 Hawaii Together on the Think Tech Hawaii Broadcast Network, I'm Kili Akeena, your host and the president of the Grassroot Institute of Hawaii. We are terribly saddened that we've witnessed the decimation of Hawaii's economy in recent months, especially the tourist industry upon which we relied so heavily. But there is good news. As we move forward, there is a pathway and I've got a guest today who has seen what works as best practices across the nation and the world and we're going to talk a little bit about that. His name is Connor Boyack. He's the president of Libertas Institute in Utah. Connor founded the Institute in 2011 and he serves as its president. It's a sister organization to the Grassroot Institute in Hawaii. He was named one of Utah's most politically influential people by the Salt Lake Tribune and his leadership has led to dozens of policy reforms spanning a wide range of areas such as privacy, government transparency, property rights, drug policy, education, personal freedom and more. Some of you may know Connor's work in terms of the 20 books he's written. Best known are the Tuttle Twins books, a children's series that introduces young people to thinking that is rigorous and yet accessible in terms of economics, politics and civic principles. The California native and Brigham Young University grad, Connor lives in Lehi, Utah with his wife and two children. Connor, good to have you on the program. Aloha. Aloha, Kelly. Thanks for having me on. You know, a lot of people are familiar with the Tuttle Twins, which is a tremendous curriculum and resource for parents. Tell us a little bit about that. So this is a set of children's books that helps kids understand adult ideas, the way the world works. And so we do get into economics and politics and social issues like the golden rule. Our goal is to help kids understand these big ideas about what makes a thriving society a healthy functioning society. And this is content that is not typically taught in textbooks or by teachers. Our school curriculums tend to omit the types of ideas that we talk about, which is sad from a broader social level because these are the very concepts upon which healthy societies are based. And so the Tuttle Twins books kind of fill that void and help parents talk to their kids about these concepts, do activities and lessons and learn about these ideas together. How about that? You know, if it's simple enough and can be understood by children, do you think political leaders could understand it? Well, when asked about what the age range is for our books, I always say it's five to 11 and then members of Congress. There you go. You know, we are facing the same problem across the nation. But recovering from the coronavirus lockdowns is taking a lot longer for Hawaii than for anywhere else in the country. And part of the reason is our isolation. Part of the reason is the dependence we had on one industry, the tourist industry for the most part. But before we start talking about how we can find our pathway out of this, what are we trying to become? You know, what constitutes a good economy? What should we be looking for as the model as we emerge from this terrible season that we've been in economically? That's a great question. I would say that we need to understand what an economy is. It's very easy to abstract an economy, to have it be this kind of mathematical thing, charts and graphs, something big that I can't identify. In reality, the economy is each of us making independent choices that benefit our lives. It's us buying things at the grocery store. It's us going to work and offering our products and services to others. And so in the aggregate, that becomes the economy with millions of people all going about their business and interacting with one another through prices and buying and selling and exchanging. But if we're talking about what is going to make a strong economy, we then have to talk about what is going to benefit these specific individuals, the small business owners, the micro entrepreneurs, the young entrepreneurs trying to get a job and save for college or start their own business. We can't have a functioning healthy economy if we do not contemplate, take it to account and provide a path to success for those who are simply looking out for themselves, for their families, trying to thrive and have a safe and strong family. And so the economy is not a big business. It's not about the Jeff Bezos of the world. The economy really is about the guy down at the local coffee shop or the little food truck on the side of the road. If we don't have the right policies in place that allow them to provide their products and services to others, then we don't really have a thriving economy. What's one or two principles that we need to keep in mind as we reconstruct the economy for Hawaii and everywhere else? You mentioned one thing, the ability of people to look out for themselves. I mean, one economist a long time ago called that enlightened self-interest. Sometimes we hear the phrase free market and a lot of people misunderstand that. They think sometimes that's greed or dog eat dog. But how does the principle of free market really work in terms of empowering and building the right kind of economy? I did a trip a few years ago to Africa with some family members as part of a charity trip. And I distinctly remember driving through some of these remote villages and seeing how there was near universal cell phone adoption, right? There were no telephone wires and all the infrastructure that often has some corruption and intrigue to it in terms of which company gets the bid and so forth. These villages skipped light years ahead of all of that telecom infrastructure. And they skipped to the kind of proliferation of cell phones. And they were benefited here in these remote African villages by access to technology, remote work opportunities, all of these types of things. And so technology can be an amazing opportunity for people to thrive economically. I think the other thing though is barriers to entry, right? If there were no cell phone towers, then there wouldn't be cell phones. If there are laws in place that restrict people, then that's a problem. The thing that was interesting to me about being in Africa was seeing that people had a path forward that even the poorest people now had all kinds of economic opportunities to provide for their families that they never before did. Economics is not about helping Elon Musk get richer. It's about that person in the African village that I met