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Misunderstanding What Makes the Economy Tick

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By Lowell L. Kalapa

As lawmakers gather this week to do the work of the people, it is almost certain that they dream of a myriad of new laws that they can go back to their constituents and claim credit for introducing.
Unfortunately, more new laws merely impose new requirements and new hoops through which taxpayers and especially businesses must jump. Sure there may be laws to address criminal issues or clean up the bureaucracy for which government is known, but lawmakers need to control their urges to impose new restrictions on the economy and the way the economic engine is throttled.
This means backing off on the regulation of businesses or else streamlining the compliance process. Over the years, lawmakers have imposed all sorts of requirements on businesses, many of them of demanding technical expertise well beyond the average entrepreneur starting a business so that in many cases costs are incurred hiring the expert to insure that the entrepreneur complies with the regulation or requirement. Lawmakers should go back and examine some of the requirements and ask themselves whether or not there is an easier way to meet the standards they want businesses to meet without incurring additional costs.
If lawmakers can’t back away from some of these impositions, they need to examine how they can facilitate the process. Often compliance takes months, if not years. As the recent report by the affordable housing task force pointed out, zoning and permitting land for development, before even the first shovel goes into the ground, can take as long as nine to ten years to secure. These delays cost the development and the investor money. That cost is eventually passed on to the homebuyer making the term “affordable housing” an oxymoron.
Indeed, one has to wonder if lawmakers understand some of the basic concepts of doing business, that “time is money” and that all costs must be recovered if the entrepreneur is to keep the doors open. This means the business must recover not only the cost of producing the product or service but also the cost of taxes, regulations, and time delays exacted by the bureaucracy.
Hopefully, lawmakers by now have learned that “profit” is not a dirty word with businesses trying to “rip-off” their constituents, but a necessity for the entrepreneur to remain in business and provide needed jobs.
And while politicians like to point out that Hawaii is a special place, there is more truth in that characterization than they probably truly understand. One obvious unique characterization that is often misunderstood is that Hawaii is the most remote populated spot in the world. Obvious, with one look at a world map this is not hard to accept. What is often overlooked are the hurdles and barriers this isolation places on Hawaii’s people and its economy.
Time, distance, and transportation all have an impact on how well the state’s economy does. Those readers who have long memories or remember the “good old days” will recall how dock strikes either here in Hawaii or on the west coast sent shoppers running to the stores to stock up on essentials. In those days the visitor industry was not the overwhelming giant that it is today, but even the visitor industry shuddered at the thought of a dock strike. Lawmakers need to pay attention to the state’s transportation facilities as they are key to the economic well being of this community.
Unlike other states where land is aplenty, Hawaii is – if lawmakers haven’t noticed – an island with a finite land mass which means the cost of land under housing or a shopping center is going to be very expensive. The fact that many don’t recognize this cost is evidenced in the cry from bottle bill advocates that stores should be forced to take back the empties or put in reverse vending machines.
Retailers see each and every square foot of their stores or parking lots as revenue centers. One more parking space is one more customer in the store, one more display stand means a dozen or more different types of products that can be displayed for sale. Forcing retailers to take back empties means having to give up precious display space or a couple of parking stalls to take the returns. Note well that even under the current law, retailers are not compensated for collecting and accounting for the nickel deposit.
Nope, lawmakers made sure that whatever nickels not claimed for a returned container go to state government to hire more government employees. Recognizing Hawaii is a unique place is not an insular perception, but a fact of living and doing business in an island state.

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