Mayor Marty interview/candidate survey now online

In case you missed it, Jim and I interviewed Albuquerque Mayor Martin Chavez on “Speaking Freely” this past Saturday on AM 1550. The link is available here. Also, the Mayor has completed his candidate survey and that is now posted online here.

The surveys of the other mayoral and council candidates who completed them are available here. Early voting for the mayoral and council races starts soon. Get educated on the issues before you go to the polls!

Albuquerque’s Convention Center: Should it be expanded?

A few weeks ago in the Albuquerque Journal business section, Dale Lockett of the Convention and Visitors Bureau and Charlie Gray of the Inkeepers Association made a push for a downtown arena and convention center expansion. Given what I knew to be the economic reality of the convention business, I simply had to respond to their claims. My letter to the Business Journal was published today and I’ve pasted it below:

I can’t believe that Dale Lockett of the Convention and Visitors Bureau and Charlie Gray of the Inkeepers Association are still pushing for a downtown arena and convention center expansion. Were they not aware of the 41 percent decline in bookings related to convention center events in 2009 relative to 2008? This is hardly an argument for pouring additional taxpayer money into a bigger convention center and additional hotel space associated with the convention center.

Albuquerque taxpayers (and businesses) should consider themselves lucky that they haven’t gone overboard in the economically-devastated convention industry like some other cities. Take Atlanta for starters, that city’s Georgia World Congress Center recently reported a $1.3 million loss. Then there is Las Vegas, another big convention town, where many of the big casinos are reporting revenue losses of 30 percent over last year.

All across America the convention industry has been in a sustained decline for the better part of a decade. If some entrepreneur felt that the trend was going to change suddenly and wanted to invest their own money in such a venture in downtown Albuquerque, I’d be all for it. Surely, however, the dying convention industry is not worthy of a bailout courtesy of Albuquerque taxpayers!

Taxpayer cash for clunker ideas

This is an excellent commentary by Paul Driessen on “Cash for Clunkers” and other programs the politicians are considering to build on the alleged “success” of the idiotic “Cash for Clunkers” program. Feel free to distribute with attribution to Mr. Driessen

First cars, next power plants. Wasting natural resources to promote eco ideologies.

It’s finally been euthanized (or so they say). But in the minds of politicians and rent-seekers, the cash-for-clunkers program was so successful that it deserved billions in taxpayer money.

Pols got to strut their green credentials. Car makers got to sell cars, via yet another subsidy. Consumers got free cash from hapless taxpayers, for new cars many otherwise wouldn’t have bought.

It was all so socially responsible and win-win – except for those poor taxpayers, who got saddled with still more debt. The other big loser of course is the antiquated notion that public policies should be based on sound science and economics.

An ice-cold bucket of reality is in order – before the next clunker idea comes along. Here are a few of the more obvious problems with pulling the plug on grandma cars.

The “high-polluting” cars that taxpayers are paying to get off the road already have 95% fewer emissions than 1970-era models. So the pollution reductions are almost nonexistent.

The gas savings are modest at best, across the US automotive fleet – and will be more than offset by the latest round of oil and gas lock-ups that Congress and the White House are already engineering. So more oil imports are on the way, regardless.

Far worse, every “clunker” has to be rendered totally inoperable. Sodium silicate gets poured into engines to freeze their components, then they’re crushed into bundles of scrap.

That means some 750,000 perfectly good cars never make it to used car lots. People who can’t afford the average $24,000 new car price have to buy a new car anyway. Used car dealers and buyers have dwindling numbers of cars to bargain for. Repair shops lose business.

Even worse, trashing all these cars is a monumental waste of precious resources – and all the energy and effort it took to extract metallic ores, hydrocarbons and other raw materials from the Earth, process and refine them, create alloys and plastics, and turn them into engines, chasses, windows, tires and interiors.

Every step in that process took enormous amounts of energy – and emitted vast quantities of carbon dioxide, other greenhouse gases and real pollutants. There is absolutely no way that these emissions and energy will ever be recouped by any savings the replacement cars might conceivably generate.