finding a way to immediately triple their family's daily income and move away from being a subsistence farmer to kind of a knowledge worker or a task worker or whatever it is to improve their station and life. To me, thinking about Hawaii, thinking about my state, improving the economy, it's always about the little guy. This is something that left and right can get behind. It's about the immigrants coming in. It's about the young people needing help. It's truly about social justice, about helping people who see these injustices in their life and they're struggling to remove the barriers in their way that allow them to excel. If we have laws in place, regulations, restrictions, and other things that prevent the little guy from starting his little micro business, maybe it's a food truck, maybe it's something else, then we don't really have the right laws in place that are going to allow an economy to recover and thrive. It's always about the little guy and that's why it's so critical that we remove those barriers that might be in the way for the little guy to be able to start and to succeed. You know, Conor, what I hear you saying is that a good economy is not necessarily one in which we give things to people, in which we make promises and fulfill them in terms of their needs for housing or jobs or education or health care or anything else, but it's a system in which people have opportunities in which we remove the barriers so that they can actually succeed and actually provide for themselves. Now, in terms of taking a look at what we have to do in Hawaii, what are your thoughts about this? Is the problem we have economically now something new caused by the COVID crisis and our government reaction to it? Or were the roots of this problem in place long before the COVID crisis? For example, going into the COVID crisis, we already owed a huge amount in terms of government unfunded liabilities to the tune of over $80 billion. We were also rated as one of the worst states in terms of business conditions, conditions that would make businesses thrive. So I've been wondering this a long time, whether it was the actual crisis of COVID and the lockdowns that has caused our economic woes, or whether the roots of those woes are long before we got into that crisis. Fantastic question. And as someone coming from a state that is usually at the top of those business rankings, I will say that there is definitely a contrast that two states at opposite ends of business friendliness can experience similar lockdowns and economic impacts, but come out of it and bounce back one much more quickly than the other. And that's the key, right? We want the the negative impacts that may come justifiably in some cases, right? We want any negative effects to be temporary and time limited and narrow in their scope and their impact. And so yes, if there are exist, I mean think of think of COVID itself, right? Who are the people who are most likely to suffer a fatality? It's people who have some of these pre-existing health conditions. People who are previously healthy are likely to be among the 99.xx percent that get it, have mild symptoms, and then they continue on. I myself am one of those. I had COVID just a few weeks ago. It was extremely mild and you know I'm back at work no problems, whereas other people who have pre-existing health complications you know can can die from COVID. And so it's the same thing or I should say it's very similar with the economy. If there are pre-existing problems that complicate things when you have a new disease vector, when you have a new threat, that that can provide a fatal dose of the problem, whereas other people can weather that storm much better because they have their house in order, because they have those existing. So I think there's a lot of validity to what you're saying. It does speak to the need for broader economic reform so that as new things tend to happen, the storm can be weathered much better. We're going to dive in and start talking about what we can do economically in just a moment. But first I want to thank our viewers because we have a question that has just come in online and it's this Conner. It goes back to our discussion earlier about how we teach children. How do you teach economics while ensuring you keep politics out of it? Great question and thank you viewer for that. That is a great question. You know the proverbial lemonade stand is not political. Kids trying to learn how to make money and what it takes to entice customers and how competition works. These things are very apolitical. There of course in the economy there are business owners who are from the left end of the spectrum and the right end of the spectrum. The underlying principles apply the same and so it is very possible to teach basic economics and help children understand how markets work without having to be political about it. There are a lot of people who have political opinions kind of baked on or layered on top of economic ideas. But the economic ideas are really just about how humans interact. They're about how we exchange and buy and sell and what we prioritize and how we express our preferences in terms of what we buy and so forth. These are things that can have political implications but they don't necessarily need to be political and so it is very possible and I would argue very important that we talk to our kids about the way the world works and that language of economics to understand how humans interact through the marketplace. Conner, the big bugaboo which has been blamed for our economic calamities is the lack of diversification in the Hawaii economy. We basically have military, government spending and in the private sector we have tourism and tourism is our biggest and most profound concentrated industry of all. But legislators have talked about diversification for a long time, haven't figured out how to do that and think that the government can use law in order to bring diversification of the economy about. What are your thoughts about that? I would actually express caution to that. Central planning rarely works typically when economies are centrally planned. There are a lot of unintended consequences that people who are well-intentioned sitting in a conference room cannot anticipate and so it's very important to actually facilitate the kind of decentralized approach where innovators and entrepreneurs again don't have those barriers to entry in the way where they can go experiment and try things out and are empowered to go solve the problem rather than people