How much does the military economy cost Hawai’i?


With much media hype, the Chamber of Commerce of Hawaii and the Hawaii Institute of Public Affairs (HIPA) coordinated the public release of a study of the military’s economic impact in Hawai’i by the RAND corporation, but the report said nothing really new or remarkable.   The Honolulu Star Advertiser reported:

The U.S. military pumped up to $12.2 billion into Hawaii in 2009 — or more than 18 percent of total spending in the islands, according to the first study of its kind in nearly 50 years, scheduled for release today.

The full-time equivalent of 91,000 to 101,000 employees worked for the military here between 2007 and 2009, representing 16 percent of the work force in the state, said the RAND National Defense Research Institute’s report, “How Much Does Military Spending Add to Hawaii’s Economy?”

The COCH represents Hawai’i’s business sector and had a hand in engineering the cession of Ke Awalau o Pu’uloa (Pearl Harbor) to the U.S. through the Treaty of Reciprocity with the Hawaiian Kingdom. It regularly hypes the military appropriations earmarked for Hawai’i and lobbies for continuous military expansion in Hawai’i.   HIPA, a purportedly non-partisan and independent local think-tank, has close ties to the Democratic party insiders.

Several years ago I suggested that HIPA do a study to document the true costs and impacts of the military in Hawai’i and help the public envision what different economic alternatives might look like.  But I guess that was too much to ask.  So instead we got another report reinforcing the military-corporate-political complex.

What is new about this study is that it was produced by the prestigious RAND corporation, a military sponsored research think tank.   While the RAND study compiled the most complete data available on various aspects of the military economy in Hawai’i, which is useful in and of itself, the report does not analyze the social, cultural and environmental costs of the military driven economic and social changes in Hawai’i.  Although the report does show which industries profit most from the military spending, it fails to analyze which communities pay the highest price in the form of lost land, cultural disintegration, violations of human rights to self-determination, environmental damage and other social impacts. In this regard, the RAND study fails in the same way all other economic reports on the military impact in Hawai’i fail to consider the high cost of so much military prosperity.   The RAND study does not ask whether so much military spending has had unintended and unacceptable negative impacts that may be harmful to a more sustainable and just economic future for Hawai’i.   That will have to be left to other more creative thinkers.

The most remarkable thing about this study is the very fact that the RAND corporation produced the report for the Office of the Secretary of Defense and in partnership with the COCH and HIPA.  Why is the public paying for a study to assist and bolster the corporations that benefit most from military spending in Hawai’i?  The Project On Government Oversight (POGO) thought this was unusual and wrote a critical piece on their website “Aloha! Pentagon Think Tank Uses Taxpayer Funds to Help Hawaii Chamber of Commerce”:

The report was produced by RAND’s National Defense Research Institute, a Federally Funded Research and Development Center (FFRDC), in cooperation with the Hawaii Institute of Public Affairs and the Chamber of Commerce of Hawaii, and was sponsored by the Office of the Secretary of Defense at the Pentagon–which is to say, taxpayers foot the bill.


The Chamber of Commerce of Hawaii Military Affairs Council and The Hawaii Institute For Public Affairs hosted a $35-a-ticket-event for the report co-sponsored by defense contractor BAE Systems yesterday. The question is, should taxpayers around the country be paying for research for the Hawaii Chamber of Commerce?

POGO investigator Mandy Smithberger also delved into recent problems with FFRDC’s:

FFRDCs like RAND typically produce research on larger strategic questions and issues, with the idea of producing high quality, unbiased analysis for Pentagon decision-makers. There have been conflict of interest problems in the past (some quite notable), but generally speaking, the Pentagon loves them, and the Pentagon’s head of Acquisition has encouraged using them more to increase efficiencies. RAND specifically has produced numerous reports on military budgets and defense spending, including a report on the impacts of defense spending on the civilian economy. But it appears that a report that is specific to the economy of one state is rare, if not unprecedented.


As the Pentagon and Congress continue to consider cost-cutting measures, it may be worth further scrutiny of how FFRDCs use taxpayer resources. The House’s version of the Defense Appropriations bill reduced FFRDC spending by $125 million and has prohibited creating new defense FFRDCs.

The issue of FFRDCs recalls the disastrous attempt to establish a similar type of federal research center at the University of Hawai’i (UH)Project Kai e’e, the code name of an initiative by military and UH officials to channel missile defense research monies through UH to establish a “Pacific Research Laboratory” were fraught with abuses and corruption and led to a naval criminal investigation of key players.  This did not stop the attempts to funnel non-competed military monies to businesses and researchers in Hawai’i via a University Affiliated Research Center (UARC), a type of classified Navy research center and another project called Hawaii Technology Development Venture (HTDV), a scheme to funnel public funds into venture capital for local firms to conduct research and development for the military.  DMZ-Hawai’i /Aloha ‘Aina and the Save UH/Stop UARC coalition waged a campaign over several years to stop this encroachment of military secrecy into a public university.  In the end, despite significant wins along the way by the Coalition, the UARC project was rammed through by the political powers, although only in a highly diminished form.

This brings us back to the question of why RAND is doing a study of the military economic impact in Hawai’i and why the Office of the Secretary of Defense commissioned it.   As Smithberger writes:

But did it take a RAND study to figure out that defense spending played a significant role in the state’s economy? The study confirms what many economists already suspected. Hawaii received $195.8 million in earmarks in the FY2010 Defense bill, according to Taxpayers for Common Sense’s earmark database–and wins more earmark dollars per capita than any other state (no doubt due in part to Hawaii Senator Daniel Inouye sitting on the Senate Appropriations Committee). Moreover, it’s not clear how this report serves national security interests, or why it had to be performed by RAND.

The report is an attempt by Hawai’i’s military, corporate and political players to shore up support for military spending at a time of shrinking budgets, growing opposition to the negative impacts of military activities and war fatigue.  In contrast to the rosy picture of the military painted by the COCH, the reality of Hawai’i’s military economy is more appropriately captured by the Honolulu Star Advertiser graphic of a toy soldier raising his bayonet to stab the Hawaiian islands – a form of assault.



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