Summary:
     In many ways recent events and data indicate that the workers' compensation system is healthy. Beginning in January there will be an 18.5 percent drop in insurance premiums for Hawaii's employers, there were dramatic decreases in workers compensation benefit payments during 2004, as reported by Hawaii's Department of Labor and Industrial Relations, this would tend to indicate that such a trend would continue next year. On the other hand there is a question as to why employer insurance costs are so high. Clearly benefit payments are not part of the story as the losses reported as a proportion of the premium dollar are so low. In addition Hawai'i seems to have an unusually high rate of profit on this line of insurance. There are also troubling reports about access to the system by injured workers and the availability of medical care. In terms of benefit payments and premiums the declines cited above should help clarify some of the controversy that has been generated by workers' compensation over the past two years. [January 12, 2006]

      It has now been over a year since the terrorist attacks of September 11, 2001 and we have some important knowledge as to the response of the Hawaiian and mainland economy. At the time of the attacks their was some disagreement nationally as to whether the response would be something like a the response to a natural disaster or whether it would be short recessions and a slow recovery. In the case of a natural disaster, a hurricane or an earthquake, there is a sharp fall in output and things return quickly to normal. In the case of a prolonged recovery there is a fall in output and the economy grows too slowly to produce additional employment and there is a prolonged period of high unemployment. The latter seems to be the case nationally. Oddly enough the former appears to be something like the case for Hawai'i.