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The Obama Presidency

What it could mean for Hawaii

(page 2 of 4)

Change, Yes, But It Will Take Time
Aside from specific issues facing Hawaii, Obama has proposed bold policy changes in areas ranging from trade and taxes to energy and healthcare. But with the current economic crisis, he may not get to all of them any time soon.

 “Just because a presidential candidate promises something doesn’t mean they’ll be able to deliver,” says Sumner La Croix, an economics professor at the University of Hawaii at Manoa.

“Clearly, when the president-elect takes office, his first priority has to be stabilizing and stimulating the economy,” La Croix says, adding that Hawaii is in for a rough 2009. “From our perspective, the No. 1 thing is to make sure that people on the Mainland consider visiting Hawaii. What that means is they have confidence restored, not so much that things are great today, but measures are being taken that will make things better for tomorrow.”

Throughout his campaign, Obama reiterated that he would bring tax relief to the middle class. “Anybody who lives here sees the middle class suffering,” La Croix says. “I think those tax cuts are about what any president would propose at this point in time. I think if we saw the current president stay in office, he’d be proposing more tax cuts for the middle class rates, too. So I think what he’s proposing would be very good for Hawaii. I don’t see the downside.”

Obama’s tax policies could take a backseat during this time, says Christopher Grandy, associate professor of public administration at UH. “I imagine that they’re still going to do the income-tax cuts for low- and middle-income people because that will be stimulative as well,” says Grandy. “I think any concern about doing something to raise income-tax rates is going to be put on hold in order for us to get through this economic crisis. Basically, concerns about the deficit seem to be out the window at this point.”

Energy Boost For Hawaii?
When the economy stabilizes, other proposals from the administration will come to light. One that could have a significant impact on Hawaii is a proposed cap-and-trade energy program. In his proposal, all pollution credits will be auctioned, with a portion going toward clean-energy projects and wildlife preservation, among other things. It could also lead to a carbon tax. This is where Hawaii could come in.

“What we’re going to find is that we are one of the places that’s really able to provide these alternative types of energy cheaper than other places,” La Croix says. On the negative side, it might increase airfare to and from Hawaii. “We’re likely to find that airfares go up on a permanent basis because of the carbon tax, and that’s likely to have a negative effect on tourism,” La Croix says. But it’s not all bad news: La Croix speculates American travelers would forego long-haul trips to China for somewhat shorter trips to Hawaii.

Other policies will generally have the same effect on Hawaii as they will on other states. Overall, an Obama presidency will not create a spectacular windfall for Hawaii. “I have to think that the president of the United States can’t take the interest of one state more seriously than the interest of other states,” Grandy says. “I would be shocked if we suddenly saw a huge amount of attention from the White House. In fact, I think that would be inappropriate.”

While the true effect of an Obama presidency is not readily known, it may erase years of misperceptions, both here and abroad.

“We think Obama’s ascension to the presidency sends a message internationally that Hawaii is not just a place for sand and surf,” says Schatz. “It also sends a message to Hawaii residents, and young people in particular, that we can compete with the best, and win.”

Yes, we can.

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