The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”

Hawaiian Public Policy is “de-railed”

Apparently, the Tourism Industry or other organization doesn’t need programs to get Hawaii mentioned more often in the news.

Hawaii got lots of publicity for apparently being the birthplace of a former US president. But many of the other publicity is not that good.

A fire in a large, high-rise apartment building in Honolulu without fire sprinklers killed several people.

On the same day we hear that a Hawaii resident is working with the ISIS terrorists.

And then there is the approval of the legislature for a plan to work on UBI, the Universal Basic Income idea, where every household would get a monthly amount from the government, regardless of income. Imagine, you no longer have to work. Apparently, these politicians think that money comes from heaven, not from the taxes of hard working people who have jobs. Here is the article from Hawaii.

UBI FOR HAWAII?

UBI stands for ‘universal basic income.’ The proposal has been floated by various governmental agencies around the world for the last several years. Switzerland even had a referendum and the idea was rejected by the citizens.

The idea is for the government to guarantee a specific monthly income for everyone. There would no longer be a need to work. It would be liberating. We can devote more time to our families; pursue our interests such as playing tennis, golf, or just playing video games. It would be wonderful. At least that’s how it is being sold.

Facebook founder Mark Zuckerberg and Tesla’s Elon Musk believe someday everyone will need ‘free money’ to make ends meet.  State Rep. Chris Lee also agrees with that idea. The Hawaii legislature will look at it because of the severe homeless problem.

Our view: “Free” never works as intended and usually has severe unintended consequences.

And then there is the ongoing construction of what will be the most expensive (per capita) railway project in the world in Honolulu. It may cost over $13,000 per person. Taxes will skyrocket, severely hurting the economy. And then the state may go broke.

Here is an excerpt of what Joe Kent, V.P. of Grassroots.org wrote about it:

Considering how Honolulu’s rail project is shaping up right now, the average Oahu resident will have to pay almost $10,500 for its construction costs, which will make it the most expensive rail project in the world, per capita.

That’s based on the current official estimate of about $10 billion, though some experts have said the project could cost more than $13 billion, which would cost the average Oahu resident about $13,700.

“There is no question that the Honolulu rail project is the most expensive per capita of any publicly funded rail project in the modern age,” said Randal O’Toole, a transportation expert and senior fellow at the Cato Institute, a policy think tank based in Washington, D.C.

Even if the U.S. Federal Transit Administration kicks in the $1.5 billion it promised to help defray Honolulu’s costs — which at the moment is not a sure thing — the average Oahu resident would still be on the hook for $8,917.

On a per capita basis, Washington, D.C., has the second most expensive transportation project in the nation, the Metro, costing almost $3,000 per person, for a total of about $18 billion.

O’Toole noted that, “These are all in urban areas many times larger than Honolulu — more than four times in the case of San Francisco, eight times for Washington, 15 times for Los Angeles, and more than 20 times for New York.”

This means it will cost roughly $25,000 to $35,000 for the average Oahu family of three to pay off the cost of Honolulu’s long-controversial rail project, which so far is barely half-built and has its most difficult stretch, through Downtown Honolulu, looming ahead.

Those tens of thousands of dollars per family are funds those families could apply toward a home down payment, college tuition, health care or just plain food and utilities. And that bill for rail does not even include what will be the ongoing costs of rail maintenance and staffing, which at the moment is expected to cost between $100 million to $200 million every year.

The Honolulu rail’s record high costs are nothing new, however. When the project ballooned from $3 billion to $5 billion, it was already the highest cost per capita.

“Even at $5 billion, I can definitely say that no rail project has ever cost more per capita than Honolulu’s,” O’Toole said. “At $10 billion or whatever the final cost turns out to be, it will be even more so.”

Spurred by the massive cost overruns, many citizens across the state have signed the Grassroot Institute of Hawaii petition calling for a full independent audit of the Honolulu rail project.

To date, there has never been a full independent audit investigating the rail for fraud, waste and abuse.

My View: It is obvious that taxes will skyrocket. One tax hike was already implement the past several years. A house we know, belonging to a part-time resident, saw the property tax soar from around $12,000 to over $39,000 in just the past several years. But the City Council was clever and devious: the hike was only for non-residents, i.e. people who don’t vote in Honolulu. Apparently, the politicians don’t consider the cost to the entire state by discouraging mainland business owners to establish a branch in Honolulu.

If a business person were in charge of the government he would promote the beauties of Hawaii and advantages over other tourist destinations. You get US law and order, sanitary conditions, medical care, very friendly people and probably the most beautiful scenery, beaches, weather to be found anywhere in the world.

Instead, the politicians make it ever less attractive for business entrepreneurs to come to Hawaii, to form businesses that create well-paying jobs.