New Mexico has been lagging its regional neighbors for many years. Throughout its 100 years of statehood, New Mexico has missed out on a great deal of private-sector economic development that has instead flowed to more economically-free states such as Colorado, Texas, and Arizona. New Mexico has instead relied on a steady and ever-growing flow of tax dollars from Washington for economic growth.1
Unfortunately, this reliance on Washington has not made New Mexicans prosperous or their state wealthy. Rather, New Mexico has the highest poverty rate in the nation according to the Census Bureau.2
And, while economic trends are best understood over the long-term, New Mexico has again been lagging behind its regional counterparts as the growth of federal spending has stalled. The following chart from the Albuquerque Journal shows that New Mexico is the only state in the West that lost jobs between August 2011 and August 2012.3
It is often said that the definition of insanity is doing the same thing over and over again and expecting a different result. One area where this is true is in the area of government regulations. New Mexico suffers from overregulation of its economy. These regulations increase economic costs to businesses and consumers alike and enrich well-connected special interests. The Rio Grande Foundation has compiled a list of regulations that should be eliminated or at least modified in ways that liberalize markets. Most of these regulations are economic in nature, but some of these regulations are simply silly and place unnecessary burdens on those looking to run for the Legislature (as one example). It is often said that the definition of insanity is doing the same thing over and over again and expecting a different result. One area where this is true is in the area of government regulations. New Mexico suffers from overregulation of its economy. These regulations increase economic costs to businesses and consumers alike and enrich well-connected special interests. The Rio Grande Foundation has compiled a list of regulations that should be eliminated or at least modified in ways that liberalize markets. Most of these regulations are economic in nature, but some of these regulations are simply silly and place unnecessary burdens on those looking to run for the Legislature (as one example).
Notably, deregulation is not a partisan issue; at least it has not been during recent U.S. history. President Carter and Congress deregulated the airline, freight rail, and trucking industries, as well as the micro-brew industry that has spawned an entire new craft beer market in the last decade.4
Every day for the next several weeks, the Rio Grande Foundation will be E-mailing its "Burdensome Regulation of the Day." Our hope is that as we approach the 2013 legislative session, policymakers in Santa Fe and around the state – many of our proposals are not targeted at the Legislature – will consider addressing these issues in ways that make New Mexico more attractive to businesses and entrepreneurs while encouraging the spirit of free and open competition that has been so integral to the fabric of American life and economic growth.
Unlike so many other economic development schemes, these regulators issues can be addressed without any cost to taxpayers. If there are "costs" associated with demolishing these regulations, they come from removing privileges given by government to special interests. Those benefits will, in turn, accumulate to the population at large instead.
1The Economist, "Greek Americans?" July 30, 2011, http://www.economist.com/node/21524887
2The Huffington Post, "How New Mexico, Poorest State in America, Fights Poverty," September 13, 2012, http://www.huffingtonpost.com/2012/09/13/new-mexico-poverty-rates_n_1881321.html
3Employment Highlights, Albuquerque Journal, Business Journal, October 22, 2012
4William L. Anderson, "Rethinking Carter," Mises Daily, October 25, 2000, http://mises.org/daily/535
2 Replies to “The Dire Need for Regulatory Reform in New Mexico”
government flatters itself when it pretends to be an economic “driver”.
government, at any level, has no revenue from a product sold in a competitive market, where price, service and quality and ALTERNATIVES are freely available, where people can vote with their money and feet, if they don’t like the deal offered.
Government deals in monopolies.
The only other source of revenue is taxation, call it fees or whatever.
Taxation and fees are exacted via police or permission powers of government, enforced ultimately by people with guns. Don’t do what you are told, government will send people to shut down your business, take your house, you name it.
This is not all bad, but the idea that taxation is optional, you have never dealt with IRS (or NM state tax savants) when you disagree with them. Or EPA. Don’t think about changing the terrain in an arroyo which the Army CoE thinks it owns because it floods twice a year.
So, it is very important to have wise government, which means government as the last resort to “keep them honest”, “them” always being someone (a corporation or person, even for those who dispute Citizens United) else.
The best solution to being exploited in any way is to have freedom of choice and options to choose from. Individuals can pick their paths, live with the results. Some pick well, some not.
Government as nanny is the antithesis of individual choice. Forget about responsibility, government narrows choices, standardizes solutions, and too bad if you get out of line. it’s every inconvenient for the minders, who are not in the job to care for you but to get paid as much as possible, save for the odd zealot who sees public service as a duty.
But that is another story.
This is nothing new. New Mexico has ALWAYS lagged behind its surrounding states in economic recoveries. The Panic of 1873 and 1894, the Republican Great Depression of 1929, the downturns of the 1950’s, 1970’s, 1980’s, 1990’s and 2007. To say we are only down 1.5% is actually a good omen; maybe it IS THE REGULATIONS THAT ARE PROTECTING US. We are usually way, way down. Our economy lags behind as much as two years behind the national economy.
To say something different is to be economically naive.