Richard Borreca: Hawaii is counting on coronavirus plans to hold up

Hawaii and other states grappling with either actual cases of the coronavirus or just the fallout from the fear of the health emergency have not been helped by the sluggish response from the Trump administration — but for the time being, it is the only federal administration we have.

It is also the only Hawaii economy we have, and there are serious worries about how long it can fly level and straight heading into an economic tornado.

I asked Hawaii economist Paul Brewbaker, who has watched Hawaii’s fragile economy go through the 1980 recession, the Gulf War, the 2001 dot-com recession, SARS in 2002, and the 2008 Great Recession, what will happen with COVID-19.

“I’m guessing COVID-19 will be two or three times worse than SARS, in terms of forgone tourism because it combines international with domestic cancellations, and because it induces a (resident) consumption contraction in addition to the export contraction (tourist consumption),” Brewbaker said.

In simple terms, Brewbaker predicted Hawaii may be looking at a “consumption recession.”

“Include less travel, not eating out, not hanging out at the mall … I mean, we’re talking billions pretty quickly (in a $100 billion Gross Domestic Product Hawaii economy). So, you know, a recession of maybe a percentage point or few in real Hawaii GDP is not out of the realm of possibility anymore,” he said.

Brewbaker is by no means an economic pessimist, so when he sees storm clouds building, packing an umbrella is a wise option.

Gov. David Ige, for his part, has declared a state emergency, giving him broad powers to shift government responsibilities. His emergency declaration is fairly extreme because it gives him authority to suspend any laws that may impede emergency functions.

“This emergency proclamation will give us the ability to move more quickly … to protect our communities from the virus and provide emergency relief if and when it is necessary,” Ige said last week.

Just as timely is the action by House Speaker Scott Saiki, who has put into motion a major effort to organize a coherent response to the COVID-19 crisis.

Saiki’s newly formed committee is expected to be announced Monday with a panel of 20 members, including business, construction, union and social service agencies leaders. Also there will be a number of state House members. Saiki and Peter Ho — Bank of Hawaii’s chairman, president and CEO — will chair the committee, which Saiki said is expected to hold its first meeting Thursday.

“The initial goal will be exploratory, but I’m also asking for specific goals and recommendations,” Saiki said in an interview.

Perhaps just as important, Saiki stressed, is that the committee will get the word out to the public that leaders and the government in Hawaii are taking action.

“The goal is to keep everyone informed,” Saiki said. “Maintain public confidence and consumer confidence.

“The way to do that is to show that everyone is preparing for this and that a plan of action is in place,” he said.

The Makiki Democrat remembers the 2008 recession and that its four-day work weeks was the wrong reaction to an economic crisis.

“We want to be available to address the state’s needs,” Saiki said.

All plans sound good before they are tested. But at least going into the coronavirus crisis with a plan derived from community consensus is a strong first step.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.