• Democrats and the Economy: The New Slaves of Hawaii

    June 19, 2021 // 13 Comments »

     

    We don’t have to ask what happens when Democrats mess with the economy. We have Hawaii, frozen in COVID fear, a wonderful laboratory with the “what” as clear as a petri dish full of bacteria. It stinks. A case study in Democrats and the Economy.

     

    Hawaii exists in distinct state-lets, enclaves, socio-economic islets, maybe microbiomes. The Hawaii most people know is of course beautiful Waikiki, a place that if the darn Russians had not coined the term Potemkin Village would have taken the name for itself. Waikiki is fake, joyously fake, a kind of mellow version of the Vegas swindle, as if Ikea was the designer instead of 1950s mobsters. It exists only to separate tourists from their money. The beach is indeed gorgeous (but man-made, even that is fake) the ocean delightful, and prices are kept reasonable enough that it is accessible to a large number of people, as opposed to say Tahiti or Aruba. And for the most part the only locals a visitor will encounter are there to serve them. Back to Waikiki in a moment.

     

    A small but very important sector behind the facade of Waikiki are the wealthy, people whose two bedroom apartments near Honolulu are in the millions and whose stand alone homes on the Windward shore are in the multimillions. They live on the beaches tourists don’t visit, just barely maintaining the illusion of government-mandated public access to that soft white sand via thong-wide hidden paths between their walled compounds. The Obamas bought such a place, though many of the other super wealthy are from Asia. A careful look at names on tax records allows one to map the various Asian bubbles and recessions, with clusters of Japanese there, Chinese here, Koreans nearby, etc.
    These people have nothing to do with the rest of the Hawaiian ecology except one crucial role: they are the apex taxpayers who fund the extensive social welfare system semi-taking care of much of the rest of Hawaii. Benefits packages in Democrat-ruled Hawaii are the highest in the nation, an average of $49,175, and untaxed. For the last nine years Hawaii spent more on public welfare benefits, about 20 percent of the state budget, then it did on education. More than one out 10 people in Hawaii get food stamps, plus free lunches at school and for the elderly. Hawaii already vies with California for the nation’s highest state income tax.

    The other sources of revenue are Federal defense spending (not part of this safari) and tourism. I told you we’d get back to Waikiki soon. Visitors to the paradise of Oahu may or may not notice all those decaying apartments outside their Uber’s window between the airport and Waikiki, the tent villages on the remote beaches or along the surface roads. Few tourists get off the highway and explore, and few diverge from the round-the-island one day rental car pilgrimage to poke deep inland. It’s OK, tourists are not supposed to, and in fact are really not too welcome in many spots. This is where the bulk of Hawaiians live in a cross between what resembles rural West Virginia in per capita rusted cars and one of the nicer third world countries like Jamaica, deep in poverty but gaily painted.

    Hawaii is nearly always one of the top states in terms of homelessness, poverty, unemployment, food insecurity, and diabetes. The people behind those statistics live in a relationship with the ultra-rich that is mostly like those little fish that swim inside a shark’s gills. Unseen and unminded, somewhere between symbiotic and parasitic, depending on your politics. It is precisely such relationships which define the Third World.

     

