You can usually count on the Journal’s Winthrop Quigley to provide the left-leaning viewpoint when it comes to the New Mexico economy and education system. His recent “Upfront” column on the liberals’ desires to tap (raid) New Mexico’s permanent fund to support a variety of early childhood programs including pre k is no different.

Interestingly, while proponents of massive new taxpayer expenditures on early childhood learning love to claim that their programs are “proven effective,” the real-world reality is far different. For starters, there is the federal Head Start program which the government’s own accountability office found to have “no lasting impact by 1st grade.”

The effectiveness of real-world pre k programs at the state level is questionable at best as the charts below illustrate (Oklahoma and Georgia have two of the longest-running universal pre k programs.

And, as if all that is not enough, the US Chamber of Commerce just today released its “Leaders and Laggards” report. New Mexico’s overall performance was certainly poor, but its “return on investment” was graded “F.” It would seem that policymakers might want to get the current education system to something resembling effectiveness before spending hundreds-of-millions more annually.

If you haven’t already read it, Robert Bryce had an excellent article in today’s Albuquerque Journal on the continued growth in the use of hydrocarbon-based fuels (and how that growth has outpaced so-called “renewables”) even while taxpayer-subsidized wind and solar have grown rapidly in recent years.

The good news for those of you in New Mexico is that Bryce will be speaking on December 9, 2014 at Rio Grande Foundation events in Albuquerque and Farmington. We are three months out from that event and will be providing more details as the date grows closer, but with Bryce’s piece appearing in the local paper, it only makes sense to alert our readers that he’ll be coming to New Mexico soon. See Bryce’s article below:

Solar energy appears to finally be coming of age

In July, Bloomberg New Energy Finance declared that we are in the midst of a “solar revolution” and the firm predicted that solar will be the fastest-growing form of global generation capacity through 2030. A few days after that report was released, Deutsche Bank announced plans to lend $1 billion to support solar deployment in Japan.

About 400,000 U.S. homes now have solar panels on their roofs. One of those homes is the White House. Last year, after a 27-year sabbatical, solar panels were installed on the roof of America’s most famous house.

There’s no question that solar is on a tear. Since 2011, the amount of energy produced by the solar sector has more than doubled. But amidst the solar frenzy, we must remember the critical issue of scale. Indeed, despite solar’s rapid growth, its output is still being dwarfed by the ongoing growth in hydrocarbons.

That fact can easily be proven by comparing the surge in solar-energy production with the remarkable growth in domestic oil output. In July, according to the Energy Information Administration, U.S. oil production averaged about 8.5 million barrels per day. That’s a 16 percent increase over July 2013 figures, when domestic crude output was about 7.3 million barrels per day.

Thus, over the past 12 months or so – thanks largely to horizontal drilling and hydraulic fracturing in shale formations – U.S. oil production has increased by 1.2 million barrels per day. How does that compare with solar?

In 2013, according to the BP Statistical Review of World Energy, the energy output of the global solar sector amounted to about 600,000 barrels of oil equivalent per day. Thus, in one year, merely the increase in U.S. oil production has been roughly equal to twice the contribution from every solar-energy installation on the planet.

The scale issue becomes even more obvious when comparing solar with coal. In 2013, global coal use increased by 3 percent. But in absolute terms, that small percentage increase amounted to 2 million barrels of oil equivalent per day. Thus, in one year, global coal use grew by more than three times the contribution now being made by all global solar. Indeed, solar’s contribution is downright Lilliputian when compared with coal consumption, which now totals about 77 million barrels of oil equivalent per day, or roughly 128 times the amount of energy being produced by solar.

Let me be clear: I’m bullish on solar. I’ve invested in solar. I have 3,200 watts of solar panels on the roof of my house. (Why did I install them? Simple: Austin’s city-owned utility paid two-thirds of the cost.)

Prices for solar systems like mine are falling. In 1980, the average cost of a solar photovoltaic module was over $20 per watt. Today, the cost is well under $1 per watt. If cheaper solar systems can be twinned with cheaper electricity-storage devices, we will see a transformation of electric grids around the world. Furthermore, solar will grow quickly in rural areas and island economies, where even relatively small batteries can make a big difference for electricity-starved populations.

That said, the hard reality is that for all of its rapid growth, solar isn’t even keeping pace with the growth in the global appetite for hydrocarbons. And here’s another truth: while civilians and politicians alike eagerly tout the advances being made in renewable energy, they routinely fail to appreciate how ongoing innovation in the oil and gas sector – in everything from better seismic techniques to digitally controlled drill bits – has resulted in faster and cheaper drilling, which, in turn, has turbocharged the growth in hydrocarbon production.