It’s like spending $720,000 for photovoltaic solar panels on the roof of the Denver Nature and Science Museum. The panels would certainly reduce conventional electricity bills. But it would take 110 years to save enough on those bills to pay for the panels – and the panels would only last 25 years.

Denver installed the panels for one reason, observes Independence Institute investigative journalist Todd Shepherd. Federal taxpayers provided a fat subsidy – enabling President Obama to have a great photo-op on the museum roof and shill for solar power, with the Rocky Mountains resplendent in the distance.

So much for that win-win scenario. The next clunker boondoggle is already on the launch pad, courtesy of T. Boone Pickens and Ted Turner. As they opined in the Wall Street Journal recently, they want to repeat the automotive “success” on a massive scale – replacing “clunker” electrical generating plants with government-mandated gas-fired versions.

The existing plants burn coal, which America has in great abundance, and which keeps electricity reliable and affordable – so that people can heat and cool their homes, industries can manufacture and transport products, companies can employ workers, hospitals can treat patients, schools can train future innovators, and America can ensure continued opportunity and prosperity.

Modern coal-fired power plants already scrub out the vast majority of real pollutants that their aged predecessors emitted, notes air quality expert Joel Schwartz. What they don’t remove is carbon dioxide.

Pickens, Turner, Gore, Hansen and Obama insist that CO2 is causing “potentially devastating climate changes.” Thousands of scientists disagree, and satellite data clearly demonstrate that global temperatures have been stable or even decreasing since 1998, even as carbon dioxide levels have risen steadily. Storms, droughts, floods and other events are in accord with historic variations, and show no statistically significant upswings, note climate experts William Gray, David Legates and Richard Keen.

But inconvenient facts and observations are irrelevant to climate alarmists. They apparently believe that assuming, asserting, decreeing and modeling climate disasters proves a crisis is nigh – and we must make painful energy, economic and lifestyle sacrifices to prevent it.

In other words, force America to eliminate existing generators and switch to power plants running on natural gas that Boone Pickens, Chesapeake Energy and a few others own in abundance – and to wind and solar power that General Electric, Vesta and other “ethical” companies will happily provide, if taxpayers fork over billions more in subsidies.

Making money by selling natural gas, building turbines and panels, and trading carbon credits on new commodities, hedge fund and derivatives markets is an irrelevant coincidence, we’re supposed to believe.

These “socially responsible” rent seekers and their friends in Congress and the White House are masters at increasing and mandating demand for natural gas – for transportation, homes, industries and power generation. Unfortunately, the friends aren’t so attentive to the supply side of the equation. They excel at locking up America’s onshore and offshore energy prospects, and imposing burdensome new regulations on lands that aren’t off limits – making it increasingly difficult to find and produce gas.

This increases demand, shrinks supplies, drives up prices, and increases profits for the lucky few who do own abundant gas supplies. Once again, consumers and taxpayers get taken for a ride.

Once again, it’s even worse from an economic, ecological and resource conservation perspective. We are being asked to destroy dozens or hundreds of perfectly good coal-fired power plants – or retrofit them under expensive carbon capture and storage mandates – simply because some special interests assume, assert, decree and model global warming disasters.

Tearing the plants down would be a monumental waste of the resources, energy, effort and emissions it took to build them. CCS technology would require billions of dollars, 25% of a power plant’s generating capacity, major increases in fuel consumption and electricity prices, thousands of miles of CO2 pipelines and massive underground storage chambers, to reduce global CO2 by an imperceptible amount.

America today is increasingly governed by lawyers, ideologues, social engineers and rent seekers. Congress has nary a real engineer, and precious few members with any business background or ability to figure out basic cradle-to-grave energy, resource, economic and pollution equations. House Speaker Nancy Pelosi views natural gas as an “alternative to fossil fuels.”

