Forget Red State vs. Blue State

As usual, NM does things differently. Based on a survey of 120,464 people, here is a map showing what words people use when referring to soft-drinks. Casual observation seems to show the Land of the Enchantment is also the land of diversity. In fact, we seem to be the least-homogeneous of all the states. No sheep here!
Thanks to Tyler Cowen for the pointer.

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I might be a convert

Like the Founding Fathers, I have never been extremely enamored of democracy. Usually, when I tell people this, they jump to the assumption that I must prefer autocracy or one of its variants. But you see it’s not the “demos” (people) part of democracy to which I object. Rather, it is the “kratia” (rule) part.
I think the happiest places on earth are those where individual rights reign supreme, and no one–not king, council or even a popular majority–is permitted to invade certain inalienable rights of the individual. To ensure these rights, strong (explicit or implicit) constraints on those in possession of political power are necessary.
In the US, an important aspect of that constraint is, of course, the Constitution. Expressing a common belief of the founders, the chief architect of that document, James Madison, noted that, “…democracies have ever been incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.” He went on to argue, “A republic, by which I mean a government in which the scheme of representation takes place, opens a different prospect and promises the cure for which we are seeking.” (See Federalist 10)
In other words, representative government is one way to keep the majority from running roughshod over the minority. That is why Madison and company gave us, in Franklin’s words, “A republic, if you can keep it.”
In many ways we haven’t. Over the last 100 years, the United States has seen an explosion in direct democracy. In 1897, South Dakota became the first state to adopt the popular initiative and referendum. The former allowed citizens to introduce their own legislation and the latter allowed them to vote on issues originating in the legislature. Over the next 20 years, half of the other states in the union adopted similar measures.
As a (small ‘r’!) republican, I have tended to regard this change as unfortunate. By empowering the majority to make whichever laws it sees fit, I worry that the states have slowly eroded the rights and freedoms individuals.
Despite, these misgivings, I must admit that the empirical evidence appears to be against me. The economist, John Matsusaka, of the University of Southern California, for example has found that while initiatives do “not have a consistent effect on the overall size of state and local government” they do “systematically lead to more decentralized government,” which is generally considered by public choice economists to be more efficient than centralized government. Matsusaka has a forthcoming article in the Journal of Economic Perspectives which declares “Direct Democracy Works.” He has also begun an Institute dedicated to promoting direct democracy.
Other scholars have found similar results. The European economists Bruno Frey and Alois Stutzer studied direct democracy in Switzerland where citizens in some cantons have greater access to instruments of direct democracy than citizens in other cantons. They found that it “systematically and sizably raise[d] self-reported individual well-being.” As an aside, they also found that local autonomy appears to increase happiness.
As an unabashed fan of limited government, I also can’t help but be impressed with initiatives like California’s Prop 13 or Colorado’s Taxpayer Bill or Rights. Perhaps New Mexican’s should consider direct democracy as well?

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New Mexico Personal Income — good news and bad news

The BEA has just released per capita personal income statistics for 2004. The bad news: New Mexico still ranks 47th among all states and the District of Columbia. The good news is that we are growing faster than in the past. Our growth of per capita personal income over 10 years ranks 32nd (no longer at or near last).
Why the improvement? Some of it is just plain luck. Our energy sector is enjoying high prices. We have a large government component that is resistant to the national downturn over the past four years.
Former Governor Gary Johnson probably deserves some credit. He mananged to hold the line on taxing and spending for 8 of the 10 years while most other states were not so fortunate. They are coming down to meet us. Unfortunately, that will probably not last because of our current spending binge.

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It’s the Spending, Stupid!

We now have suffered from 3 sessions of out of control spending. Here is a quick “back of the envelope” calculation of Big Bill’s spending problem. Adjusted for population growth and inflation, at the current rate of increase real spending will have increased by almost $400 million (in 2005 dollars) by the end of his first term. Contrast that with the increase during two terms for Governor Johnson: $360 million (in 2005 dollars). Our governor has managed to squander the opportunity to provide the needed tax relief that will lead NM to prosperity.

