The Wall Street roller coaster ride is making investors queasy – but there are reasons for Hawaii to be feeling pretty nervous about the economy as well.
The reason the stock market fell was because of fear the economy might overheat – leading to higher interest rates and inflation.
Borrowing costs have a powerful impact in Hawaii where so many families carry high mortgage debt. Our construction industry can also be slowed if higher rates push up the cost of projects and home buying.
Our large population on fixed income has less ability to adjust to higher prices. And so many workers here in retail and service industries don't have the kind of wage growth that will keep them ahead of inflation.
Of course there is good news for us too. Higher employment and wages will mean more people have money to travel, and low unemployment locally will certainly help local businesses.
But once again this is all a reminder of how Hawaii is the tail being wagged by the big dog of the U.S. economy – and we are still far from the ideal where a diversity of industries puts more of our economic future within our control.