coming up with a plan and having a program and kind of top-down fashion saying what it should be. We always see more success with healthy, robust economies, diversified economies when it's the entrepreneurs who are allowed and empowered and even in some cases encouraged to go solve the problem themselves and come up with that creativity that well-intentioned people in a conference room would not have been able to do on their own. Well there are a lot of people in Hawaii who think that for an industry to succeed it needs to have the government get behind it and give it tax credits and breaks and special advantages and protections and so forth. What are your thoughts about that? You know that's very enticing I would say and certainly a business owner is not going to turn down a tax break when it comes but you know it speaks to an overall fairness question about if the government should be picking winners and losers and I think generally we see across the country that creates more problems than it tries to solve. We're going to go to a quick break and come back and talk about ways in which we can rebuild the economy. My guest is Connor Boyack, the president of Libertas Institute. I'm Kayleigh Ikeena with the Grassroot Institute. We'll be right back on Hawaii Together on the Think Tech Hawaii Broadcast Network. Don't go away. Thanks a lot for not going away. I'm Kayleigh Ikeena with the Grassroot Institute. We're talking with Connor Boyack of Libertas Institute. We're going to dive right back into our conversation as we discuss how to rebuild the Hawaii economy post-COVID style. Connor we were just talking about diversification and how it's not the greatest idea for the government to choose winners and losers and back one industry over another. But I'm wondering if there are things that the government can do. You've talked a lot about regulatory sandboxes. In other words a unique environment that allows private companies to develop a product or develop services where we temporarily lift regulations from them and let them just go full speed ahead without any barriers and so forth. Do you see that this is something that could help the Hawaii diversification of our economy? Oh absolutely. Here's a very simplified example of how this would work. Let's say an entrepreneur wanted to create a new transportation network. There's a company on the mainland called Turo where it's like the Airbnb of cars. You can actually share your car with other people and they could rent it for a day or for a week. Well in many locales as in our capital city Salt Lake City there are these laws on the books that were written decades ago that never contemplated this different business style. Never contemplated that people would be able to do this and so there were laws written about car insurance and transporting other people for hire and all these kinds of things that prevented this company from being able to operate. Again it was never the intention of the people sitting the legislators or the city councilman decades ago sitting down saying we want to prevent this totally unique business model we we don't even know exists right now right that wasn't the intention but it was an unintended consequence. What a regulatory sandbox does is it is a legal programs that's set up passed by the legislature and they say look we recognize that there may be unintended consequences in the future and so we want to create a safe space if you will in which a an entrepreneur or a business that finds itself running up against a law or a local ordinance they can enroll and enter into this program and while they're in this program they are kind of shielded from any negative enforcement they're not going to be shut down they're not going to get fines they are allowed to continue going about their business notwithstanding the conflicting law for a period of one to two years provided that the regulators first do an analysis and they say hey we've concluded that this business activity is safe right no one's going to be harmed or injured or defrauded so as long as it's safe we're going to allow it to proceed so that we can watch it and then go back to the legislature and say hey look we've identified here's this problem we've been watching them everything's been safe and fine let's now go fix the law so that they can continue to proceed and so it's a very kind of kind of an incubator if you will for these new business models new companies new approaches to doing things to say look as long as we're safe let us continue to go to market because after all that is the whole idea behind regulations and laws it's to keep people safe it's not to protect certain businesses certain classes certain regions anything like that the whole idea the justification is to keep people safe so as long as you're safe and you go in the sandbox you're shielded from whatever these laws are you're allowed to build your business show the use cases that you're doing well you're you're helping the economy you're serving your customers very well and then you're able to take that evidence to the legislature the city council say hey look everything's fine can we please now fix this and update the law so that we can continue to exceed so rather than an innovative company going getting shut down and then trying to work with the legislature and and legalize their new business model or activity instead of a kind of a fist it's a handshake right it's like hey we're going to work with you we want to support entrepreneurship and innovation and so we have this little safe space where you can stay there while we figure it out and so this is something that utah is leading on many states are now kind of jumping in as well and certainly something that could help hawaii and every other state to say we want to have a way to support our entrepreneurs and build a better economy you know one of the things i like about this is it promotes innovation and it gives an incentive to businesses to try something while at the same time not leaving the taxpayers with holding the bag after something the government invests and fails and that's important the other thing i like about it is it's a natural way for developing regulation see what works and then develop your regulations after that you know our state is so regulated in terms of whether people can actually be licensed or not in terms of businesses you know that our state doesn't allow for lemonade stands that infrequent businesses by minors still require permits it's hard to believe but of course lemonade stands in and