With these folks at the helm, it may be time for wise investors to look toward China and India, where reducing poverty and improving living standards guide public policy – not Hollywood movies about Climate Armageddon. Wise voters and taxpayers will join the Tea Party movement, and elect some honest brainpower, before Congress wreaks more havoc on energy, jobs and civil rights.

______________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green Power • Black Death.

The Underappreciated Role of the AMA in Driving Up Health Care Costs

Economist Milton Friedman, in his book “Capitalism and Freedom” argued passionately about the economic harms associated with professional licensing. Friedman’s basic point was that “The biggest advocates for licenses in an industry are, usually, the people in the industry, wishing to keep out potential competitors.” Unfortunately, with all the focus on the “public option,” mandates, and insurance companies, not much is being said about licensing issues.

That is why this article by Shikha Dalmia or Reason Foundation about the harms inflicted on the modern medical system by the American Medical Association (AMA) is very important. Specifically, writes Dalmia:

Doctors–and many Republicans–constantly carp about the costs of “defensive medicine” because it forces providers to perform unnecessary procedures and tests to insulate them from potential lawsuits. But excessive physician salaries contribute nearly three times more to wasteful health care spending than the $20 billion or so that defensive medicine does. “While the U.S. malpractice system is extraordinary,” the study notes, “it is only a small contributor to the higher cost of health care in the United States.” Meanwhile, other studies have found that doctors’ salaries contribute more to soaring medical costs than the $40 billion or so that the uninsured cost in uncompensated care–the president’s bete noir.

Add another issue to the list of problems with American health care for which a free market solution is demanded, but unlikely due to pressure from special interests.

New Mexico Loses Tens of Millions of Dollars in Investment Placed by Richardson Ally Correra (Again)

New Mexico lost nearly $40 million of its $55 million investment in Antares Investment Partners, a Greenwich, CT real estate investment trust. But Marc Correra, a Richardson ally, came out a lot better. As a third-party placement agent for the deal, he participated in $600,000 in fees.

The Greenwich Time concluded its investigation of Antares this past Sunday. In a section entitled “Land of Disenchantment,” the paper covered the State Investment Council’s experience with this shady operation:

The New Mexico State Investment Council, responsible for managing the state’s permanent trust funds, endowments, public education and general fund money, took a big hit because of toxic assets linked to Antares.

In 2005, New Mexico invested $55 million in a limited liability company, NorthStar SIC Holdings, that NorthStar infused into various real estate developments in its portfolio, including Antares, said Charles Wollmann, a spokesman for the State Investment Council.

“I do believe that investment went south,” Wollmann said.

New Mexico received a devastating $16 million capital return on its initial investment, which had seen its net asset value tank to $12.8 million as of the end of the first quarter of 2009, the most recent performance report available from the state.

“That’s not one that we’re happy with,” Wollmann said.

A message seeking comment from NorthStar was left Tuesday with an investor relations spokesman at the firm’s Manhattan office.

Wollmann said he was prevented from discussing New Mexico’s sour investment in NorthStar and Antares because litigation may be forthcoming. The state, he said, has “written-down” its Antares loss.

Marc Correra was the placement agent for the Northstar investment, which according to the SIC’s records (courtesy Heath Haussamen) actually amounted to nearly $90.25 million. Correra’s fees amounted to $576,917. A source in state government says the entire investment is now worthless.

Correra participated in $2 million in fees at third-party placement agent in another $90 million investment that “went south.” That is the investment, now worthless, in Vanderbilt Financial Trust. Story on that here from Trip Jennings at NM Independent.

Correra has been a generous contributor to Democrats. He gave $28,500 to Obama’s victory fund and the maximum personal contribution each to Tom Udall, Harry Teague and Ben Ray Lujan. In fact, it appears his contributions to Udall exceeded the legal limit by $1,250.

Ted Kennedy’s Legacy

Sen. Ted Kennedy was no friend of free markets and limited government, but as John Berlau of the free market Competitive Enterprise Institute notes, there was a brief time during the 1970s when Kennedy rightly saw free markets and “progressive” policies as one and the same. One wishes that this brief time period would have lasted longer.

