NY Governor's Secret Pay Raises Draw Criticism
By - February 17, 2009

NY Gov. Paterson has secretly granted raises of as much as 46 percent to more than a dozen staffers at a time when he has asked 130,000 state workers to give up 3 percent pay hikes because of the state's fiscal crisis, The Post has learned. The startling pay hikes, costing about $250,000 annually, were granted after the governor's "emergency" declaration in August of a looming fiscal crisis that required the state to cut spending and impose a "hard" hiring freeze. – NY Post

Dominant Social Theme: Government first – an anomaly?

Free-Market Analysis: We recently pointed out that government has a way of surviving even when times are tough. This article, excerpted above, reports on a good example of that. Governor David Paterson, a good-enough natured New York pol has been struggling with a horrendous budget deficit closing in on US$13 billion. But he took time out to give hush-hush raises to those close to him.

Of course, the article treats such events with high drama, giving readers the idea that this sort of behavior is both unusual and unanticipated. In fact, it is neither. While there may be no economic term for it, the general rule when it comes to governmental outlays is "me first" – or perhaps "me first and last." It is a kind of approach that ensures a mixed salad of public interest groups continue to receive income even while the rest of the economy is stripped bare.

The effects of this economic Rule can be seen across the globe at the moment. Of course it has always been fairly evident in Africa and South America where the impoverished citizenry makes little progress no matter who gets elected. It explains how Zimbabwe's government can survive even while citizens are reduced to eating grass. In such extreme cases, portions of the public estate are sacrificed, but inevitably the army gets paid, and important senior officials continue to receive high salaries.

We are not suggesting that citizens of Western economies will be reduced to eating grass, only that the inevitable race downhill will never be won by government types. They will lag behind, raising taxes and salaries where they can, reducing benefits, compensating key officials and supporting civil and military authorities even as municipal services dwindle and fail. Government will take care of itself first, and anyone surprised by this information has not long observed how democratic politics work.

Westerners especially have been raised to trust the governmental process, but ultimately government is basically a process not a crusade. It is a vehicle, in fact, utilized by those who acquired seats of power. Human nature being what it is, self-interest will inevitably influence legislation, with those having the most political power winning the largest share of the legislative proceeds. This is why law-making inevitably ends up benefiting certain special interests at the expense of others, and regulations crafted to help solve a problem often end up doing something else entirely. A re-read of Frederic Bastiat's (1801-1859) "The Law" might be a good idea if these statements seem anything but obvious. Accompany that with Gustav Le Bon's "The Crowd", written in 1896, and you'll soon realize that all of this outrageous behavior is quite predictable and rationale to expect within the confines of our existing social and political structures. Or to put it another way, democracy in its present form is severely flawed and poses roadblocks to the advancement of human progress.

After Thoughts

Ultimately, the "citizen" can rely on himself or herself and perhaps a close circle of relatives, friends and business associates. It is this group, bonded by a larger, interpersonal self-interest, that can provide the necessary glue for the continuation of one's professional efforts and lifestyle. Financially speaking the purchase of honest money, gold and silver in a variety of forms, provides safety during bad times. Taken together, personal and professional relationships buttressed by non-paper financial assets resemble the fundamental structures of tribal entities. It is no coincidence that such survival mechanisms run counter to the preachings of globalism.

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