So by all means, let’s appreciate the growth in solar. And if it makes you happy – and/or you can get a subsidy – put some solar panels on your roof. But don’t count hydrocarbons out yet. They’re going to stick around for many decades to come.

RGF president Paul Gessing recently appeared on the public affairs show of KNAT TV. There are two separate interviews, one on New Mexico’s economic situation and the need for a right to work law, the next on Gov. Martinez’s efforts to re-impose work/education/volunteering requirements for food stamp recipients. Total interview time for the combined interviews is 30 minutes:

Paul Gessing discusses the potential for a Right to Work law in New Mexico and Gov. Martinez’s Medicaid reforms from Paul Gessing on Vimeo.

The video of last night’s “Duel in the Desert” debate between myself and former gubernatorial candidate Alan Webber is now up:

9-8-14 Duel in Desert: Paul Gessing and Alan Webber debate the New Mexico Economy (moderated by Gene Grant) from Paul Gessing on Vimeo.

In case you missed it, we also had “dueling” opinion pieces that are now posted at NM Policy Debate.

While the crowd was definitely, pro-Webber, no matter which side of the debate you fall on, the New Mexico economy is the single most important issue facing our state. I was gratified to see hundreds of people show up to hear a discussion of the issues. It was a great opportunity to present the Rio Grande Foundation’s vision of a more economically-free New Mexico to a new group. Definitely not “preaching to the choir.”

For a sneak preview of some of the issues we’ll be discussing, check out Webbers’ opinion piece and Gessing’s, both of which were recently published in the Las Cruces Sun-News.

Tonight, from 6 to 7:30pm, Gessing and Webber will debate these and other economic issues facing New Mexico. Come out and be part of the action!

I’ve been to the Big Apple, San Francisco, and Chicago. All of them are great places to visit, but they are also really expensive places to live with high regulatory and tax burdens.

But what about more affordable cities that still have things to do, but won’t break the bank…you know, the category that Albuquerque or Las Cruces might fit in one day. Well, the folks at Kiplinger have put together one such list and, not surprisingly, all nine of their selections are in right to work states. Perhaps also not surprisingly, four of the nine are in Texas which has no income tax.

Unions and some on the left like to unfairly paint right to work laws as “right to work for less.” What they prefer to gloss over is the very real fact that the cost of living is generally cheaper in right to work states as well.

The Washington Times recently awarded generous film subsidies the “Golden Hammer” for being “egregious examples of government waste, fraud or abuse.”

New Mexico’s subsidies were specifically-mentioned in the show with a special nod to plans to throw money at the television show “The Bachelor” in hopes of bringing the show to Santa Fe.

Interesting story from KOB-TV on Right to Work:

Obviously, if you go ask a bunch of union people about Right to Work, your responses are going to be rather negative, but according to new polling from Gallup, 65% of Democrats nationwide support the concept.

We’re gaining momentum.

I posted last week that California’s Legislature had achieved temporary sanity by rejecting a statewide ban on plastic grocery bags. Unfortunately, but unsurprisingly, that sanity wore off and it looks like Gov. Jerry Brown will be signing the ban into law soon.

Think this type of ban won’t spread elsewhere? Santa Fe and Silver City already have bans in place. I’ve also talked to at least one elected local official who plans to introduce a local ban. Want more information on plastic bag bans? We’ve got free public events coming soon (on the evening of Monday, September 15 and the morning of Tuesday, September 16, in Las Cruces and Albuquerque.

I recently sat down with Jamai Haquani of the Albuquerque-area public access show Local, National, Global to discuss New Mexico’s struggling economy and what can be done about it. See part 1 of the interview below:

part 2:

part 3:

Following closely on the heels of our recent release of polling data on the potential for a “right to work” law in New Mexico (the poll found 85% support the concept of “right to work”), the Gallup polling organization has done some additional polling on issues surrounding unions and “right to work” laws.

For starters, according to the Gallup article, “82% of Americans agree that ‘no American should be required to join any private organization, like a labor union, against his will.’” That closely tracks our results.

When asked about “right to work” in a slightly different way, support for such laws remains strong at 71 percent approval:

Where things get really interesting is that despite overwhelming support for “right to work” laws, most Americans support unions:

This attitude flies directly in the face of anti- “right to work” union critics who try to conflate such laws with being “anti-union.” That could not be further from the truth and majorities of Americans seem to support unions themselves while also believing that workers should not be coerced into joining them or paying dues to them.

