Is New Mexico in a Death Spiral or not?

Recently, we at RGF made a pretty big deal out of a Forbes report that called New Mexico the number one “death spiral” state in the nation. Albuquerque Journal economy reporter Winthrop Quigley took issue with the report and argued that New Mexico, while it has some problems, is not in a “death spiral.”

Rio Grande Foundation policy analyst Marcos Portillo wrote the following response to Quigley which appeared in Monday’s Albuquerque Journal.

Mr. Quigley may believe that Forbes’ “death spiral” claim is unwarranted, but the fact is that New Mexico’s economy is among the worst in the nation.

Quigley’s assumption is that New Mexico will continue getting infused with federal dollars into the foreseeable future. Federal funds currently make up nearly $6 billion of the $15 billion in total state expenditures. New Mexico also has one of the highest concentrations of federal employees (of about 33,000) in its various military bases and laboratories.

When the federal government tightens its belt, our economic problems could worsen.

Currently, New Mexico is: Ranked dead last in economic freedom by the recent Fraser Institute report;

Has a poverty rate that is highest in the nation;

Has an education system ranked 46th of 47 by the US Department of Education;

Has a Human Services Department website proclaiming that it is “serving one in three” even prior to the massive government expansion under ObamaCare.

Has a judicial climate ranked 44th of 50 by the US Chamber of Commerce;

And, while most states experienced some economic growth over the past year, New Mexico lost more jobs than any state but coal-dependent West Virginia.

There’s great potential in NM and many good things about the state and its people. Unfortunately, its current economic structure is dependent on the whims of bureaucrats 3,000 miles away and public policies are holding us and our citizens back.

Marcos Portillo
Additional contact information
Policy Analyst
Rio Grande Foundation

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7 Replies to “Is New Mexico in a Death Spiral or not?”

  1. Great response to Quigley. However, it is a little one-sided to attribute New Mexico’s economic problems solely to the “whims of bureaucrats 3,000 miles away.”

    It is also true that the home grown politicians and bureaucrats in our state and local governments contribute to the poverty, dependency, disorganization, and illiteracy of this state. It may also be true that there is a culture in this state that looks to Washington for its well-being.

    if New Mexico is to pull out of its downward spiral, at least two things need to happen.

    First, it is necessary to articulate a growth agenda that clearly outlines what can be done at the state and local levels to promote economic freedom and individual achievement.

    Second, we need to clearly identify and challenge the many ways that the federal government contributes to our economic and social problems.

    1. John, you are absolutely correct. I think that is the ultimate point, however, because New Mexico’s politicians have not embraced free markets, we are, at least temporarily, reliant on Washington. It would be great if we changed this relationship on our own terms right away and did so without going through “withdrawal.”

  2. The issues are less economic than cultural and political. It means something that New Mexico is a conservative state, and in many sense of the word. One of them means that it values continuity and resists change. If state and local politicians really wanted the state to change for the better, they would have made progress over the years.

    BYW, bureaucrats 3000 miles away in any direction would be bureaucrats in another country.

    1. Yes, the term “conservative,” just as the term “liberal” have lost their meanings or at least mean very different things to different people. Also, you are right, it is closer to 2,000 miles to DC, but you get the point.

  3. My impression as a newcomer to New Mexico is that there’s a lot of economic illiteracy here. Most of the people I have met work for the government or government contractors, and have no clue about how the private sector operates. The disproportionate number of legislators whose careers have been government-related makes it inevitable that New Mexico will look to government to drive its economy.

  4. To expand on what Mr. McClure says, there is actually a lot of economic illiteracy throughout the nation, including the halls of Congress. So long as our federal representative need only proclaim that they will fight to the death to keep federal $$ flowing to the labs and bases in order to get elected, the culture will be difficult to change. Perhaps falling off “the fiscal cliff” and forcing states like N.M. to fend for themselves would be a first step, but I am not sanguine about that happening. As President of the Northern New Mexico Tea Party I can say that a few of us are working hard to change the culture! Wish us luck, folks.

  5. In the ten years I have lived in Santa Fe, I have found New Mexico to be very parochial in the way it does everything. From private industry to government practices, it is tradition and family-based, with very little room for new ideas — or new people for that matter.

    Take, for instance, Governor Martinez: she was born in Texas. Most of the northern part of the state has held that against her since she declared her intent to run for office. Old wounds left over from when the Republic of Texas tried claiming Santa Fe as part of their country. Then there is her choice for Secretary of Education, Hanna Skandera. Ms. Skandera was qualified enough for California and Florida, but not good enough for New Mexico–why? She hasn’t taught school! So, Ms. Skandera suffers the ignominy of being Secretary Designee for three years out of a four-year term. These are but examples; I don’t support either of them, but I do support their efforts to try to fix things now that they are in charge.

    In the private sector where I was recruited from California, the corporation hired me for my “award-winning ideas leading to increases in business revenues.” When I arrived in New Mexico, however, it was business as usual. Each client development campaign was “different,” and “not what we’ve done before.” After several years of “this is the way we’ve always done it,” I suggested they hire a secretary to replace me and quit.

    New Mexico is firmly stuck in its own mud.

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