Category Archives: Economics

Understaffing causing more city problems

Two different news stories point to more problems in Honolulu due to understaffing at the city. The understaffing seems to be undercutting the ability of the city to deliver essential services.

Trash pickup was the focus of Gordon Pang’s story on Saturday in the Star-Advertiser (“City crews are catching up on garbage collection backlog“).

Pang reported that regular trash pickups were missed throughout many parts of urban Honolulu, from Hawaii Kai to Aliamanu.

Green waste wasn’t picked up on its scheduled day here in our part of Kahala this week, and our regular Saturday pickup of the standard gray bins didn’t happen. Bulky items and green waste have had problems keeping on schedule recently.

Apparently this has been happening across Honolulu.

Pang reported:

The delays in trash pickup were touched off by a shortage of refuse operators in the Solid Waste Division’s Honolulu yard, Owens said. Typically it takes 35 operators to run the Honolulu routes, but there currently are 25, he said.

As a result, an unknown number of collections were delayed by up to two days, he said.

And a similar issue has disrupted bulky-item pickup as well.

Again, Pang reported:

…bulky-item crews recently fell seven to 10 days behind schedule, Owens said.

An employee shortage is partly to blame, he said. There are no workers assigned specifically to bulky-waste pickup, but a crew is selected from the pool of manually operated truck operations that service about 20,000 households islandwide.

That pool is also contending with a shortage.

And last night KHON reported the city has been unable to keep grass mowed along public streets and in some public areas, an issue again blamed on staff shortages.

“The Dept. of Facility Maintenance is challenged with staffing right now,” said director Ross Sasamura. “We have roughly one third of our positions vacant. We don’t see any immediate resolution to that issue….

The city’s response? Artificial turf (“City says synthetic turf is solution to wild-growing grass problem“). It’s a solution that ignores the underlying problem of a lack of staff.

It’s time for a candid assessment by city officials. What will it take to actually get the city’s necessary jobs done?

Longtime residents of Kahala Avenue are a rare breed

In response to my “Kahala Trivia” post yesterday, Denby Fawcett raised a question.

Check out Kahala Avenue residents to see how many have lived there for a long time.
As a former Kahala Avenue resident. I consider Kahala and Waialae-Kahala two separate areas.

Fair question. So I took a look at property records.

According to the data I have access to, there are 390 properties with Kahala Avenue addresses.

By my count, 95 of those claim the home exemption on their property tax, meaning that they are owner occupied.

Just 21 owner occupied properties have not been sold in the past 15 years.

So that’s just 5.4% of Kahala Avenue residents who have lived there for 15 years or more.

For Kahala as a whole, the figure was about 33%.

So Denby’s right. Kahala Avenue is a world of its own.

And pushing back another decade, real estate records show that only 11 oowner occupants living along Kahala Avenue have owned their homes for at least 25 years, or just 2.8% of the total.

Next round, I’ll check how many have their tax bills delivered out of state, indicating they aren’t Hawaii residents. And perhaps I’ll try to check how many are owned by corporations or other businesses rather than by individuals.

Any other questions you would like me to be asking the data?

[I just finished this post while sitting in the McDonald’s at Kahala Mall, nursing a cup of iced tea while utilizing their public wifi. But relief is in sight. We were able to reschedule the installation by Hawaiian Tel for Friday morning, so hopefully I’ll be back in the land of the internet within a few days!]

Kicking the homeless problem down the road

It isn’t hard to find the reasons that we’re now facing a human disaster in the lack of affordable housing which has driven more and ore people onto the streets. At least part of it is official dithering and failure to address the admittedly difficult issue.

I’m looking at a Honolulu Advertiser editorial published on June 2, 2004, just over 11 years ago. I’m sure that with a bit of digging, I could turn up the same thing being written in 1994, and earlier.

The 2004 headline: “Homeless crisis requires new solutions.”

At that time, it was abundantly clear that this was problem already at the crisis stage and getting worse.

Homelessness is a problem that’s sure to get a lot worse here before it gets better. According to government figures, it’s worsened by 61 percent in the last three years. No one can take pride in the city’s dismal record of rousting homeless people from beaches, parks and malls without ever suggesting where they might be welcome.

The Honolulu City Council had just rejected funding for “a campus-like comprehensive housing and service center” for the homeless, and spending the money elsewhere.

And now the council is diverting $15.3 million intended to build Harris’ transitional center for the homeless to other concerns, mostly unrelated to homelessness. If Harris’ proposal seems outdated, we’re amazed at the lack of government agencies making homelessness a priority, and we applaud him for taking the issue on.