    The thing is in many ways this eco-econosystem sort of worked pre-COVID. Because it lacks the racial tensions that burden places like New York (whites are a minority in Hawaii at 25 percent, blacks only two percent) crime is almost all intramural, people victimizing each other inside their own neighborhoods. Think of Hawaii’s poor more as herbivores who occasionally fuss over territory when really necessary and New York’s as carnivores always looking for a fresh killing grounds just because. Drugs are a horrible problem off the beaten path, but in the eyes of the rich, not really a problem as the drugs stay “over there.” Until recently when Mexican imports began arriving like invasive junk fish in a cargo hold, even Hawaii’s favorite drugs — weed and meth — were even a local product.
    COVID upset the finely-balanced system. Suddenly fear gave government the chance to run fully amuck, with nothing to limit even the stupidest ideas. Everything was done by emergency decree, no debates, no votes, no process.
    Step One was a decision to slam the door hard on Hawaii’s second largest industry, tourism, once accounting for 24 percent of the economy, and throw tens of thousands of people out of work, crippling the businesses down the food chain from them where they spent their money at the same time. Did those workers come from the Gold Coast, the multi-million dollar homes of Kahala or the always voted one of the world’s best beaches areas near Kailua? Of course not. The working poor lost their jobs. But Hawaii already had in place a robust unemployment insurance system, whose benefits were made fatter by Federal supplement money. None of these workers missed the benefits from their old job as they never had any benefits in the first place.
    Fast forward 16 months of COVID and now the Hawaiian government would like some tourists to please come back and leave money. The government would also like workers to return to their Waikiki jobs to dance hula, serve drinks, and rub suntan lotion on all those white fish-bellied visitors. The old workers are mostly saying no, and the media is awash with articles about how the jobs are unfillable and woe is us if the tourists cannot be served. Lacking capitalism’s favorite cheap labor solution, massive numbers of usable illegal aliens, the jobs are so soulless and pay so little the only way to fill them is to force people by cutting unemployment benefits and no politician in Democratic-controlled Hawaii seems ready for that.

    Those “unfillable” jobs pay about $10-12 an hour, and so the employer can stay exempt from paying into Obamacare, limit workers to under 20 hours a week. That’s $240 a week, before it being fully taxed and with social security deducted, plus the costs of going to work, such as transportation, chipping away at the edges.

    Because the Hawaiian government still restrains trade by holding bars and restaurants to limited capacity and opening hours, any job working for tips is artificially capped. As the Hawaiian government is the only U.S. state left which still requires COVID tests for entry (that program alone has cost the state over $60 million in direct costs, even as travelers are saddled with paying $120 or more per test) and is among the dwindling few that still requires full masking, many tourists stay home. Arrivals are down some 50-75 percent overall, with the once-lucrative Asian trade hovering at zero. Everytime a plane lands some media flunky headlines “Tourism is back!” but they’ll be saying it for a long time. Think cargo cult.
    The way 25 other state governments found to force people to work for low wages is to do away with the Federal supplement portion of unemployment, so people can choose between about $130 a week unemployment or $240 a week working. Hawaii, as committed to its social welfare state as any college political science sophomore is committed to his vision of socialist utopia, has no plans to drop the Federal unemployment money. While everyone thinks on what’s next, the economy is dependent on unsustainable Federal  funding, such as a bailout of $196 million in “Biden Bucks” via the American Rescue Plan Act. Another “solution” to the lack of willing workers is for the government to restrict tourism, and/or charge tourists higher fees to visit popular sites because no one can imagine that would send holidaymakers to Disneyland instead.
    Meanwhile, Hawaii has long had a brain and brawn drain problem, with both tradespeople and college graduates moving out to the mainland U.S. COVID restrictions have only made this worse as the state clings to its masks like it is still 2020. Running underneath it all like a bass line are some of the highest gas prices in a long time and accelerating inflation, the latter another example of what happens when Democrats muddle in the economy.
    At some point the Hawaiian government is going to have to decide if it will loosen COVID restrictions to flood in more tourists, and/or give out less unemployment money (because ain’t nobody got time to raise wages) if it want to return to a running economy. Or maybe Biden will do it for them, as he plans to end the Federal supplement everywhere in September to mark our second lost summer. If not, thanks to government intervention all along the system, the media will be running labor shortage articles until someone on the Ron Burgundy Action News team figures out $400 in unemployment money is a bigger number than $240 cleaning toilets.

     

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    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Posted in #99Percent, Economy, Minimum Wage

    Poor Folks

    February 24, 2019 // 21 Comments »


     
    A guy on Facebook I don’t know wrote a version of what has become a kind of set-piece article in today’s America. Here’s a portion:

    Losing The War of Attrition or How To Turn Any Normal Person Into A Broken, Angry Radical

    You are one of the millions who are employed at minimum wage. Or you are one of the millions who are euphemistically called underemployed, or you are one of the millions with no job and no prospects. You are retired- how did that happen?- or disabled- why did that happen?- and trying to survive on Social Security.

