Lingle ' s take on the economy

Governor Lingle spoke Friday to the Hawaii Economic Association and complained that the media highlight negative economic news, repeating them like a drum beat throughout the 24-hour news cycle. The truth, she said, is that what happens on the mainland stays on the mainland, at least some of the time, so it's important to distinguish between mainland economic developments and those in Hawaii. I obviously agree or I wouldn't be reporting mainland developments in so flippant a vehicle as "Crisis at a Glance." Lingle correctly asserts that "attitudes shape actions...and actions affect the economy." Lingle then admonished the economists: "This is why the information YOU share and the statements YOU make, as economic leaders in Hawaii, are so vital." Actually, I think our local economists have been fairly measured in their comments. Even our daily newspapers are fairly measured in their articles, even if their headline writers sometimes march to a different drummer. The governor said the closing of Molokai Ranch and the shutdown of Aloha Airlines and ATA were unfortunate but cannot be blamed on the fundamentals of the economy. Hmmm. Actually, tight credit markets arguably played a role in all of these developments. In a normal capital market Aloha Airlines might have found a buyer, Molokai development foes might have found enough investment capital to bid for Molokai Ranch, and even ATA might felt able to make a lower bid for the huge military charter contract it lost. (Tight credit markets may help Gov. Lingle with her creative plan to acquire Turtle Bay, flip part of the property, and save the rest from development. The current owner is willing to talk turkey with the state government to a degree that would certainly not be the case if it had private investors banging on the door.) Lingle meant that these things weren't caused by any Hawaii economic conditions, and that is so. But to the extent that they were affected by scarce credit, expensive fuel, and so forth, they show that some of what happens on the mainland does not stay on the mainland. To some extent, though, this is a quibble -- at bottom, Lingle is merely trying to show that it's a textured situation, not all good or bad, and since two thirds of economic activity is consumer spending there is no advantage in painting an inaccurate picture of an economy descending rapidly to lower latitudes in a handbasket.