Mahalo to everyone who voted in the Congressional election. A special thank you to those who voted for me and supported me. Additionally, thank you to those in the 1st Congressional district who were supportive in this election. There are many reasons to be thankful. I am honored to have the opportunity to serve in the state Legislature in these great and changing times. Mahalo to everyone who supported me for my re-election. Congratulations to the winner Ed Case. The race for Congress was a wonderful 50-day adventure for me. Several campaigns for Congress had already been established statewide for months before I entered this contest. While I was an underdog in this race from the start, the opportunity to interact with people from all of the islands was very rewarding. Hawaii is a great place and its people are wonderful. I will be working hard for you in the state Legislature, which opens in just 9 days. Please reach me regarding any of your concerns. Mahalo Nui Loa. ”Chris Halford is a Republican state representative of Maui who ran for Congress in the Jan. 4 special election.”
Case Wins Congressional Seat With 43 Percent-Partisanship Ends, He Will Work Together for the Common Good
Hawaii Democrat Ed Case was elected yesterday to the second district of the U.S. House of Representatives in a special election held to fill the vacancy left by the Sept. 28 death of U.S. Rep. Patsy Mink, who had been hospitalized for more than a month with pneumonia.
Case overwhelmingly won this election with 43.2 percent of the vote. He also won an earlier special election held Nov. 30 to fill the final five weeks of Mink’s term ending in 2002. Yesterday’s victory entitles him to a two-year term in Congress. He will be sworn in Jan. 7 in Washington D.C.
Case, who beat out 43 other candidates with 33,002 votes, told HawaiiReporter.com that he won because he appeals as a moderate and fiscally conservative Democrat to the majority of voters in the second district, which encompasses the neighbor islands and rural portions of Oahu. The district was once extremely liberal, but has shifted more to the middle in the last few years.
He says Mink, who was extremely liberal and partisan, was re-elected a number of times to this district, not for her liberal views and votes, but because she provided outstanding service to her constituents who called upon her for help. She also had no one well-known opposing her, Case says.
Gov. Linda Lingle said this morning in an interview with Rick Hamada on KHVH Radio that she also believes the election results were significant. She also believes Case represents the views of many in the second Congressional district and that he pulled many of the Republican votes.
The Republican with the most votes, State Rep. Barbara Marumoto, came in fourth, with 4,497 votes or 5.89 percent.
Case said his dominance in the election shows the power of the public unions in Hawaii, once prominent in elections, may, in fact, be fading.
His main opponent, former state Sen. Matt Matsunaga who resigned to run for lieutenant governor on the Democrat ticket, was endorse and financed heavily by public unions, leading Case to say in an earlier interview that Matsunaga had “prostituted” himself to the unions and “completely sold out.” Matsunaga came in second with more than 23,000 votes or 30 percent.
A second opponent, state Sen. Colleen Hanabusa, came in third to Case and Matsunaga with nearly 8 percent of the vote or slightly more than 6,000 votes. Hanabusa, a labor attorney, was heavily endorsed by private labor unions.
Before leaving Hawaii for Washington yesterday, Case issued a statement saying he truly appreciates the trust placed in him by the people of the 2nd District and that he is “ready and eager to get going.”
His priorities will be directing the full resources of the federal government at addressing the 2nd District’s concerns, such as economic revitalization, education reform, environmental protection, health and senior care, crime and ice, transportation and infrastructure, and Native Hawaiian issues. He will continue Mink’s “exemplary record in individual constituent service,” Case says.
During the first quarter of this year, Case promises to travel throughout the 2nd District to hear from people exactly what they want and need from their federal government and to let them know what the government can do for them.
“I want to go to them and talk story in all of their communities where they live and work, and will be setting up our schedule in the next few weeks. I plan on making this traveling congressional office a regular part of my tenure,” Case says.
He also plans on meeting with all of the 2nd District’s elected officials, from Gov. Lingle through the four mayors, county council members and state legislators to ask how he can help with state and county issues.
“At this point, partisanship ends and we all have to work together for the common good,” Case says.
