Politicians, Particularly Those at the Federal Level -- Hawaii Residents Are Hurting from High Prices and Inflation; Stop with the Status Quo and Do Something About It

Kauai County Council Chair Mel Rapozo filed a complaint with the State Department of Commerce and Consumer Affairs on behalf of Kauai residents over the price of a loaf of bread that cost over $13. This was a significant incident because it showed how Hawaii residents and politicians can work together to affect change or at least bring about attention to the absurdity that inflation has become. What will come of this complaint is unclear at the moment, but it highlights an urgency that local residents are livid over inflation and that the State of Hawaii needs to be better consumer advocates. The state must investigate price gouging.

Decades ago, State Senator Ron Menor who then chaired the Senate Committee on Consumer Protection looked into why it was costing Hawaii so much more for gasoline. It was a rallying cry back then by locals to have our elected officials put pressure on companies suspected of price gouging. Menor was applauded, but he also received flak from interest groups over this inquiry.

It turns out that gasoline prices, like the high cost of groceries, are largely determined by both international and federal policies. For gasoline, prices are mostly determined by global supply and demand. But for both gasoline and groceries in Hawaii, importation of them is the primary reason for high prices.

And it is the Federl Jones Act – which requires that all goods carried between the U.S. ports be on U.S. built and flagged ships that also are mostly owned and crewed by Americans – that’s behind the state’s costly transportation of goods.

For decades now, there has been an increasing drive for Hawaii – as an islands chain – to be exempt from this federal law or for it to be reformed to allow for more shipping competition to include foreign companies. Advocates and some economists say this would reduce the price of goods and gasoline.

But it’s not just the overseas importation that is costing a lot that forces businesses to spike cost. Local transport of goods is also a problem. A former storefront retail owner of FINA Home Accents in Honolulu explains. It costs about the same if you order a pallet of goods to go across the U.S. from say Texas to California – over thousands of miles – than it is to get that same pallet to be picked up from the pier in Honolulu to go just a few miles to Kapiolani boulevard. And that local delivery cost will need to be added onto the overall shipment from the original point of shipping to the store.

In both cases – overseas shipping and local transport – there must be more competition. This should also be the same for all industries from grocery stores to public utilities. For example, why is it so much cheaper to transport goods across the mainland has a lot to do with an abundance of trucking companies.

Balanced approach to local business
The role local government can play is smarter management engineering, one that’s balanced, not too intrusive with overregulation that stifle business, but at the same time, not overly liberal to where businesses will operate in unfair practices like price gouging.

Applied to politics – Libertarians take an extreme position that government should be hands-off everything. That’s just unbridled, chaotic capitalism. Republicans are not as extreme and more supportive of non-governmental intervention but accept some forms of regulation. But both Libertarians and Republicans locally have very little influence in local governance. Democrats tend to favor too heavily on organized interest groups that in some cases do in fact thwart competition and thus help to keep goods priced high. At the same time at the national level, Democrats (along with Republicans) have become too cozy with big corporations whose record-breaking profits are causing tremendous harm on working families.

Inflation and the Federal Reserve
Specifically, regarding inflation (pace of rising costs relative to value of dollar) again, we are dealing with federal policies when it comes to inflation with the Federal Reserve largely influencing it. The Feds will determine the federal fund rate, which influences bank’s interest rates, which affects loans and credit – which is the lifeline to businesses.

In yet this other example, we see again that local Hawaii politicians have little to no control as the Federal Reserve is independent from the U.S. government. But the federal government can influence the direction of the Federal Reserve in the appointment of its chairman of the Board of Governors of the Federal Reserve System, who is nominated by the president of the U.S. and confirmed by the U.S. Senate. But in real practice, there is little difference in political philosophy towards the status quo among both Democrats and Republicans and their selection of chairman.

Locals are hurting
There are no easy solutions or one silver bullet to alleviate high prices and inflation in Hawaii, or for that matter, in the rest of the country.

What’s clear is that an increasingly number of Americans are feeling the pangs of high prices and inflation with some groups hurting more than others. But it’s gotten to a point that even upper middle-class Americans are feeling a pinch.

How we got here is cumulative neglect by mostly the federal government relying on the same systematic tools over decades, no matter if the ruling party of the time is a Republican or Democrat. Ultimately, the modus operandi has been to side with big corporations, the powerful and organized that do not necessarily have the best interest of most Americans in mind. But rather, their own bottom line.

And these same organized groups’ members tend to be doing comparatively well and are not feeling the impact of high prices and inflation as others. They are also responsible for an outsized influence on the national economy, which currently looks good on paper, but is not really a true reflection on most Americans’ struggles.

Many Hawaii locals are upset, anxious and frustrated over their financial hardship. Some are pointing their fingers at local politicians who actually do not have immense influence as politicians at the federal level (but local politicians can make marginal impact). It becomes more frustrating for not just Hawaii residents but Americans everywhere when their federal representatives of both political parties have the same agenda of promoting the status quo. This is why we are here, with many of us rocking on the same boat, looking at the price of a loaf of bread that could be in some cases over $13, and in complete shock and anger over it.

We need more competition, more substitutes, and support for a greater number of small businesses to enter all industries. The Federal Jones Act must be reformed. We need stronger consumer protection to investigate price gouging. Citizens should also be active and report price gouging. All of these could help to at least stabilize runaway prices.