Economic Freedom of the World 2006

The Cato Institute has just released its 10th annual report on Economic Freedom. Whether it be big limitations or small limitations New Mexico continues to remain unaware of the benefits of economic freedom. For example, here is an excerpt from the press release:

“Economic freedom is unambiguously good for the poor, not just in terms of incomes, but also in terms of the whole range of development indicators such as longevity, access to clean water, or the extent of child labor,” states Ian Vásquez, director of the Cato Institute’s Project on Global Economic Liberty.

Check it out.
Update: Professor Boudreaux comments on the link between freedom and prosperity.

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NM’s Interior Design Cartel

New Mexico is one of five states which license the phrases “Interior Design,” “Interior Designer,” and “Designer.” Anyone can practice interior design in New Mexico, licensed or not, but you need the state’s permission to in any way indicate that you do such work. The law clearly isn’t designed to protect consumers, since anyone can offer such services regardless of professional training and experience. Instead, the law is designed to protect a small cartel of state-favored businesses against competition.
Government-approved businesses have the privilege of paying the state an initial $300 plus $250 per year in fees to “license” the above terms and buy protection from competitors. We’ve even got a “New Mexico Board of Interior Design” to manage the program–if there was ever a useless bureaucrat jobs program, this is it.
The Institute for Justice has taken up the case of two New Mexico “interior designers” who are suing the state on first amendment grounds. The IJ has a good report on Interior Design licensing here.
In the meantime, the members of the New Mexico Interior Design Cartel can be identified, even avoided if so desired. There are plenty of other talented and experienced “Designers” out there, but good luck finding them in the Yellow Pages.
Hat tip: Coyote Blog

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A RailRunner Experience

I took my first-ever trip on the new Rail Runner commuter train this weekend to and from the New Mexico Wine Festival and thought I’d offer a few thoughts on the train. First and foremost, I got on at the Paseo/Los Ranchos station for the first train of the day. The train was jammed to the gills and it wasn’t just standing room, but sardine-like conditions. The train cars are nice and the air conditioning was cranked up so conditions weren’t too bad. On the way back on the 3:05 train, there were fewer people although it was still standing room only.
Obviously, the price for a ticket is still “0” and most economists will tell you that there is a nearly unlimited demand for anything that is “free.” Curiously enough, this very same dynamic was at work inside the wine festival as well where the lines for a “free” sip of wine were upwards of 10 minutes long. I did notice that, while large numbers of passengers did take the train to the wine festival, equally large numbers (at least on the first train of the day) appeared to be joy-riding. After all, I saw many of the people that had just gotten off the train at Bernalillo, get back on the train right away.
While the train may prove popular even after the “reduced fare” of $2 per trip (as opposed to free) is instituted on October 14, the most important number is the estimated $320 million cost to taxpayers. Even if you don’t believe as I do that the $320 million would be best given back to the taxpayers of New Mexico in the form of tax cuts, it is hard to believe that other legitimate needs would not be better served than a train, the tickets for which, are priced far below market prices.

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Gas Price Guru Says: Price Gouging Doesn’t Exist

A recent story about Trilby Lundberg, the nation’s guru of gasoline prices, is a must-read for politicians and those who think that high gas prices are the result of some kind of conspiracy. Ms. Lunberg publishes a twice-monthly newsletter that analyzes gas prices nationwide. While Ms. Lunberg, as far as I can tell, hasn’t got a political bone in her body, she does have a few opinions about the possibility for oil companies to manipulate prices on a grand scale. Of price gouging she says, “It would be a comedy because it is impossible” and “oil companies have no interest in helping each other and instead want to increase their sales at the expense of the competition.” She goes on to say, “They all have no mercy.”
So, while some on the left criticize oil companies and business in general for being “greedy” and “merciless,” it is these very traits that prevent businesses from colluding. Ask Trilby Lundberg, the “guru of gas prices!”

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Misguided Attack on Charter Schools

One of New Mexico’s few groups of educational innovators came under attack recently when the National Center for Education Statistics released a study that argued, in part, that students in charter shools lagged behind their peers in regular public schools. Unfortunately, as is so often the case when the results of studies fail to make common sense, the analysis used government data that failed to fully account for the socio-economic differences between charter school and public school students.
The charter school concept is a compromise between those who would like to see significant educational reform that goes far beyond the limits presented by the public schoos and those who grudgingly view some forms of school choice as essential tools for improving existing public schools. It is, nonetheless, hard to believe the results of a study that finds students doing worse at schools that are targeted to their needs and interests than similar students who remain in traditional public schools where socialist-style mass production is the name of the game.

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New Mexico, Destination Location or Outmigration?

According to the August 17 article, about 4.1 percent of New Mexicans moved here from another state within the last year. This puts New Mexico at No. 9 in the nation for the percentage of its residents who had moved from another state within the previous year.
Although New Mexico’s increased popularity is a good sign, it is hard to tell whether the state is actually becoming a more attractive place to live or whether greater numbers of native New Mexicans are leaving the state for greener pastures. The Rio Grande Foundation recently studied the issue and found that at least historically-speaking New Mexico has tended to lose population to other states as a result of poor tax policies.

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Wal-Mart as an anti-poverty campaign

While Richardson bashes Wal-Mart for offering “substandard” wages and health care benefits, millions have been lifted out of poverty by Wal-Mart, in China, other developing nations, even in the US. Why would Richardson want to prevent New Mexicans from obtaining this kind of benefit? Would we not see similar effects on standard of living here in New Mexico, with low prices stretching the dollar further and decent wages for those who choose to work at a local branch?

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Richardson’s Eminent Domain Task Force Hears from Rio Grande Foundation and other Eminent Domain Experts

The Rio Grande Foundation and others knowledgeable of the uses and abuses of eminent domain recently presented before Governor Richardson’s eminent domain task force. Aside from presenting a variety of information relating to eminent domain laws in other states and how New Mexico property owners could best be protected, the experts all criticized Rio Rancho’s recent uses of eminent domain.

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Dueling Data on the Impact of Santa Fe’s Minimum Wage

In the last few weeks, dueling economic surveys have been published outlining the economic imact of Santa Fe’s minimum wage law. One study by the New Mexico Department of Labor found that “Santa Fe County added only 300 jobs between June 2005 and June 2006, the lowest rate of job growth in almost four years,” most likely due to Santa Fe’s dramatically-higher minimum wage.
Yet, just a week prior to the release of the Department of Labor study, the UNM Bureau of Business & Economic Research had found that for a different time period than was studied by the Department of Labor, “Santa Fe’s minimum-wage ordinance hasn’t affected overall employment levels in the city.”
So, who do you believe? For a trained economist, the answer is obvious: to the degree that a minimum wage is actually effective in the sense that it will raise wages, people at the lowest ends of the economic ladder will lose jobs, businesses will rely on automation, or labor-intensive businesses will move elsewhere. If the wage rate is low enough that it has no reall economic impact on wages, then the economic impact will be minimal.
It seems obvious that as Santa Fe’s wage rate continues to rise, hitting $10.50 an hour in 2008, the impact on Santa Fe’s economy will become more pronounced and job growth will slow. Rather than jumping on the minimum wage bandwagon with Santa Fe, the rest of the state should wait to see how things play out there.

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