”Results of the Jan. 4 Special Election:”
*CASE, Ed, Democrat, 33,002 votes or 43.24 percent
*MATSUNAGA, Matt, Democrat, 23,050 votes or 30.20 percent
*HANABUSA, Colleen, Democrat, 6,046 votes or 7.92 percent
*MARUMOTO, Barbara, Republican, 4,497 votes or 5.89 percent
*McDERMOTT, Bob, Republican, 4,298 or 5.63 percent
*HALFORD, Chris, Republican, 728 votes or 0.95 percent
*KALOI, Kimo, Republican, 642 votes or 0.84 percent
*CARROLL, John (Mahina), Republican, 521 votes or 0.68 percent
*FASI, Frank F., Republican, 483 votes or 0.63 percent
*MCNETT, Mark, Non-partisan, 449 votes or 0.59 percent
*RATH, Jim, Republican, 414 votes or 0.54 percent
*HAAKE, Richard H. Republican, 212 votes or 0.28 percent
*SECRETARIO, Nelson J. Republican, 208 votes or 0.27 percent
*ANDERSON, Whitney T. Republican, 201 votes or 0.26 percent
*KEAULANA-DYBALL, Moana, Non-partisan, 91 votes or 0.12 percent
*NIKHILANANDA, Nick, Green Party, 75 votes or 0.10 percent
*COLE, Brian, Democrat, 69 votes or 0.09 percent
*KAAPU, Kekoa, Democrat, 68 votes or 0.09 percent
*MALLAN, Jeff, Libertarian, 58 votes or 0.08 percent
*MATAAFA, Sophie, Non-partisan, 52 votes or 0.07 percent
*FAIRHURST, Doug, Republican, 38 votes or 0.05 percent
*GAGNE, Mike, Democrat, 35 votes or 0.05 percent
*GOLOJUCH, Carolyn Mart, Republican, 29 votes or 0.04 percent
*GOODWIN, G. (Iimz), Green Party, 27 votes or 0.04 percent
*PAYNE, Richard (Rich) Republican, 25 votes or 0.03 percent
*WEATHERWAX, Clarence, Republican, 25 votes or 0.03 percent
*ANAND, Kabba, Non-partisan, 24 votes or 0.03 percent
*VIERRA, Dan, Non-partisan, 22 votes or 0.03 percent
*SABEY, John, Republican, 20 votes or 0.03 percent
*ROCCO, Pat, Democrat, 19 votes or 0.02 percent
*RUSSELL, Bill, Non-partisan, 18 votes or 0.02 percent
*SPARKS, Steve, Non-partisan, 17 votes or 0.02 percent
*WONG, Solomon, Non-partisan, 16 votes or 0.02 percent
*REYES, Art, Democrat, 15 votes or 0.02 percent
*BRITOS, Paul, Democrat, 13 votes or 0.02 percent
*HARLAN, S.J., Non-partisan, 11 votes or 0.01 percent
*COLLINS, Charles, Democrat, 10 votes or 0.01 percent
*RANDALL, John (Jack), Non-partisan, 9 votes or 0.01 percent
*TATAII, Steve, Democrat, 9 votes or 0.01 percent
*RETHMAN, Mike, Republican, 8 votes or 0.01 percent
*TURNER, Marshall, Non-partisan, 8 votes or 0.01 percent
*JENSEN, Herbert, Democrat, 6 votes or 0.01 percent
*GANO, Alan, Non-partisan, 3 votes or 0.00 percent
*ROWLAND, Bartle Lee, Non-partisan, 3 votes or 0.00 percent
Look at What Makes Hawaii Uncompetitive
With the economy struggling to stay afloat, lawmakers, as well as administration officials, will take another swing at trying to bolster the economy.
Unfortunately, the quick fix of tax credits seems to have the most appeal perhaps because it is simplistic in its form and shape. After all, Hawaii is known for its high burden of taxes. Unfortunately, targeted tax credits aimed at attracting a certain type of activity or industry do nothing more than ensure that the tax burden for everyone else remains high.
Why? Because unless lawmakers dramatically reduce the level of spending, they will need all the rest of us taxpayers to keep on forking over those tax dollars that keep the state spending machine fed. If that is the case, then no amount of tax credits or tax incentives is really going to move the economy forward. So what is the poor lawmaker to do about stimulating the economy and creating the jobs constituents need if tax incentives and tax credits are not the way to go?
One might start by asking what are some of the considerations in deciding to set up a business in Hawaii or for that matter investing in Hawaii. Certainly location and distance have to be major considerations. And indeed, Hawaii is one of the most isolated inhabited spots on the earth, being nearly 2,500 miles from the nearest major market. Accessing those markets has to be a critical element in weighing the decision to locate in Hawaii. Can that hurdle be overcome with innovations in telecommunications and transportation? Can lawmakers help to keep the cost of either within reasonable limits?
What about the cost of site, that is, a place to set up a company or business in Hawaii? Is there enough urbanized land available to satisfy the needs of both new and existing businesses or will zoning and land use hurdles limit what is available? Should there be a dearth of options, will that drive the cost of a site to a level that it will not pencil out for a business to locate in Hawaii?
What about the cost of regulations or at least complying with the multitude of rules? Will they make it too expensive to do business in Hawaii? This is certainly within the purview of lawmakers who have the power to impose those regulations or repeal them. While rules and regulations are necessary to ensure the health and safety of workers and consumers, how they are administered and imposed can escalate the cost of doing business.
Another area that is often overlooked is the cost of energy. There are few, if any businesses, which can do without energy, be it high technology or even a low technology farm. Hawaii has amongst the highest cost of energy in the nation as almost all of it is imported. And while there are alternate energy sources like solar and wind, the technology to capture this energy is also costly.
Lawmakers could look at ways to help reduce this cost or make capital available so that businesses can acquire this technology. While lawmakers have offered tax credits for the last quarter century, it is obvious that it will take more than tax credits to expand the use of alternate energy.