    You reach a point when you realize that getting ahead is no longer possible. After that you reach a point when you realize that holding on to what you have is no longer possible. Then you reach a point when you realize that replacing what has been lost or depleted is no longer possible.

     

    I wrote a book about this five years ago called The Ghosts of Tom Joad. No one read it. Publishers in the process of turning me down mocked me for writing about “poor people” and seemed surprised there were poor people in America who weren’t black and living in ghettos. Well, hell, then Trump happened. Because people watching a way of life — a middle class existence where the rich have more but we had some — fall away are easy targets for demagogues. Always have been. Because before we dismissed things as whataboutism we used to study them as lessons from history. Other people’s’ mistakes. History shows very clearly this economic game we’re playing ends with everyone but a small handful at the top losing badly.

    I concluded five years ago the game was already decided. Our society was already then like those photos of railroad tracks, where in the distance it seems like the two rails come together in a single point. That point is essentially feudalism, where a tiny minority owns almost everything and everyone else lives off whatever scraps they let us have. Like in the Middle Ages, where everyone farmed for the king as serfs. It’s worse than slavery, because slaves at least know they’re slaves and have the possibility, however small, of freedom. Maybe for their kids if not for themselves.
     
    We are not at the singularity, but we are inexorably headed toward it. Five additional years of data has only made that clearer; five years ago we spoke of the 1%. That number no longer matters. The new figure is .1%, an even smaller group who owns even more.

    And no, none of this is new Because Trump. Since 1980, the incomes of the very rich (the .1%) have grown faster than the economy, for about a 400% cumulative increase in wealth. The upper middle class (the 9.9%) has kept pace with the economy, while the other 90% of us, the middle class and the poor have fallen behind.

    By the way, it is these numbers which sent Barack Obama and Hillary Clinton during the 2008 campaign to both use $250,000 as the upper limit of the middle class. They sounded misguided, but it was sort of true. They just were still lumping what we’re calling here the “Upper Middle Class” and the “Middle Class” together. Just words. At present in the U.S. we have three-and-a-half classes: The .1%%, the 9.9%, everyone else hanging on, plus some people way at the bottom with basically nothing.

    But bad news for the 9.9% Since the they the most (the most the .1% does not yet have) they have the most to lose. At their peak, in the mid-1980s, people in this group held 35% of the nation’s wealth. Three decades later that had fallen 12%, exactly as much as the wealth of the 0.1% rose. And do understand the people at the top are constructing walls and throwing nails off the back of the truck to make sure no one can catch up with them. The goal of .1% is to eliminate the competition, the 9.9% below them. They’ll only effectively have it all when the ratio is down to two classes, the .1% and the 99.9%

    We are kept in place via shiny objects (500 channels, more movies and Apple watches and drugs!) and curated divisions. The ever-increasingly sharp lines between say blacks and whites are a perfect tool. Keep the groups fighting left and right and they’ll never notice the real discrimination is up and down. Some groups just found down earlier and harder, but as long as a poor white man in south Kentucky thinks he has nothing in common with a poor black man in the South Bronx they will never work together, never even see the massive economic forces consuming both equally. Forces are even now hard at work to tell us the Republican party is for whites, POC head Democrat, and any third party is a Russian shill in place to hurt the candidate you favor.

    Whether your housing is subsidized via a mortgage and that tax deduction or Section 8, you’re still on the spectrum of depending on the people really in charge to allow you a place to live. I do not see a way out of this, only maybe steps that can slow it down or cause it to speed up.
     
    Very short version summary: People like you and I fell through the cracks; we weren’t supposed to end up here but the .1% hadn’t worked out the details so they got as much as they do now and we basically ended up with bigger crumbs than we should have, especially me lucking into a “career” with no real skills.

    Our own kids may do OK with what we leave for them, but only if your son is a medical doctor will he have a decent shot at our lifestyle and only because of the “cartelization” of the profession by the AMA. The rest of our kids are unlikely to have any shot at what we ended up with.

    Sorry, I’m not a more cheerful guy but these conclusions are based on a fair amount of honest study.

     
     

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    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Posted in #99Percent, Economy, Minimum Wage