Each week Editorial and Opinion Editor Jeanne Mariani-Belding hosts The Hot Seat, our opinion-page blog that brings in elected leaders and people in the news and lets you ask the questions during a live online chat.

On The Hot Seat last week was economist Leroy Laney, a professor of finance and economics at Hawai'i Pacific University, frequently tapped by First Hawaiian Bank for his economic forecasts.

Here is an excerpt from that Hot Seat session. To see the full conversation, go to The Hot Seat blog at www.hotseat.honadvblogs.com.

(Names of questioners are screen names given during our online chat.)

Jason in Kapolei: Will Hawai'i feel this recession more severely because of our isolation? I know we usually get hit a few months after the Mainland, but will it be more severe because of our reliance on imported goods?

Leroy Laney: We won't necessarily feel it more because of our isolation. The main way we will feel it is via our main export industry of tourism, which will likely continue to be down because of lower consumer confidence.

Nanakuli Bill: Inasmuch as we depend heavily on military spending and tourism, what's the outlook for Hawai'i's economy in the near future?

Laney: The military sector won't be affected much by the current national downturn because that's not where it's coming from. But tourism will continue to be hit pretty hard.

Paul: Can you explain the financial market crisis as it relates to home mortgages? Why do we not see the effect of the huge bailout in markets?

Laney: The financial market crisis actually started with home mortgages, specifically subprime ones. But it's too early to see the effects of the bailout in markets yet. With time, and the right decisions in Washington, maybe we will begin to see some effects.

Meheroo: Professor Laney, having worked in various important positions in the government, what is your assessment of the picks for the Council of Economic Advisers for President-elect Obama? What will be the role of Lawrence Summers, who is a seasoned international economist, and how will he coordinate with the other members of the economics team? Will the bailout for taxpayers be real in dollar terms?

Laney: So far, I think President-elect Obama has made some very good choices for key positions. That itself should provide some confidence in financial markets. Tim Geithner is an excellent choice for Treasury secretary, and Summers' experience should pay off in his key position. As for taxpayers, they aren't the ones being bailed out — we're just picking up the bill for all this.

I do think that it is good that Obama is acting quickly to appoint people to the key positions regarding the economy because that, too, will instill more confidence and make the transition go more smoothly.

Lisa: Since we bailed out some of the banks, why aren't they releasing/lending the money? I thought the whole point of the bailout was to stimulate more borrowing and lending.

Laney: That is the point, but the financial system has been shaken so severely that it will take some time for some banks to resume business as usual. And remember, we are entering what will likely be a serious recession, and prudent lending decisions will have to take that into account. That's what makes the current situation so difficult.

Stewart: We heard that 2010 will not be a good year for Hawai'i and that we may not come out of this recession for maybe two or three more years. What is your best advice for the average person here in Hawai'i to get through this hard time?

Laney: I think 2009 will be a recession year for Hawai'i, but it's possible for a recovery to be under way by 2010. A lot of that depends on how the national recession unfolds because I think Hawai'i will be affected more by the national recession this time than is sometimes the case. Hopefully it won't last two to three years. My best advice for the average person in Hawai'i is to hang on to your job if you can, and be assured that this is just the business cycle, which will always be with us. Better times will return, as they always do.

George: It seems to me that the current recession in Hawai'i will follow the pattern of previous recessions where once the economy in Hawai'i gets bad, many people move to the Mainland for better jobs since the recovery will begin there first. What can we do to keep people here and working in Hawai'i so that we don't have this brain drain that we've seen so many times before?

Laney: I don't think there will be that much of a lag this time, so the recovery won't necessarily begin on the Mainland first. Those moving will have to assess, as usual, whether the move is a good one and whether their new job will be permanent.

Kelly from Kaiser High School: Where does the government get these billions of dollars? Is it all just a paper trail? Will the younger generation get stuck with the bill of having to pay higher taxes?

Laney: Kelly, unfortunately the younger generation is going to get stuck with the bill because it's taxpayer money. That may seem grim, but it's the reality of the situation. The national debt will just be that much higher. But the alternative is a collapsing economy, which could affect the younger generation even more severely when they enter the job market.

Craig: What is your projection that an economic crisis will have on the real estate market in Hawai'i? Is it better to sell and get out while you can or hold on to your property in hopes that things will get better?

Laney: If you need a place to live, hold on to your house. So far, sales in Hawai'i have plummeted, but prices have declined only moderately — much better than many places on the Mainland. And eventually, things will indeed get better.

Tina: Do you think it would be a good idea for the government to bail out the Big Three automakers? Why or why not? If they are bailed out, does that mean the other businesses can ask the government for help to?

Laney: That's a good question, Tina. The collapse of the automakers would have a big impact on the U.S. economy, but the government has to draw the line somewhere. If it becomes known that the government will bail out every industry that comes begging to Washington, then a moral hazard sets in. That is, firms will take imprudent risks because they know they can get bailed out. And where does government draw the line anyway? Banks like Citigroup have their tentacles out into all sectors of the economy, but manufacturing industries are different. It may be that a structured bankruptcy is the best solution for Detroit.