Certainly, business weighs the cost of labor in factoring whether or not they can make a go of it in Hawaii. It is not a matter of how much they will pay employees as much as it is all of the other costs of providing employment from workers’ compensation insurance to health-care insurance. With mandatory prepaid health care required of all employers, lawmakers need to work on bringing the cost of health-care insurance down. For example, over the years all sorts of services have been added to the list of what must be provided under the prepaid health-care requirement. Lawmakers need to evaluate what core health services should be included.
Last, but not least, the quality of education offered in Hawaii has to be a major consideration for businesses. Not only do businesses want a skilled and trained workforce, but they also need a quality education system if they are to attract employees to live and stay in Hawaii. If a quality education system is not available, it will be difficult to attract and retain the quality employees needed for a modern day business. While the issue of improving the education system has been hammered to death, lawmakers and administrators need to do something now rather than merely passing the blame back and forth.
There are many things that lawmakers could do to stimulate the economy. It certainly does not start or end with tax incentives and tax credits.
”’Lowell L. Kalapa is the president of the Tax Foundation of Hawaii, a private, non-profit educational organization. For more information, please call 536-4587 or log on to”’ https://www.tfhawaii.org
A Credit to the Corporate Raider
“StuartHayashi Image”
The media’s exploitation of the 2001 corporate scandals in its
hysterical (and popular) campaign to defame businesspeople in general harkens back to another anti-capitalist witch hunt they conducted in the 1980s. That era is now pejoratively dubbed “the Decade of Greed,” as it saw the proliferation of honest but controversial characters known as “corporate raiders.”
“Corporate raiders” are the mavericks who launch “hostile takeovers,”
trying to take over failing mega-corporations for themselves. (Successful companies have higher stock prices and are thus harder to buy out.)
To do this in the 1980s, a corporate raider, with the help of the
unfairly reviled investment banker Michael Milken, utilized his own smaller firm in issuing high-risk, high-yield bonds (called “junk bonds”), with which he raised enough funds to purchase a large stake in the corporation he wanted to gain control of.
Should the raider succeed in conquering the organization this way, the organization itself becomes the collateral if he cannot pay back the bondholders.
Once the raider gains enough power in the poorly-performing company, he will often either the liquidate it to spare the stockholders from even greater losses in the future, or he will implement changes in the management in order to turn the company around and save it — and this usually involves terminating many top managers.
Raiders famous for partaking in the latter activity are also called
“turnaround artists,” because they choose to improve the company’s financial status, thereby making the company’s shares — and therefore the shares that ”’they themselves”’ own — increase in value.
Not surprisingly, many people, including executives, look upon
“corporate raiding” with revulsion, pronouncing it cold-blooded and
deplorable. But is it?
When the raider buys a corporation’s stock, he does so only because the shareholders and directors consent. If they don’t want potentially unsavory individuals gaining a stake in their outfit, they should not publicly sell stock at all.
Just as important, even though rank-and-file employees commonly fear being fired during a hostile takeover, their jobs aren’t the ones in greatest jeopardy.
When raiders want to fire people in their newly acquired companies, the primary targets are almost always the top managers, for raiders know what banker John Allison knows: “[W]hen a company fails, it is practically never true that the average employee of the failed company is intrinsically less competent than the average employee of a successful company. It is almost always true that the reason for failure is poor leadership at the top of the organization.”
Therefore, unless the raider is confident that incompetent managers can clean up their own acts, he will likely terminate them before he lays off any rank-and-file worker. The rank-and-filers’ employment is only at risk if the raider believes that the top managers wasted too much company funds by hiring more people than necessary.
But isn’t it still cruel to come out of nowhere and let go of an
unsuspecting manager who cannot rescue his company? Actually, there is nothing innately immoral about that. A manager’s responsibility is to maximize the shareholders’ return on investment, without abrogating anyone’s rights, and he deserves his position mostly to the extent that he fulfills this mission.
If the manager is truly capable, then the raider will keep him in place so that he will eventually end up improving the company and making it — and therefore the raider — richer.
As a “raider,” Ron Perelman took over the Revlon corporation in its
darkest days and saved it from ruin. Revlon’s current human resources policies may not be up to par (a former employee I know was unfairly let go), but, if it were not for Perelman seizing control of the corporation, firing certain managers, and then using his own vision to guide the company back to success, the company could have gone out of business and ”’everyone”’ would have lost their employment.
Therefore, on a net balance, Perelman probably ”’saved”’ numerous jobs, and, because he nursed Revlon back to health, its stock price shot upward, profiting him and the other shareholders.
A corporate raider taking over a company through the voluntary sale of stock, firing its worst executives, and then bringing it to safety, does not violate anyone’s rights to life, liberty or property. In truth, “corporate raiders” ”’raid nothing.”’ They do, however, create more wealth for other people, like working-class and middle-class stockholders.
So “corporate raiders” do not deserve the denunciation they receive
from society, but some gratitude. They already have the cash, but it is about time that we also give them some credit.
