Nobel Prize winner Milton Friedman explained the principle of government spending this way. “When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it,” he said. He’s still careful about what he spends when he buys something for someone else, but “somewhat less what he spends it on.”
When a man uses someone’s else money to buy something for himself, he’s careful about what he buys but not so careful on how much he spends. “And when a man spends someone else’s money on someone else, he doesn’t care how much he spends or what he spends it on. And that’s government for you,” Friedman concluded.
That axiom applies to any government at any level, and to all amounts of money. The problem is that the more money is involved, the more difficult it is to recognize the problem. It is somewhat easier to see this principle at work on the local level, as two recent news items illustrate.
Now that he’s not running for re-election, Raleigh Mayor Charles Meeker has found something else to do. He’s started a crusade to save the downtown U.S. Post Office even through the U.S. Postal Service wants to close it because it’s loosing money.
The USPS is hemorrhaging money, a reported $8.5 billion in fiscal year 2010. The Fayetteville Street facility is among the 80 percent of postal facilities loosing money. There is another post office less than a mile way, on New Bern Street.
Democratic U.S. Reps. Brad Miller and David Price, and U.S. Bankruptcy Court Judges Randy Doub, J. Rich Leonard and Stephani W. Humrickhouse have joined Meeker’s cause. The judges, who work upstairs in the building, said one reason they want to keep the money-pit open is because – are you ready for this – the federal government recently spent $8 million to restore the building to its original 19th century splendor.
While the USPS is quick to point out that it does not use taxpayer money to operate, it is allowed to benefit from other uses of federal money, like restoring a federally-owned building it just so happens to operate a post office in. Could it be possible that the USPS is bleeding to death because it’s operating in a 19th century building while competing with businesses using 21st century technology, and actually farming out some of its work to its competitors (FedEx)?
Over in Johnston County, Smithfield town manger is on paid leave because he ordered pay raises for some town employees, up to 30 percent in one case, without bothering to get the town council’s approval or signing the authorization.
Investigators concluded that Town Manager Eric Williams orally authorized raises for some town employees, which he denies. Williams said that since he didn’t sign the proper forms the raise were not valid. The raises were paid nonetheless.
Interim town manger C.L. Gobble said there wasn’t a “great paper trail” regarding the raises and that while it was “procedurally sloppy” that “doesn’t mean anybody did anything other than what they were directed to do.”
The two largest raises went to Debbie Godwin, the town clerk and human resources director, who got a 30 percent raise totaling $20,000. Justin Merritt, the finance director, received a 22 percent raise of $15,000. Both said Williams told them to enter the pay hikes.
In typical bureaucratic fashion, the fix for this procedural sloppiness was to create more procedures. Gobble changed town policy to move responsibility for pay raises from the human resources department to the finance department and require five signatures, not just one, on any pay raise paperwork.