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 Vance Roley, dean of the University of Hawai'i-Manoa's Shidler College of Business.

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.)

Kevin: On the economy: Everyone keeps saying we should diversify, but what industry can we realistically substitute or augment our tourism market with? Land and labor costs are just too high to compete, are they not?

Vance Roley: I think that we can compete in knowledge industries and in high technology. The University of Hawai'i is a research engine, and that makes it possible to have a robust high-technology industry in the future. More and more financial firms are locating in Hawai'i as well, mainly from Japan.

Donna: Are there business school MBA programs for working people who want to earn an MBA, and are any such programs affordable? The financial end is important in this economy, at least for me. Other schools provide long-distance programs and programs on the Internet that are more flexible. What does the UH business school have that is similar, if anything?

Roley: To answer your question, Donna, we have a couple of programs for working adults interested in earning an MBA. One is our evening MBA program, which has served Hawai'i for decades. The other is our Executive MBA program, which meets one night each week plus Saturdays. We also have a Neighbor Island MBA program that broadcasts from our evening MBA class sessions. All programs except the Executive MBA program also have scholarship support.

Lan: Do you think it's a good idea for the government to continuously bail out companies? Do you think it will help us or hurt us in the long run?

Roley: This is an important question. Clearly, if every failing company is bailed out, then every company has the incentive to take excessive risk. This would make the taxpayer bill too high, and it would seriously distort the economy. On the other hand, confidence needs to be restored in the financial system.

John: In the past, whenever there was an economic slowdown, it seems to start from the east of the United States and sweep west until it hits Hawai'i, then the recovery would also start in the east and sweep west; Hawai'i would be the last state to feel the upturn. It looks like Hawai'i is beginning its downturn now. How long and how deep to you expect this recession to last in Hawai'i?

Roley: I think that you are correct concerning the timing of recessions on the Mainland and Hawai'i. It seems that the economy in Hawai'i is affected later. High oil prices and the slumping housing market are the main factors, and both are important to Hawai'i. The U.S. economy has been shown to be quite robust in the face of economic downturns during the past 20 years, so it may not be as bad as some are predicting.

Tina: I'm just wondering if you would be able to shed some light on the commotion with Wall Street. Why the big rush to pump money into Wall Street?

Roley: The Federal Reserve and the Treasury are worried about the liquidity in financial markets. Financial institutions are now very reluctant to lend to businesses and consumers because of the lack of liquidity. By pumping more money into Wall Street, it is hoped that confidence will be restored and financial institutions will once again be ready to lend to credit-worthy people and businesses.

Shan: What can or should be done to accelerate investment in Hawai'i's Innovation Economy?

Roley: I think that the University of Hawai'i can help. We are a major institution in the U.S. in terms of federal research funding. We can help commercialize this research through our Pacific Asia Center for Entrepreneurship. We have had a business-plan competition for six years or so, and we hope that this will help launch businesses in Hawai'i. We have also formed student teams to help start new businesses.

Paul: I'm putting you on the spot. Do you think Barack Obama or John McCain has a better plan for the economy?

Roley: I am not sure that any president has that great of an effect on the economy. What the president wants, and what Congress ultimately passes, are sometimes two different things. I am looking forward to hearing more about their plans over the next month. I have not heard many specifics at this point.

Charles: What percentage of business school students come from within the state, out of state and from foreign countries? And what is the ratio of male and female students currently enrolled at the business school?

Roley: We are evenly balanced in terms of male and female students. The residency of our students varies by program. Our undergraduate students are predominately from Hawai'i, as are our evening and Executive MBA students. In our new daytime MBA program, about a third of the students are from Hawai'i, about a third are from the Mainland and the remaining third are international.

Lisa: In regard to real estate, Donald Trump says we should buy now. Do you agree?

Roley: It all depends on the economy. If the downturn is relatively minor, then housing prices should rebound quickly. If the downturn is more severe, then it may take a while for prices to recover. I wish that I had Donald Trump's crystal ball.

Peter: From an economic perspective, do you support rail?

Roley: It will, at least, create jobs in Hawai'i. It will also likely stimulate the local economies along its route. There are, of course, negatives as well. These include the costs and other impacts on communities.

Kory: Obviously there's an important balance that needs to take place between encouraging private enterprise and at the same time protecting taxpayers and the public interest.

Do you seen the subprime and S&L fiascos and the Wall Street meltdown a product of Wall Street having too much power? Likewise, do you think the move by the SEC to raise the level of debt ratios as problematic?

How do we balance the public interest with private interest to avoid this kind of colossal mismanagement?

Roley: I think that the fundamental problem is a lack of understanding about risk. This is true of Wall Street firms as well as homeowners. When times are good, nothing looks very risky. What's the problem with a subprime mortgage when housing prices are rising rapidly and the economy is strong? In these times, risk is underestimated and it leads to poor economic decisions.

One solution is better education. Another solution is better regulation. We can help with better education through our new MS in Financial Engineering program.

Reach Jeanne Mariani-Belding at jmbelding@honoluluadvertiser.com.