”’Stuart K. Hayashi is the president of the Reason Club of Honolulu and an undergraduate in Entrepreneurial Studies at Hawaii Pacific University, though his opinions do not necessarily reflect that of either institution. He can be reached at mailto:radical_individualist@hotmail.com and an index of his past editorials for HawaiiReporter.com can be seen at”’ https://reason_club.tripod.com/stuart_editorials.html
Democrats Blast Proposed Bush Plan
WASHINGTON, (UPI) — One day before President George W. Bush is set to detail his newly crafted economic stimulus package, Democratic lawmakers on Sunday balked at the proposal they say will provide benefits only for wealthier Americans and do little to rejuvenate the nation’s fiscal health.
Bush is expected to announce his economic stimulus package during a speech at the Chicago Economics Club on Tuesday as the Republican-controlled 108th Congress convenes.
The plan will likely include aid for cash-poor states, tax incentives for businesses, expanded unemployment benefits and an acceleration of the president’s tax cuts approved last year.
Reports estimate the cost of the plan at between $300 billion and $600 billion over the next decade.
The debate brewing between Democratic lawmakers and their GOP counterparts will likely focus on what is increasingly described as a class warfare argument. Democrats claim the president’s proposal will benefit the wealthy while the middle class and lower income Americans are left out. Republicans waved off the notion that they were catering to the well-to-do.
Senate Democratic leader Tom Daschle of South Dakota in his party’s radio address called Bush’s plan “the wrong idea at the wrong time to help the wrong people.” Democrats are vowing to craft their own plan which they say they will unveil in the upcoming weeks.
Bush told reporters visiting his Crawford, Texas ranch last week that he was worried about job created and those who remain unemployed.
“So next week when I talk about the economic stimulus package, I will talk about how to create jobs … as well as to take care of those who don’t have a job,” Bush said.
According to administration aides, the centerpiece of the plan is 50 percent reduction of the tax on stock dividends received by individual taxpayers. Since dividends are paid from after tax corporate income, they are currently effectively taxed twice — at the corporate level as profits and at the individual level — so that, for example under common tax rates, $1 of corporate pre-tax income becomes less than 40 cents in the individual taxpayer’s pocket.
Democrats, most of whom say they have yet to see the details of the package, agreed lawmakers needed to reach a resolution on an economic stimulus plan, but said they were at odds with Republicans on how it should be done.
Incoming House Minority Leader Nancy Pelosi, D-Calif., on Friday told reporters she did not know what was in the plan but said she has received no indication that “there’s much stimulus in the package.”
“I think what you see is the administration perhaps using the term stimulus as a Trojan horse to wheel in some favorite tax breaks for the high-end that they’re so fond of. So, it remains to be seen what the president will do,” Pelosi said. “As far as the unemployment benefits that are supposed to be contained in the package, it’s certainly going to be too little, too late. But we’ll just see how little it is.”
Sen. Evan Bayh, D-Ind., told CNN that the plan must meet three tests. First, he said, it must give the “biggest bang for the buck” in terms of job creation and investment. Second, Bayh said it must help ease the burden of those who have suffered because of the downturn in the economy, and provide assistance for the unemployed and aid to states so they will not have to slash their school budgets.
“Then finally (it has to address) long-term fiscal discipline, to make sure we get the budget back into balance and don’t go back to the days of just running up huge debts with higher interest rates,” said Bayh.
Republican Sen. Chuck Hagel of Nebraska, appearing on the same program said the president would likely focus on child tax credits for parents, investments, and businesses.
“I’m anxious to see what the president’s laying out. As Senator Bayh said, there may be some fine-tuning, but I think generally the president’s on the right track,” Hagel said.
Sen. John Edwards, D-N.C., told ABC News accused Bush of “trying to pull a fast one” by using what he called the “Bush recession” to “put money in the pockets of the richest Americans over a long period of time while providing little help for regular people.”
“If this is what he thinks is going to help regular people in times of an economic downturn, it just shows how out of touch he is,” said Edwards who announced last week he would challenge Bush for the presidency in 2004.
Sen. Harry Reid, D-Nev., told NBC’s “Meet the Press” that any plan put forth by the administration should address long-term deficits and take care of people working for large corporations. Republican Sen. Don Nichols of Okla., also on “Meet the Press” said it was important for an stimulus plan to encourage investment and help grow the economy. He pointed to what he called “gross inequities” in the tax codes and said allowing small businesses to expense investments would increase stock values. That, he said, would in turn help return Americans to work.
Sen. John McCain, I-Ariz., said on CBS’ “Face the Nation” that cutting taxes on stock dividends was a good idea, but that the administration should also give low-income Americans a break in the form of an income tax holiday.
Copyright 2003 by United Press International. All rights reserved.
Seoul Seeking to Defuse Nuclear Crisis
SEOUL, South Korea, Jan. 6 (UPI) — South Korea will offer a mediation proposal to the United States and North Korea to end the current nuclear crisis, officials said Sunday.
At the strategy talks Monday and Tuesday in Washington, South Korean officials will present Seoul’s compromise proposal, a senior official at the Foreign Ministry told United Press International.