This puts RGF in-sync with most Americans although to be fair, we side with FDR in opposing government labor unions, but respect private sector unionism as long as they can’t coerce membership or payment of dues.

Oh, and one last kicker from Gallup. 65% of Democrats and more independents than Republicans (I guess those independents really support not being coerced to join anyone whether that be unions or political parties) support “right to work.”

I don’t read Joe Monahan’s blog (unless someone directly tells me to) so I just ran across his not-so-thinly-veiled attack today on yours truly and the Rio Grande Foundation. Monahan claims that New Mexico is suffering from “austerity” as advocated by the Rio Grande Foundation (technically, he refuses to mention us and instead calls us a “right wing think tank”).

For starters, New Mexico’s spending has grown in real terms under Gov. Martinez. According to the LFC, Martinez’ first General Fund budget was $5.43 billion and it is now $6.16 billion. That averages out to about 3.58 percent growth on an annual basis. Given low statistically-low inflation rates and New Mexico’s barely-there population growth, New Mexico’s budget has grown every year (on average) under Martinez.

Monahan moves on to attack our advocacy and research on a right to work law for New Mexico, but rather than doing so, he makes the bizarre claim: “Remember, a couple of years ago when the mantra was cutting corporate taxes and economic paradise would result?” No, I don’t remember that. RGF detailed the benefits of previous, not-enacted bill reducing corporate income tax rates, but we were never asked to testify on the bill that passed with its potential tax hikes and expansion of the film program . More importantly, Martinez’ small corporate income tax cuts are not even half-implemented yet.

What Monahan and his ilk refuse to acknowledge is that states that have right to work laws consistently outperform non-right to work states. The most recent data available show 8 of the 10 fastest-growing states have such laws on the books.

Recently, the Santa Fe Reporter ran an article decrying the US Supreme Court’s Hobby Lobby decision from a highly-typical left-wing viewpoint that can be summarized from a line in the article: “Whether it’s restricting access to abortion or restricting access to birth control, women’s autonomy as individual human beings capable of making decisions is apparently not valued by the majority of those sitting on our nation’s highest court.”

While the left loves to pin blame on sexism or some other nefarious plot, the real issue is the absurd US health care laws (laws that long-predated ObamaCare) that strongly incentivize employers to purchase health care for their workers. You can read my letter to the editor which was published in response (and another letter supporting the decision! here).

Faulty Framework
As with so many liberal critiques of the Supreme Court’s Hobby Lobby decision, Hunter Riley fails to address the central issues in the case. Instead, she prefers to play up the “War on Women” meme and rail against the court’s supposedly sexist views.

The central issue in Hobby Lobby is the federal tax preference for employer health care purchases relative to those made by individuals. Absent this provision, which was literally an accident of history dating back to World War II wage and price controls, employers would have literally no say in their workers’ health care decisions.

Unfortunately, the Obamacare health “reforms” failed to address this simple, misguided provision, which created a number of harmful consequences, most notably the dominance of insurance companies in American health care.

The court simply decided that certain businesses had an interest in not purchasing for their employees certain forms of birth control that they believed to cause an abortion. Sixteen of 20 approved forms of birth control remain covered, and there is nothing stopping workers from purchasing these products on their own.

Ultimately, the reproductive rights community should get over their misguided obsession with “free” health care and work with libertarians to end misguided policies that place employers and government bureaucrats in control of our most intimate medical decisions.

Paul J Gessing
President Rio Grande Foundation

The first episode of the New Mexico Freedom Hour on 770 KKOB is now posted. At the outset of the show I outlined a few of the issues likely to be discussed during the show and our goals for the show. I spent most of the rest of the show discussing right to work laws with Jarrett Skorup of the Michigan-based Mackinac Center. Michigan is the latest state to have adopted such a law.

You can listen to the podcast here.

California is known for its frequent experiments with bad economic policies, but it has seemingly avoided enacting the first statewide ban on plastic grocery bags, at least for now.

Such bans are by no means limited to California. In fact, Santa Fe and Silver City, New Mexico have adopted bans. In an effort to educate New Mexico policymakers and average citizens on the potential drawbacks of these restrictive policies, the Rio Grande Foundation is hosting a series of free public forums on the issue of plastic bag bans on September 15 in Albuquerque and on September 16 in Las Cruces.

The past sometimes looks better than it really was. That seems to be the case with some conservatives and the administration of George W. Bush. As I note in response to a column defending the Bush track record by economist Micha Gisser, spending and government grew at rapid rates during the Bush years.

I respect Micha Gisser as an economist, but I think he allows politics to cloud his economic thinking in his recent column on the US and New Mexico economies.