of themselves aren't going to revitalize the economy but these kinds of restrictions are part of the problem when it comes to COVID recovery wouldn't you say it does speak to what we discussed earlier and that is you know barriers in the way i gave the example of you know the people i saw in these african villages but every american and and all the people in different states the same principle applies to us as well if we want you know the i mean i think of this family i know in my state and they're an immigrant family very poor but they launched a very small business and there were some regulations preventing them from doing so fortunately they know people like me that could help them get those regulations fixed and it was a success story because clearing those regulations out of the way that family was able to launch their business and succeed and grow and pursue the american dream and so it really comes down to you know the government's role is to keep things safe but to the extent possible let's remove those barriers that prevent people from setting up the businesses they want the businesses use me the businesses that can serve their customers and and this is a definite role for the government is that where those restrictions exist we need to question them we need to question their basis their intent and determine if this is actually causing more harm especially post-covid when you know you're basically going to have to give cpr to hawaii's economy and say you know come back to life it's a great opportunity to come in and say it's something like a regulatory sandbox or other programs where we can go look at our regulations and and try and figure out how we can free up the entrepreneur to go out and serve customers and rebuild the economy it's a great time an opportunity to really try and resolve some of those existing issues i think opportunity is the key word in fact uh you've talked a lot about city and state regulations but as we get beyond the local level what about federal side do we need to envision some changes there in terms of being able to invigorate the economy you know i think you know with hawaii the jones act is the perfect example that the the answer is yes there there's absolutely federal reform that is needed to remove some of these restrictions to just allow again the economy is people like you and me wanting to do business together let's allow free people to just pursue those decisions as best as they can and so things like the jones act i think are a great example where i think a lot of people struggle is that federal reform is very difficult right there's a lot of constituencies and lobbyists and money and and intrigue and maybe corruption uh whereas at the more local level you know as a state level certainly at a local level it's much easier to have conversations with people about these issues and try and set up a dialogue with them and persuade them or discuss you know common ground and and those are conversations that are very hard to have in a country that's so massive as the united states it's much more difficult to have all those conversations enough to then change public opinion and and pursue legal reform so in short i mean certainly federal form is needed i really wish we could kind of address the jones act and and free up some of these restrictions sure but to the extent that that remains difficult to do so again back to the word opportunity you know your legislature and even people at a local level have opportunities to stand up and say you know we want to support our entrepreneurs our young people are you know you know struggling people who are just trying to you know build a better life um there are plenty of opportunities at that local level to pursue some of these changes absolutely and you certainly write the jones act affects virtually every business and consumer in hawaii and in addition to that there are other federal regulations particularly those which affect farmers and their ability to be able to actually be entrepreneurs themselves now let's bring this conversation as we close a bit down to the more personal level in terms of individuals and families that have negatively impacted how can they use their assets in a post-covid world to financially recover do you have any thoughts for them oh uh you know this is where i might say buy some bitcoin half as a joke but um i'll i'll say this i i have a podcast for young people and i've been talking a lot recently about COVID and you know there are a lot of challenges that this whole circumstances has created COVID itself the government's response to it as you point out some of the pre-existing issues that have kind of teed up some states to do better than others but where there is uh chaos there is opportunity right where there are problems there are solutions it is perhaps you know there are fewer times in our history uh that have been better times for entrepreneurs to identify problems that people are having and how can i solve them and so i would encourage people listening looking at their own families how can we kind of lift ourselves up by the bootstrap pursue the american dream you know notwithstanding all the struggles we're having you need to think from that kind of problem solving mindset like an entrepreneur would and say well what what challenges are are created and so let's look at those instead as opportunities what can i how can i take advantage of this what are the problems people have with this and can i come up with solutions that they will want and pay me money for so i can start a business even amid post COVID 19 and still pursue that american dream i still think it's possible no matter the challenges that exist right now for the right people who are dedicated focused and have that right mindset you know entrepreneurs can thrive in any type of economy because people always have problems that they are looking for solutions for and if if our families gather around the dinner table and try and have these conversations and say what can we do how can we be entrepreneurial i think you can do it and i would encourage you to do it great what an inspiring ending to our conversation today but i hope the conversation goes on for all of us Conor Boyek Libertas Institute thank you so much for spending some time with us today really appreciate you being here thanks as always for having me i appreciate it and to our everyone who's watching today we wish you the very best until next time i'm kelly atina on the think that kawaii broadcast network for the grassroot institute