The official, speaking on condition of anonymity, said the mediation proposal comprises three stages — first, a U.S. written promise not to strike North Korea and resume heavy oil supplies, in return for the end to Pyongyang’s nuclear weapons program; second, international economic assistance for North Korea; and; third, a multinational security guarantee for North Korea, including from China and Russia.
“(South Korea’s) security ministers discussed over the weekend the compromise deal and decided to convey it to the U.S. side during the security meeting of the Trilateral Coordination and Oversight Group,” the official said.
“The three-nation meeting among (South) Korea, Washington and Japan would be used to deal with our mediation proposal and discuss how to respond if North Korea takes a positive attitude,” the official said. “We are getting closer to finding a solution to resolving the nuclear issue.”
The TCOG formalized in April 1999 is a main dialogue channel designed to frustrate North Korea’s historical strategy of aiming a diplomatic wedge between the three allies.
In another diplomatic endeavor aimed at ending the nuclear standoff, Yim Sung-joon, South Korean presidential secretary for foreign affairs and security, is to visit Washington beginning Tuesday to meet his counterpart, Condoleezza Rice, and other White House officials.
“In Washington, he will exchange views with U.S. officials on comprehensive ways to resolve the nuclear issue peacefully,” presidential spokeswoman Park Sun-sook said. “He will also brief them about our consultations with China and Russia.”
He is also to travel to Tokyo later in the week to brief Japanese officials there on his U.S. trip, Park said.
U.S. Assistant Secretary of State James Kelly was expected to fly to South Korea and for talks next week. Japanese Foreign Minister Yoriko Kawaguchi is also expected to visit Seoul this month.
South Korea also plans to offer the mediation proposal to North Korea during talks slated for next week. South Korean officials believe that the ministerial talks will be a crucial opportunity to find a diplomatic breakthrough and defuse tensions on the peninsula.
The Seoul government dispatched envoys to China and Russia last week to seek support for settling the issue through diplomacy. Russia has pledged to join international efforts to persuade North Korea to abandon steps to reactivate its nuclear program, the ministry official said. China, Pyongyang’s closest ally, also agreed last week to use its influence on North Korea to help resolve the nuclear crisis.
China and Russia are seen as being among the few states with any leverage with the regime of North Korean leader Kim Jong Il, who announced that his country would reactivate its plutonium-based nuclear program.
Seoul’s mediation proposal comes after North Korea said last week that it was willing to talk with the United States and welcomed mediators in resolving the nuclear issue.
Described the nuclear standoff as “very serious and unpredictable,” Pyongyang’s state-run Korean Central News Agency said that North Korea was still willing to negotiate.
“The DPRK (North Korea) has consistently proposed dialogue with the U.S. without preconditions and conclusion of a non-aggression treaty with the United States. There is no change in the DPRK stand to settle the nuclear issue on the Korean peninsula in a peaceful way,” it said.
“If there are countries which are concerned for the settlement of the nuclear issue on the Korean peninsula, they, proceeding from a fair stand, should force the U.S. to remain true to the international agreement so that it may discontinue its unilateral behavior,” KCNA said.
Many analysts in South Korea remain skeptical about Seoul’s successful mediation bid as Washington and Pyongyang have made no signs of easing hostile stance.
North Korea has aid it was willing to make a deal with the United States if it recognizes the North’s sovereignty and assures it of non-aggression. Washington has ruled out any talks before Pyongyang gives up nuclear program.
On Sunday, North Korea blamed the Bush administration of trying to “disarm” North Korea with demands that Pyongyang scrap its nuclear program, calling the United States the “main obstacle” of inter-Korean reunification.
Leaders of the North Korean People’s Army convened and wowed to increase the army’s combat readiness to meet “the need to bring about a fresh turn in increasing the combat capability of its units,” KCNA said.
Copyright 2003 by United Press International. All rights reserved.
