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Honolulu Lite

by Charles Memminger

Friday, August 4, 2000

Other people’s
money easy to spend

The Michael Kahapea Ewa Villages rip-off is a perfect example of what I call "The P.J. Principal of Economics" in action. And while I agree that Mayor Jeremy Harris didn't hold a gun to Kahapea's head and force him to steal nearly $6 million of OUR money and the City Council didn't stuff the burly bureaucrat's pockets with cash, they were certainly in on the kill.

That doesn't mean Kahapea is not guilty of being a greedy thief, not to mention a big dummy. Harris, Mufi Hannemann, the rest of the City Council (except for Duke Bainum) and city department heads from the top down put a huge cookie jar on the table and decided not to watch it. That was stupid. Kahapea reached into the cookie jar and stole the loot. His defense? Everyone made it so EASY for me!

The justice system is based on the idea that the more money you steal, the longer you stay in jail. Future thieves should keep this calculation in mind: Figure out how much time you are willing to do in prison and only steal that amount of money. Simple.

It was, however, the P.J. Principal of Economics that made stealing nearly $6 million from the government as easy as rolling a drunk.

The P.J. stands for P.J. O'Rourke, the Rolling Stone writer who I have quoted here before. In his book, "All The Trouble in the World," P.J. explains the four ways in which money is spent. (He credits economists Milton and Rose Friedman with coming up with this theory first.) They are:

1. You spend your money on yourself.
2. You spend your money on other people.
3. You spend other people's money on yourself.
4. You spend other people's money on other people.

Now, when you spend your own money on yourself, that's when you are the most careful. Most of us don't have a lot of our own money to spend on ourselves, so spending hurts. No. 2 is even harder. You might feel like splurging on yourself from time to time, say, buying a shirt at Neiman Marcus. But if you have to buy the same item for someone else, you'll end up in Sears. No. 3 is cool, spending other people's money on yourself. This could be called "sugar-daddy-ism" but there are all kinds of ways to get your hands on other people's money. Finally, spending someone else's money on someone else, which is the least accountable and irresponsible way to spend money. It's not your money, so who cares?

You can tell from the list that the government would work best if it adhered to the first example, that is, it is our money government is supposed to be spending on us so lawmakers should be careful with it.

Unfortunately, government adheres to the last example, which is why Kahapea had such an easy time getting his fingers around all that cash. From city officials' point of view, the money in the Ewa Villages project wasn't theirs and was being spent on someone else. So they didn't bother to make sure it was being well spent.

This was a perfect example of delegating irresponsibility. Kahapea, recognizing the flaw in the system, invoked principal No. 3, spending other people's money on oneself. In Las Vegas, he enjoyed high stakes gambling. Had it been his money, he would have been on the quarter slots.

So there you go. Kahapea's going to jail and we're out $6 million. And I'm sure we'll put people in office from now on who won't let this kind of thing happen again. Yeah. Right.

Charles Memminger, winner of
National Society of Newspaper Columnists
awards in 1994 and 1992, writes "Honolulu Lite"
Monday, Wednesday and Friday.
Write to him at the Honolulu Star-Bulletin,
P.O. Box 3080, Honolulu, 96802
or send E-mail to

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