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Some Perspective on Gasoline Prices

Check out this great post by Michael Munger at Division of Labour. He describes how gas prices have behaved over time in real (inflation adjusted) terms.
Another way to look gasoline prices is to ask: how much gasoline will an hour of my labor purchase? In 1981 the average New Mexican could obtain 5.2 gallons of gasoline for one hour of labor. This year she could obtain 7.4 gallons of gasoline for one hour of labor, 42% more than in 1981(nominal price data from DOE, nominal wage data from BEA).
We never like it when the price of gasoline, or anything else, rises. The average New Mexican would be much happier being able to purchase 10 gallons of gasoline for one hour of labor, as was the case less than one year ago. But let’s put the price of gasoline in perspective; this is not the end of civilization as we know it.
BTW, government itself is responsible for keeping gasoline prices higher than necessary.

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Choice Victory in Arizona

According to Chuck Muth:
In Arizona, folks who donate money to a scholarship program allowing kids to attend schools other than the government mis-run re-education camps are allowed a tax credit for such donations. The ACLU, naturally, sued to kill off this school choice program, maintaining that it was a violation of the religion provision in the First Amendment.
Yesterday, Federal District Court Judge Earl Carroll tossed out the ACLU lawsuit. The program was defended in court by the libertarian Institute for Justice.

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In defense of Bourbon Street

My colleague at George Mason, Bill Butterfield, (an excellent blogger, incidentally) recently wrote about a conversation we had while strolling down Bourbon Street in the Big Easy.
Bill writes:
“My problem with libertarians is that they overly discount meddlesome preferences. They claim they have none, which is the source of their sense of moral superiority. But meddlesome preferences are preferences just the same, everyone has them and they must be included in any attempt to maximize utility from a policy perspective.”
I would not claim that libertarians are without meddlesome preferences. I, for instance, would love to meddle in a lot of the decisions of others (for example, Fox should not be allowed to cancel “Arrested Development”!).
That said, the libertarian perspective is that we should honor individual rights (more precisely, “negative rights”). To do so, the rest of us are obliged to refrain from certain activities—including meddling.
A few examples: You have a right to life. I, therefore, am obliged not to kill you. You also possess a right to property, so I shouldn’t be allowed to take your iPod.
Though I may have a “meddlesome preference” for invading your rights and taking your property, I have a stronger preference for having my own rights respected and keeping my own property. Being a member of a liberal (libertarian) society, means that I agree to forfeit my right to act on my meddlesome preferences in exchange for living in a society in which no one else is permitted to act on their meddlesome preferences. For most of us, I think the trade-off is well worth it (the rest, of course, are free to join restrictive religious groups or even secular communes).
The economist in me would point out that well-defined, exchangeable rights in property provide entrepreneurs an incentive to take account of the preferences of others. Most people–even libertarians–want to live in neighborhoods without strip clubs. The home developer who appreciates this will make a profit. The developer who sells a unit to Larry Flint’s Strip Club in the middle of a residential neighborhood will not become a wealthy man.
I would much prefer to live in a system based on personal rights which restrain the meddlesome preferences of my fellows than in a system ruled by the meddlesome whims of the median voter.

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Why not lease a BMW X-5 SUV for each Belen–Albuquerque commuter?

From P.J. O’ROURKE: “There are just two problems with mass transit. Nobody uses it, and it costs like hell.”
There is the huge up-front cost. Also, and “less obviously, there’s all the money spent locally keeping local mass transit systems operating.” For example, the Hiawatha Line in Minneapolis is estimated to cost $19 for each ride. At that rate “commuting to work will cost $8,550 a year. If the commuter is earning minimum wage, this leaves about $1,000 a year for food, shelter and clothing. Or, if the city picks up the tab, it could have leased a BMW X-5 SUV for the commuter at about the same price.”
Since the state taxpayers would be picking up the tab for Belen-Albuquerque train riders, let’s do something really cool and lease them BMW’s instead.

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