Look at What Makes Hawaii Uncompetitive
With the economy struggling to stay afloat, lawmakers, as well as administration officials, will take another swing at trying to bolster the economy. Unfortunately, the quick fix of tax credits seems to have the most appeal perhaps because it is simplistic in its form and shape. After all, Hawaii is known for its high burden of taxes. Unfortunately, targeted tax credits aimed at attracting a certain type of activity or industry do nothing more than ensure that the tax burden for everyone else remains high. Why? Because unless lawmakers dramatically reduce the level of spending, they will need all the rest of us taxpayers to keep on forking over those tax dollars that keep the state spending machine fed. If that is the case, then no amount of tax credits or tax incentives is really going to move the economy forward. So what is the poor lawmaker to do about stimulating the economy and creating the jobs constituents need if tax incentives and tax credits are not the way to go? One might start by asking what are some of the considerations in deciding to set up a business in Hawaii or for that matter investing in Hawaii. Certainly location and distance have to be major considerations. And indeed, Hawaii is one of the most isolated inhabited spots on the earth, being nearly 2,500 miles from the nearest major market. Accessing those markets has to be a critical element in weighing the decision to locate in Hawaii. Can that hurdle be overcome with innovations in telecommunications and transportation? Can lawmakers help to keep the cost of either within reasonable limits? What about the cost of site, that is, a place to set up a company or business in Hawaii? Is there enough urbanized land available to satisfy the needs of both new and existing businesses or will zoning and land use hurdles limit what is available? Should there be a dearth of options, will that drive the cost of a site to a level that it will not pencil out for a business to locate in Hawaii? What about the cost of regulations or at least complying with the multitude of rules? Will they make it too expensive to do business in Hawaii? This is certainly within the purview of lawmakers who have the power to impose those regulations or repeal them. While rules and regulations are necessary to ensure the health and safety of workers and consumers, how they are administered and imposed can escalate the cost of doing business. Another area that is often overlooked is the cost of energy. There are few, if any businesses, which can do without energy, be it high technology or even a low technology farm. Hawaii has amongst the highest cost of energy in the nation as almost all of it is imported. And while there are alternate energy sources like solar and wind, the technology to capture this energy is also costly. Lawmakers could look at ways to help reduce this cost or make capital available so that businesses can acquire this technology. While lawmakers have offered tax credits for the last quarter century, it is obvious that it will take more than tax credits to expand the use of alternate energy. Certainly, business weighs the cost of labor in factoring whether or not they can make a go of it in Hawaii. It is not a matter of how much they will pay employees as much as it is all of the other costs of providing employment from workers’ compensation insurance to health-care insurance. With mandatory prepaid health care required of all employers, lawmakers need to work on bringing the cost of health-care insurance down. For example, over the years all sorts of services have been added to the list of what must be provided under the prepaid health-care requirement. Lawmakers need to evaluate what core health services should be included. Last, but not least, the quality of education offered in Hawaii has to be a major consideration for businesses. Not only do businesses want a skilled and trained workforce, but they also need a quality education system if they are to attract employees to live and stay in Hawaii. If a quality education system is not available, it will be difficult to attract and retain the quality employees needed for a modern day business. While the issue of improving the education system has been hammered to death, lawmakers and administrators need to do something now rather than merely passing the blame back and forth. There are many things that lawmakers could do to stimulate the economy. It certainly does not start or end with tax incentives and tax credits. ”Lowell L. Kalapa is the president of the Tax Foundation of Hawaii, a private, non-profit educational organization. For more information, please call 536-4587 or log on to” https://www.tfhawaii.org
A Credit to the Corporate Raider
StuartHayashi Image The media’s exploitation of the 2001 corporate scandals in its hysterical (and popular) campaign to defame businesspeople in general harkens back to another anti-capitalist witch hunt they conducted in the 1980s. That era is now pejoratively dubbed “the Decade of Greed,” as it saw the proliferation of honest but controversial characters known as “corporate raiders.” “Corporate raiders” are the mavericks who launch “hostile takeovers,” trying to take over failing mega-corporations for themselves. (Successful companies have higher stock prices and are thus harder to buy out.) To do this in the 1980s, a corporate raider, with the help of the unfairly reviled investment banker Michael Milken, utilized his own smaller firm in issuing high-risk, high-yield bonds (called “junk bonds”), with which he raised enough funds to purchase a large stake in the corporation he wanted to gain control of. Should the raider succeed in conquering the organization this way, the organization itself becomes the collateral if he cannot pay back the bondholders. Once the raider gains enough power in the poorly-performing company, he will often either the liquidate it to spare the stockholders from even greater losses in the future, or he will implement changes in the management in order to turn the company around and save it — and this usually involves terminating many top managers. Raiders famous for partaking in the latter activity are also called “turnaround artists,” because they choose to improve the company’s financial status, thereby making the company’s shares — and therefore the shares that ”they themselves” own — increase in value. Not surprisingly, many people, including executives, look upon “corporate raiding” with revulsion, pronouncing it cold-blooded and deplorable. But is it? When the raider buys a corporation’s stock, he does so only because the shareholders and directors consent. If they don’t want potentially unsavory individuals gaining a stake in their outfit, they should not publicly sell stock at all. Just as important, even though rank-and-file employees commonly fear being fired during a hostile takeover, their jobs aren’t the ones in greatest jeopardy. When raiders want to fire people in their newly acquired companies, the primary targets are almost always the top managers, for raiders know what banker John Allison knows: “[W]hen a company fails, it is practically never true that the average employee of the failed company is intrinsically less competent than the average employee of a successful company. It is almost always true that the reason for failure is poor leadership at the top of the organization.” Therefore, unless the raider is confident that incompetent managers can clean up their own acts, he will likely terminate them before he lays off any rank-and-file worker. The