The editorial makes the point that it’s not homeless shelters, but permanent affordable housing, that’s required.

“The solution to homelessness is housing,” the director of the Institute for Human Services was quoted at the time.

The trend on the Mainland is not toward new homeless shelters, but permanent supportive housing. Homeless clients are assigned to management teams, which provide a cocktail of services from psychology to nutrition, including, for those who need it, management of their welfare or disability income to ensure that their rent is paid on time. The state should join the city in devising these service-delivery teams.

Once people don’t have to move from place to place, they can find stability in treatment for mental illness and drug treatment, and then jobs.

“All they need is a place to live,” Maunakea says.

And here we are, eleven years later, and almost nothing has changed except that the problems have grown, as you could have predicted.

Larry Geller, quoted here yesterday, worries that “Housing First” plans are going to be swept aside by a new enthusiasm for homeless shelters.

The crisis in homelessness isn’t confined to Hawaii. This is a national issue. It’s the kind of issue that should lead to federal funds being made available to meet local needs. And the failure of the federal government to play a constructive role, and provide needed resources to local governments, has certainly exacerbated the problem.

Greece crisis points back to our own bank regulation issues

With the financial crisis in Greece so much in the headlines, I’ve been watching the news more closely and trying to figure out what’s going on. And the answer is pretty nasty. It’s the U.S. financial crisis all over again, with policy geared to protect the interests of the big banks, which themselves propelled the increased risk for all through their lending practices. When things go south, it’s the regular people who pay the price through enforced austerity, slashed pensions, and high unemployment in order to keep those big banks from failing, or even paying their share of the cleanup.

Start with a good syndicated column yesterday by economic Joseph Stieglitz (“How I would vote in the Greek referendum“).

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

Paul Krugman’s column this week in the New York Times took a similar tack (“Greece over the brink“).

Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

But there’s another layer here.

Just as the U.S. housing depression was caused by negligent lending and the leveraging power of derivatives pushed on clients by the big banks and investment firms, Greece was also taken in by promises made by financial giant Goldman Sachs.

Several years ago, the Goldman deals with Greece were already drawing criticism.

The NY Times reported on this back in 2010 (“Wall St. Helped to Mask Debt Fueling Europe’s Crisis“).

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

Here’s Bloomberg Business in 2012 (“Goldman Secret Greece Loan Shows Two Sinners as Client Unravels“).

Greece’s secret loan from Goldman Sachs Group Inc. was a costly mistake from the start.
On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.

I’ve lost track of the article which speculated that one reason why debt relief by the European Union isn’t considered a viable option is that the secret terms of the billions in derivatives marketed by Goldman and others would treat that as a default and send the huge derivatives market into a tailspin like the 2007-2008 banking crisis.

An article in Bloomberg yesterday minimizes that risk but doesn’t mention the Goldman derivatives, leaving the total outlook a bit murky (“Default Seen Averted in Swaps by Greek Failure to Pay IMF“).

Anyway, the point here is that squeezing the people of Greece further doesn’t get at the roots of this crisis, which may lead right back here to our own banking industry.

Is GOP pushing us towards the economic cliff for political gain?

I spotted an interesting column at MarketWatch that combines political and financial analysis (“Paul B. Farrell, Countdown to the stock-market Crash of 2016 is ticking louder“).

The author’s bottom line? A fiscal policy that includes public infrastructure development could stave off a collapse in economic growth, but Republican politicians will never go for it as long as it might be seen as a plus for Democrats. They’ll choose economic disaster to avoid political concessions.

From the column:

Warning bells just keep getting louder and louder as the countdown to the Crash of 2016 keeps ticking. Wall Street’s in denial, but the Washington Post warns: “U.S. economic growth slows to 0.2 percent, grinding nearly to a halt.” USA Today hears “Bubble Talk” at the Vegas “Davos for Geeks.” Earlier the Wall Street Journal warned, “declining population could reduce global economic growth by 40%.” Then recently the “slow-growth Fed” was blamed.

Wrong, former Fed chief Ben Bernanke counterattacked: “I’m waiting for the Journal to argue for a well-structured program of public infrastructure development, which would support growth in the near term by creating jobs and in the longer term by making our economy more productive.” But for years the Fed “has been pretty much the only game in town as far as economic policy goes.” Today “we should be looking for a better balance between monetary and other growth-promoting policies, including fiscal policy.”

Fiscal policy? No, Ben, not a chance. The GOP controls economic policy. And they will never give “growth-promoting fiscal policy” victories to President Obama and Hillary Clinton before the presidential election of 2016. Never.

Anyway, it’s an interesting read. Check it out.