Nick Gillespie of Reason Magazine views Kennedy’s legacy as (hopefully) the end of an era of bigger government and greater centralization. And, while I agree with Nick’s thinking that greater numbers of Americans are growing frustrated with centralization and the straight jacket it creates, I don’t know if our political system is capable of re-embracing the Constitutional principles of federalism that the founders designed to protect against the encroachment of powerful central government.

Jim and Paul to Interview Albuquerque Mayor Martin Chavez Saturday

Having already interviewed mayoral candidates Richard Romero and RJ Berry, Jim Scarantino and Paul Gessing will be interviewing their 3rd and final candidate for Albuquerque Mayor, the incumbent, Martin Chavez, this Saturday on Speaking Freely. The show airs from 9am to 10am on AM 1550 KIVA, Albuquerque’s New Talk Radio.

We will be sure to ask the Mayor about the streetcar, arena, red light cameras, and other issues as well. Call us at 505-265-1550. If you can’t tune in, or if you’d like to listen to the Romero or Berry interviews, you can check out the show podcast on the Rio Grande Foundation’s website.

Simultaneously Reforming NM Health Care and Filling the Budget Gap

On Monday, the Albuquerque Journal reported that policymakers are considering cutting Medicaid in order to shore up New Mexico’s budget deficit. All I can say is that it is about time. New Mexico’s Medicaid program has been in dire need of reform for many years now. In fact, Michael Cannon of the Cato Institute — he is going to be taking the free market position in our upcoming health care debate on Monday — visited New Mexico a few years back and discussed several reasons to reform Medicaid. Also, Drs. Harry Messenheimer and Kenneth Brown discussed potential Medicaid cost savings in a policy paper published back in 2003.

Lastly, Stephen Moses who runs the Center for Long Term Care Reform has put together a document entitled “How to Save Medicaid $20 Billion Per Year AND Improve the Program in the Process.” The document should form the basis for reforming Medicaid as it relates to long term care. As moses points out:

· Medicaid LTC recipients consume a disproportionate share of total program
expenditures. For example, consider people eligible for Medicaid AND Medicare.

· Such “dual eligibles” account for 42 percent of Medicaid spending, although they
comprise only 16 percent of Medicaid recipients.

· Dual eligibles are heavy users of long-term care and acute care services not covered by
Medicare. And Medicaid pays for their Medicare premiums and cost-sharing too.

The point is that Medicaid is a ripe target for cost savings and reform. Hopefully legislators will look at some of these “big ideas” rather than just working around the edges. Who says that you can’t enact successful health care reforms at the state level?

Nationally-syndicated columnist slams Obama’s plans for high-speed rail

Robert Samuelson is one of the best syndicated columnists in America. He leaves partisan politics alone and uses arguments based on economics to make his points. A recent column in particular attracted my attention because Samuelson made several points that I have been making about high-speed rail. The article appeared in the Albuquerque Journal and can be found here.

Samuelson writes the following about President Obama’s taxpayer “investment” in high-speed rail:

There’s only one catch (regarding Obama’s plan for high speed rail): The vision is a mirage. The costs of high-speed rail would be huge, and the public benefits meager.

President Obama’s network may never be built. It’s doubtful private investors will advance the money, and once government officials acknowledge the full costs, they’ll retreat. In a recent report, the Government Accountability Office cited a range of construction costs, from $22 million a mile to $132 million a mile. Harvard economist Edward Glaeser figures $50 million a mile might be a plausible average. A 250-mile system would cost $12.5 billion and 10 systems, $125 billion.

Concluded Samuelson, “The mythology of high-speed rail is not just misinformed; it’s antisocial. Governments at all levels are already overburdened.” I couldn’t agree more. Of course, Samuelson has some critics, but what they fail to mention is that roads are so useful that they would still be built and widely used in the absence of government (toll roads would be ubiquitous) whereas passenger rail depends heavily on government subsidies from non-rail users in order to keep chugging along.

Randal O’Toole blogs further here.