rank-and-filers’ employment is only at risk if the raider believes that the top managers wasted too much company funds by hiring more people than necessary. But isn’t it still cruel to come out of nowhere and let go of an unsuspecting manager who cannot rescue his company? Actually, there is nothing innately immoral about that. A manager’s responsibility is to maximize the shareholders’ return on investment, without abrogating anyone’s rights, and he deserves his position mostly to the extent that he fulfills this mission. If the manager is truly capable, then the raider will keep him in place so that he will eventually end up improving the company and making it — and therefore the raider — richer. As a “raider,” Ron Perelman took over the Revlon corporation in its darkest days and saved it from ruin. Revlon’s current human resources policies may not be up to par (a former employee I know was unfairly let go), but, if it were not for Perelman seizing control of the corporation, firing certain managers, and then using his own vision to guide the company back to success, the company could have gone out of business and ”everyone” would have lost their employment. Therefore, on a net balance, Perelman probably ”saved” numerous jobs, and, because he nursed Revlon back to health, its stock price shot upward, profiting him and the other shareholders. A corporate raider taking over a company through the voluntary sale of stock, firing its worst executives, and then bringing it to safety, does not violate anyone’s rights to life, liberty or property. In truth, “corporate raiders” ”raid nothing.” They do, however, create more wealth for other people, like working-class and middle-class stockholders. So “corporate raiders” do not deserve the denunciation they receive from society, but some gratitude. They already have the cash, but it is about time that we also give them some credit. ”Stuart K. Hayashi is the president of the Reason Club of Honolulu and an undergraduate in Entrepreneurial Studies at Hawaii Pacific University, though his opinions do not necessarily reflect that of either institution. He can be reached at mailto:radical_individualist@hotmail.com and an index of his past editorials for HawaiiReporter.com can be seen at” https://reason_club.tripod.com/stuart_editorials.html
Democrats Blast Proposed Bush Plan
WASHINGTON, (UPI) — One day before President George W. Bush is set to detail his newly crafted economic stimulus package, Democratic lawmakers on Sunday balked at the proposal they say will provide benefits only for wealthier Americans and do little to rejuvenate the nation’s fiscal health. Bush is expected to announce his economic stimulus package during a speech at the Chicago Economics Club on Tuesday as the Republican-controlled 108th Congress convenes. The plan will likely include aid for cash-poor states, tax incentives for businesses, expanded unemployment benefits and an acceleration of the president’s tax cuts approved last year. Reports estimate the cost of the plan at between $300 billion and $600 billion over the next decade. The debate brewing between Democratic lawmakers and their GOP counterparts will likely focus on what is increasingly described as a class warfare argument. Democrats claim the president’s proposal will benefit the wealthy while the middle class and lower income Americans are left out. Republicans waved off the notion that they were catering to the well-to-do. Senate Democratic leader Tom Daschle of South Dakota in his party’s radio address called Bush’s plan “the wrong idea at the wrong time to help the wrong people.” Democrats are vowing to craft their own plan which they say they will unveil in the upcoming weeks. Bush told reporters visiting his Crawford, Texas ranch last week that he was worried about job created and those who remain unemployed. “So next week when I talk about the economic stimulus package, I will talk about how to create jobs … as well as to take care of those who don’t have a job,” Bush said. According to administration aides, the centerpiece of the plan is 50 percent reduction of the tax on stock dividends received by individual taxpayers. Since dividends are paid from after tax corporate income, they are currently effectively taxed twice — at the corporate level as profits and at the individual level — so that, for example under common tax rates, $1 of corporate pre-tax income becomes less than 40 cents in the individual taxpayer’s pocket. Democrats, most of whom say they have yet to see the details of the package, agreed lawmakers needed to reach a resolution on an economic stimulus plan, but said they were at odds with Republicans on how it should be done. Incoming House Minority Leader Nancy Pelosi, D-Calif., on Friday told reporters she did not know what was in the plan but said she has received no indication that “there’s much stimulus in the package.” “I think what you see is the administration perhaps using the term stimulus as a Trojan horse to wheel in some favorite tax breaks for the high-end that they’re so fond of. So, it remains to be seen what the president will do,” Pelosi said. “As far as the unemployment benefits that are supposed to be contained in the package, it’s certainly going to be too little, too late. But we’ll just see how little it is.” Sen. Evan Bayh, D-Ind., told CNN that the plan must meet three tests. First, he said, it must give the “biggest bang for the buck” in terms of job creation and investment. Second, Bayh said it must help ease the burden of those who have suffered because of the downturn in the economy, and provide assistance for the unemployed and aid to states so they will not have to slash their school budgets. “Then finally (it has to address) long-term fiscal discipline, to make sure we get the budget back into balance and don’t go back to the days of just running up huge debts with higher interest rates,” said Bayh. Republican Sen. Chuck Hagel of Nebraska, appearing on the same program said the president would likely focus on child tax credits for parents, investments, and businesses. “I’m anxious to see what the president’s laying out. As Senator Bayh said, there may be some fine-tuning, but I think generally the president’s on the right track,” Hagel said. Sen. John Edwards, D-N.C., told ABC News accused Bush of “trying to pull a fast one” by using what he called the “Bush recession” to “put money in the pockets of the richest Americans over a long period of time while providing little help for regular people.” “If this is what he thinks is going to help regular people in times of an economic downturn, it just shows how out of touch he is,” said Edwards who announced last week he would challenge Bush for the presidency in 2004. Sen. Harry Reid, D-Nev., told NBC’s “Meet the Press” that any plan put forth by the administration should address long-term deficits and take care of people working for large corporations. Republican Sen. Don Nichols of Okla., also on “Meet the Press” said it was important for an stimulus plan to encourage investment and help grow the economy. He pointed to what he called “gross inequities” in the tax codes and said allowing small businesses to expense investments would increase stock values. That, he said, would in turn help return Americans to work. Sen. John McCain, I-Ariz., said on CBS’ “Face the Nation” that cutting taxes on stock dividends was a good idea, but that the administration should also give low-income Americans a break in the form of an income tax holiday. Copyright 2003 by United Press International. All rights reserved.
