Ouch: ABQ Biz First Headline: “Surprise — our economy’s taken another ‘alarming’ nosedive since May”

You simply can’t make terrible headlines up like this one from the Albuquerque Business First. It would get too depressing. A few nuggets from the article:

New Mexico’s economy nosedived between May and October, shedding thousands of jobs and labor force participants. And the state’s labor force participation rate, a measure of how many working-age residents are employed or looking for work, was the fourth-worst in the nation in October, according to the U.S. Bureau of Labor Statistics.

Also, “Between April and October, the state lost 20,382 jobs, or 2.4 percent, and nearly 24,000 labor force participants, according to preliminary BLS figures.” You can read the whole sickening thing at the link above.

Also, we are the ONLY US state where home prices continue to decline. While home price reductions are not inherently a bad thing, they may be an indicator of a weak or shrinking economy and of people leaving the state.

2012 was a bad year economically for New Mexico with only 0.2% growth. The corporate tax rate cuts take five years to phase in and represent a relatively minor reform. Perhaps they could be accelerated? That would be a start.

We know the Democratically-controlled Legislature is not particularly interested in embracing policies that have generated economic growth like reduced taxes on income, regulatory reform, or right to work. They haven’t done a very good job over the last 50+ years they’ve been in control of the Legislature. Unfortunately, the “jobs council’s” new plan doesn’t provide much hope either as it is consultant-driven requests for more spending. The plan includes:

Creating a discretionary “closing” fund that could be used to help entice out-of-state businesses to relocate to New Mexico.
Increasing funding for the state Department of Tourism’s marketing and outreach programs.
Increasing the amount of money from the state Severance Tax Permanent Fund available to be invested by the Small Business Investment Corp.
Coordinating the efforts of state agencies with regional council of government districts to improve data gathering and economic planning.

Spurring economic growth and promoting economic freedom is not even mentioned among Gov. Martinez’s top priorities on her website:

Educating Our Children
Balancing the Budget
Ensuring Transparency and Ethics in Government
Keeping New Mexicans Safe

The sorry state of New Mexico’s economy provides both opportunity and peril for Gov. Martinez. If she takes the lead and explains that our economic situation is to a significant degree the result of poor policies enacted by the Legislature over the long-term. If she doesn’t get in front of the issue, however, Democrats are going to do everything in their power to blame her for New Mexico’s poor performance under her leadership.

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3 Replies to “Ouch: ABQ Biz First Headline: “Surprise — our economy’s taken another ‘alarming’ nosedive since May””

  1. Outstanding piece, Paul. My only comment would be that Susanna has got to be bold & creative. NM’s sacrosanct “Permanent Fund” at $17 billion should be used in a 1-time manner to cut our income taxes to ZERO. Then at least, we can begin to attract out of state capital & investment so desperately needed to turn the situation around. Reforming education and our workforce metrics will take years and years.

    1. I’d love to see something like that as you know Bill. I’d be happy with her just calling out her political opposition for their poor economic management over the years. A bold agenda like your idea is going to take some political salesmanship which we have not seen to date.

  2. Gov. Martinez is tone deaf to the deplorable condition of New Mexico’s economy. By not having the economy as a top priority would suggest she doesn’t think there is a problem or chooses to ignore it and hope it will just go away.
    She certainly has lost the momentum in dealing with the many problems of this underperforming state.
    Campaigning in New Jersey is not what she should be doing.

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