October 13th, 2009 :: Permalink
Welcome to my brothers and sisters in New Mexico. I sent this letter to our president on behalf of the people of Hawai'i but the economic rationale for requesting federal assistance for this state applies equally to New Mexico. I have been asking both govenors to reconsider their actions to cut state payrolls and state employee salaries since the financial crisis began in the fall of 2008 - see history here.Aloha Honorable President Obama ~
The Obama administration directed Congress to pass an economic stimulus package (American Recovery and Reinvestment Act of 2009) totaling $787 billion. At this time less than half these funds have been allocated.
Currently there are 28 state governments with budget shortfalls greater than $1 billion. Hawai'i's latest estimate puts their deficit slightly under a billion (for two years) and New Mexico's shortfall appears to be about half this amount. If the federal government, the right hand, works to stimulate our economy while a majority of our 50 states, the left hand, layoffs state employees or reduces their pay through salary cuts or furloughs, we negate the positive stimulus on our economy.
Nobel-awarded economist, Paul Krugman, wrote in the NY Times (10.11.09), "One lesson from the Great Depression is that you should never underestimate the destructive power of bad ideas." To have the left hand reduce spending while the right hand is trying to stimulate the economy is simply a bad idea. We need our governors to coordinate their recovery efforts with President Obama. This is the ONLY way to ensure, as Krugman warns, that we do not collapse into, "a prolonged era of sluggish growth and very high unemployment."
I would like to begin by congratulating you on being awarded the Nobel Peace Prize. It was most deserved. Let me know how I may assist you ...
I am writing on behalf of friends and family - over 1.3 million people - who make up my 'ohana in Hawai'i. This 'ohana is struggling greatly at this time due to the financial crisis.
As you are aware Hawai'i represents a unique state in our national tapestry. How many young people have been married in this paradise or started a new family by celebrating their honeymoon on one of the islands? How many people save for years so they may recharge their energy in this remote and peaceful location? Millions come here each year to discover their passion and reclaim their youth.
As Hawai'i serves a particular niche in America, this also makes the state overly dependent upon tourism. The anemic global economy is wrecking havoc across the islands. Yet Hawaiians are a rugged and resourceful people, as you know. They have a proud history of overcoming difficult times and this character is what strengthens their culture and 'ohana.
Conditions are somewhat different this time. Had the island been hit with a natural disaster such as a tsunami, people could have returned to their roots to rebuild. They have experience dealing with similar tragedies and would soon turn the challenges into victories. These resourceful people will eventually beat this financial upheaval, but this will take time - and time is what we do not have right now.
State government is currently facing an approximate billion dollar shortfall. This figure is an estimate for two years due to Hawai'i's biennial legislative period. Relative to our national concerns, a billion is not a large sum of money. Yet to the people of Hawai'i who always face economic challenges, due in part to living in the middle of the Pacific ocean, this added burden threatens to collapse our basic infrastructure.
This financial tsunami hit without warning. As the state must balance its ledgers, leaders have decided to slash budgets and personnel from public ranks. This plan is creating tremendous frustration and increasing fear among residents.
As you know some leaders also have an ideological disdain for government and this financial crisis can be used as an excuse to strip the efficiency and effectiveness from the public sector. This leaves citizens in great peril.
Let me give you an example of the difficulties residents face. In an effort to balance the state's budget, Governor Lingle demanded 17 unpaid furlough days for teachers this year. This amounts to about an 8% cut in pay, yet these 17 Furlough Fridays leave parents and their Keiki without instruction or supervision. Hawai'i's education system has historically been challenged relative to mainland districts and these cuts only dig deeper.
Thus I am asking for your help. I am an economist and lean toward Keynesian principles under such conditions. The decision to contract services and reduce pay to nearly 50,000 residents does not make sense within this crisis paradigm. As you are working to stimulate our economy from Washington, we cannot have 50 states contracting in the opposite direction from localities.
I have a simple request ... send Hawai'i ONE BILLIONS DOLLARS to shore up our state government for two years. This will keep essential services running and paychecks coming for public workers. In turn public workers will be able to continue spending to help reinvigorate the private sector. I believe this will be one of the best investments of the Recovery Act. This will also give Hawai'i's leaders time to trim public programs in a rational and logical fashion.
As Hawai'i's favorite son who is fondly known here as "Uncle Barack," I ask you to look closely at this situation. During the 2008 presidential campaign, you won a major debate point with the American people against John McCain when you pointed out his plan to reduce government spending would be similar to using a hatchet. As you understand how government works, you said you preferred to use a scalpel.
Govenor Lingle's plan will result in a hatchet being taken to our state government and this will regress programs greatly. Years of work and millions of dollars that went toward building a lean and efficient public sector will be destroyed overnight - essentially due the ill-conceived and irresponsible gambling with our money by greedy investors on Wall Street.
Mahalo nui loa for all that you are doing for our nation and the world. I know I speak for all Hawaiians when I wish you aloha. You are a great inspiration to us and we appreciate your dedication to bring greater pono to our world.
Thank you in advance for considering this request. Over 1.3 million people anxiously await your assistance.