Seoul Seeking to Defuse Nuclear Crisis
SEOUL, South Korea, Jan. 6 (UPI) — South Korea will offer a mediation proposal to the United States and North Korea to end the current nuclear crisis, officials said Sunday. At the strategy talks Monday and Tuesday in Washington, South Korean officials will present Seoul’s compromise proposal, a senior official at the Foreign Ministry told United Press International. The official, speaking on condition of anonymity, said the mediation proposal comprises three stages — first, a U.S. written promise not to strike North Korea and resume heavy oil supplies, in return for the end to Pyongyang’s nuclear weapons program; second, international economic assistance for North Korea; and; third, a multinational security guarantee for North Korea, including from China and Russia. “(South Korea’s) security ministers discussed over the weekend the compromise deal and decided to convey it to the U.S. side during the security meeting of the Trilateral Coordination and Oversight Group,” the official said. “The three-nation meeting among (South) Korea, Washington and Japan would be used to deal with our mediation proposal and discuss how to respond if North Korea takes a positive attitude,” the official said. “We are getting closer to finding a solution to resolving the nuclear issue.” The TCOG formalized in April 1999 is a main dialogue channel designed to frustrate North Korea’s historical strategy of aiming a diplomatic wedge between the three allies. In another diplomatic endeavor aimed at ending the nuclear standoff, Yim Sung-joon, South Korean presidential secretary for foreign affairs and security, is to visit Washington beginning Tuesday to meet his counterpart, Condoleezza Rice, and other White House officials. “In Washington, he will exchange views with U.S. officials on comprehensive ways to resolve the nuclear issue peacefully,” presidential spokeswoman Park Sun-sook said. “He will also brief them about our consultations with China and Russia.” He is also to travel to Tokyo later in the week to brief Japanese officials there on his U.S. trip, Park said. U.S. Assistant Secretary of State James Kelly was expected to fly to South Korea and for talks next week. Japanese Foreign Minister Yoriko Kawaguchi is also expected to visit Seoul this month. South Korea also plans to offer the mediation proposal to North Korea during talks slated for next week. South Korean officials believe that the ministerial talks will be a crucial opportunity to find a diplomatic breakthrough and defuse tensions on the peninsula. The Seoul government dispatched envoys to China and Russia last week to seek support for settling the issue through diplomacy. Russia has pledged to join international efforts to persuade North Korea to abandon steps to reactivate its nuclear program, the ministry official said. China, Pyongyang’s closest ally, also agreed last week to use its influence on North Korea to help resolve the nuclear crisis. China and Russia are seen as being among the few states with any leverage with the regime of North Korean leader Kim Jong Il, who announced that his country would reactivate its plutonium-based nuclear program. Seoul’s mediation proposal comes after North Korea said last week that it was willing to talk with the United States and welcomed mediators in resolving the nuclear issue. Described the nuclear standoff as “very serious and unpredictable,” Pyongyang’s state-run Korean Central News Agency said that North Korea was still willing to negotiate. “The DPRK (North Korea) has consistently proposed dialogue with the U.S. without preconditions and conclusion of a non-aggression treaty with the United States. There is no change in the DPRK stand to settle the nuclear issue on the Korean peninsula in a peaceful way,” it said. “If there are countries which are concerned for the settlement of the nuclear issue on the Korean peninsula, they, proceeding from a fair stand, should force the U.S. to remain true to the international agreement so that it may discontinue its unilateral behavior,” KCNA said. Many analysts in South Korea remain skeptical about Seoul’s successful mediation bid as Washington and Pyongyang have made no signs of easing hostile stance. North Korea has aid it was willing to make a deal with the United States if it recognizes the North’s sovereignty and assures it of non-aggression. Washington has ruled out any talks before Pyongyang gives up nuclear program. On Sunday, North Korea blamed the Bush administration of trying to “disarm” North Korea with demands that Pyongyang scrap its nuclear program, calling the United States the “main obstacle” of inter-Korean reunification. Leaders of the North Korean People’s Army convened and wowed to increase the army’s combat readiness to meet “the need to bring about a fresh turn in increasing the combat capability of its units,” KCNA said. Copyright 2003 by United Press International. All rights reserved.