Economist Paul Brewbaker of TZ Economics joined Spotlight Hawaii today to talk about the state’s economic outlook in the wake of the coronavirus pandemic. With the increasing numbers of positive coronavirus cases, he says the news is not good.
“It’s pretty basic, everybody. The epidemiological problem is the economic problem. You don’t solve the economic problem until the epidemiological problem is solved, until we mitigate and contain spread of the novel coronavirus,” he said.
Brewbaker argued that containing the virus and bringing the case count back down is the only way to ultimately revive the economy, even if that means a temporary shutdown of activity and more economic pain in the short run.
“In Hawaii, we have failed since May to maintain the level of mitigation we had achieved, so we’re gonna have to start over again. Now that may not involve as draconian a form of shut down as we had to impose initially, because we’re all accustomed to mask wearing, and social distancing, more rigorous hygiene,” he said.
Brewbaker also shared his thoughts on reopening tourism, diversifying the economy, the housing market, statewide unemployment figures, and he noted that while Hawaii’s economy will recover, it may not look the same.
“Whenever there’s a large exogenous shot to the economy, there’s always a possibility that things you think were only temporary changes, turn out to be permanent changes,” he explained.
He pointed to changes in consumer spending on groceries and eating out, which shifted with the shutdown from March to May, explaining for example that while people will eventually go back to restaurants, the way they dine out many be different.
“I think it’s gonna be way more app based,” he said. “If you’re in business or if you’re thinking about changes in the employment landscape in the near future, I’d be thinking about how the structure of economic behavior changes among consumers and households and how business can anticipate, and respond, and get ahead of and be leaders moving us in those directions.”
Spotlight Hawaii, which shines a light on issues affecting Hawaii, airs live 10:30 a.m. every Monday and Wednesday on the Honolulu Star-Advertiser’s Facebook page. Join Ryan Kalei Tsuji and Yunji de Nies this month for a conversation about the economy. Click here to watch previous conversations.