‘People’s’ Republic
of Hawaii

State's generous nature first evolved
from missionary era and got a boost
from early Republicans

The controversial Forbes magazine article, "The People's Republic of Hawaii," which described Hawaii as close to a socialist state, should be read as a political tract reflecting the views of its publisher, Steve Forbes. It was Forbes who spent millions of his personal fortune to run for the Republican presidential nomination in 1996.

Forbes ran on a single plank, the flat tax. He believed fervently that he and his chauffeur should be taxed at the same flat rate on their earned income, that is, their salary and wages, but should pay no taxes on their unearned income from stock dividends and bank interest.

The article featured comments from Republicans Sen. Sam Slom, Rep. Quentin Kawana-nakoa and Maui Mayor Linda Lingle. It concluded, "Perhaps the state is waking from its long slumber," that is, will elect a Republican, Mayor Lingle, as the next governor.

Although political and polemical, the article did highlight clearly our problems and issues, and challenged some basic tenets. Many of these tenets had their origin in the missionary era or the territorial period dominated by the Republican Party.

The reviled excise tax was the invention of the Republicans in 1935. No other state has anything like it. During the Depression, businesses were hard pressed to pay taxes on their income. So the Republican Legislature changed the tax base from business income to the business transaction.

The excise tax was an astounding success in its first year, wiping out the deficit and producing a whopping $1 million surplus. Today, it is estimated that up to one-third of the excise tax is paid by six million-plus tourists, any time they eat, drink, shop, make merry or spend money in Hawaii, such as was done by the author of the Forbes article.

The Republicans in the first Territorial Legislature also introduced the personal income tax in 1901 - 10 years before Wisconsin did in 1911. Darn Socialists!

Hawaii's prepaid health insurance is decried as "runaway populism." But that health care was inspired by the Christian missionaries, who ministered to the sick and needy and established settlement houses.

Their children and white planters hired doctors and built small hospitals, some still in existence, to keep their workers healthy and productive. In postwar years, such health benefits were written into collective bargaining agreements with the rise of unions and health insurance.

When Richard Nixon became president, he proposed a national health system mandating employer insurance. In anticipation of such a system, Hawaii enacted its Prepaid Health Act in 1974 as an interim measure. However, Congress did not pass the Nixon proposal.

Standard Oil of California strongly opposed the Hawaii employer mandate and took the state all the way to the U.S. Supreme Court, which struck down the act. Our nationally respected system would have been strangled in the cradle, but our congressional delegation fought for and obtained a congressional exemption in 1982.

Although the Hawaii act was legally invalid for a number of years, Hawaii businesses continued to insure their employees so that the state has the highest percentage of insured and the best health outcomes.

The behavior of Hawaii business reflects the heritage from the native Hawaiian concept of ohana and kokua, the New England missionary practice of Christian principles and the Confucian ethics of the Asians.

Two examples of working together can be found by examining the economic troubles of Hamakua Sugar and Hawaiian Airlines. In each case, employer and employees came together, gave back as much as they could to save the companies and jobs, and lobbied the Legislature for help.

I can still see them - Fran Morgan and the sugar workers, the pilots and stewardesses - walking the halls and button-holing state legislators. I can still hear Republican leader, Gene Ward, proclaiming flatly on the House floor, "Sugar is dead."

Yes, we all knew sugar was dying, but we want to make its dying comfortable and take care of its children.

Yes, we also knew that Hawaiian Airlines might die, but we did not want it to die and leave us with 2,000 employees as orphans.

We gave the loan guarantee, which Hawaiian Airlines never used. Bruce Nobles and the employees saved the airline themselves.

Of course, as in any ohana, we disagree, quarrel and even fight, and sometimes we cannot make up our minds when the issue is fundamental and concerns how we live. The 20-year delay on H-3 is the prime example.

The H-3 fight revolves around the top policy issue in Hawaii: to develop or not develop. The delay allowed the market to decide where the city was to grow - over the mountains into the Windward side or westward to Ewa.

Windward Oahu was saved from urbanization and Kapolei became the second city. The H-3 debate redefined the policy issue - where and how to develop. The issue is now behind the Waiahole Ditch water fight.

The Forbes article did raise some valid issues which the government and bureaucracy, the political parties and the voters, management and labor - everyone - must tackle and decide.

It will take much time and debate. But the Forbes article's condescending tone vitiated its message, and nothing illustrates its disservice to the Hawaii GOP more than its summary dismissal of Hawaiian rights:

"As if all this weren't daunting enough, native Hawaiians are demanding government compensation for what their advocates claim was the illegal taking of their land more than a century ago."

The Republicans in the Legislature have been staunch supporters of Hawaiian rights. This year, all House Republicans voted against any change in revenues from ceded lands, whose Hawaiian ownership is confirmed in international law, federal legislation and state law.

The Republicans coalesced behind their colleague, Kawanana-koa, who would be king of Hawaii today if Queen Liliuokalani had not been overthrown. There was no question about property rights. We are only arguing about the amount of rent.

Economist David Ramsour describes the convoluted governmental process in Hawaii as "Oriental." True. Only one part. We are indeed Confucian but also Christian.

Above all, we are ohana and hapa. The Kanaheles, Cookes, Chun Afongs, Arakawas, Menors, etc. - all of us make up the sum. We are the people of Hawaii, Republic or not.

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Sam Lee is a former Democratic state representative
from Mililani and a retired U.S. diplomat.