’s so-called experts say, “A gradual reopening is projected to start within a month at certain places, maybe parks or restaurants….”  So researchers, realtors, and auto dealerships are shut down but restaurants are to be open?  That is a political plan based on the squeaky wheel theory, not a medical or economic plan. 

Did Hawaii’s toughest-in-the nation social controls save us? 

Alaska has done about as well as Hawaii in controlling COVID. 

In a recent survey, Hawaii was the state 'slowed down’ most by COVID with a composite slowing score of 91.98.  Alaska was 36th with a composite score of 29.19.  But, according to US CDC, as of April 7, 2020, Hawaii’s COVID infection rate per 100,000 population was 25.5 and Alaska’s was 28.9. Only seven states were below 30.  The infection rate in New York City was 915.  By dividing the April 21, 2020, COVID count by population we find that as of April 21, 2020, Hawaii’s rate is 41.9, Alaska’s is 42.9.

Testing is the Key

Hawaii medical practices were never ordered to shut down, yet many have due to fear of the virus.  For them, as for all categories outlined, reopening is going to take more than permission from the government. 

The key to restoring confidence is workforce COVID testing.  If we can test 100s of people on Molokai and in Hana after one or two COVID cases, we can test groups of 20-100 workers to allow them to work with some level of assurance that their co-workers are all negative.  Under the circumstances, employers should be happy to pay for the testing.

No vaccine or cure has ever been produced for any previous corona virus, most of which cause the common cold.  Chinese researchers report the virus has mutated into at least 30 strains some of which are 270 times more virulent than others.  More strains means less chance of COVID mutating out of virulence as SARS/MERS did. 

It is logical to assume that the disease is here to stay.  We must act accordingly.


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