In analyzing the national economy, Gisser, emphasizes the Bush tax cuts, but fails to acknowledge that the Administration’s overall economic track record was disastrous (from a free market perspective). To name just a few harmful policies, Bush (along with a Republican controlled Congress) increased spending and indebtedness to unprecedented levels, created a new health care entitlement, and dramatically expanded the scope and cost of federal regulations. Obama has raised taxes and further expanded government.

New Mexico’s recent economic history is also nuanced. Democrats have consistently controlled the Legislature for decades, but Bill Richardson managed to convince them to reduce income tax rates from 8.2 to 4.9 percent. These were the most significant pro-growth tax cuts enacted in any state in that time frame. Not surprisingly, New Mexico led the region in personal income growth during the decade from 2000 to 2009.

Unfortunately, Richardson also created the costly Rail Runner and Spaceport, both of which continue to burden our economy. Gov. Martinez has worked to reduce the corporate tax and gross receipts tax burdens while not burdening taxpayers with new, costly projects like the Rail Runner and Spaceport.

Both New Mexico and the US economies face serious problems with out-of-control spending, tax burdens on productive behavior, and costly regulations. We should analyze politicians’ records on their merits, absent partisan blinders.

Paul J. Gessing
President
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196
505-264-6090

Texas continues to outpace the nation in jobs and economic growth. New Mexico, on the other hand, lags dramatically behind the region and the nation.

Rather than focusing on New Mexico’s woes, this week on the “New Mexico Freedom Hour” presented by the Rio Grande Foundation which airs next on Saturday, August 30, 2014 from 12pm to 1pm on 770 KKOB AM, we’ll focus on understanding what Texas does so well when it comes to economic development and job growth. Of course, we’ll also plug our guest for ideas on what New Mexico could do to compete with the Lone Star State.

Host Paul Gessing will interview Chuck DeVore, Vice President of Policy with the Texas Public Policy Foundation. DeVore is author of “The Texas Model: Prosperity in the Lone Star State and Lessons for America.”

Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.

I don’t read the New York Times. I focus my time and attention on New Mexico, but occasionally they carry a really interesting article. One such article was entitled “Affordable Housing Draws Middle Class to Inland Cities.”

The idea is that large numbers of Americans are abandoning the costly coasts for more affordable digs in the Midwest, Plains, and, of course, Texas. This is definitely a story worth telling. In the absence of crazy federal housing policies, people are moving to places where they can get a decent-paying job and afford to buy a house. This is not a surprise.

The coasts are expensive in part because they tend to have somewhat limited land mass as compared to the central part of the nation, but, more importantly there are the government regulations (everything from environmental to land use to lack of right to work and many in between) that drive up the cost of living in those predominantly “blue,” coastal regions. Needless to say, this being the Times, the impact of regulations is downplayed (only regulations specifically on home-building are mentioned).

As a trend, this shift away from the coasts SHOULD be beneficial to New Mexico, but unless our policymakers free the private sector up for job growth, we’re going to miss out.

Free Public Forum

The Environmental and Economic Impact of Plastic Bags Bans

Featuring Julian Morris of the Reason Foundation

In the past two years, two of New Mexico’s largest cities, Santa Fe and Silver City, have passed bans on plastic shopping bags. They join hundreds of others nationwide that have adopted similar measures.

It is likely only a matter of time before governing bodies throughout New Mexico, particularly within the Rio Grande Corridor, consider such policies.

To help ensure that decisions on this matter are made on the basis of the best available evidence, we have invited one of the foremost experts to discuss the issues involved at free public events in Albuquerque and Las Cruces.

Albuquerque event details are as follows:

• When:  Monday, September 15, 6:00pm to 7:30pm
• Where:  Room 2401 at UNM Law School which is located at: 1117 Stanford Dr NE, Albuquerque, NM 87106

Las Cruces event details are as follows:

• When:  Tuesday, September 16, 7:30am to 8:30am
• Where:  Sunset Grill at Sonoma Ranch Golf Course which is located at: 1274 Golf Club Rd, Las Cruces, NM 88011
• Continental breakfast will be provided.

Please let us know you’re coming by E-mailing us at rsvp@riograndefoundation.org and identify which event (Albuquerque or Las Cruces) you’ll be attending.

About the Speaker

Julian Morris is Vice President of Research at Reason Foundation and author of the new report: “How Green Is that Grocery Bag Ban? An Assessment of the Environmental and Economic Effects of Grocery Bag Bans and Taxes“.

He wrote a column on the issue that recently appeared in Time.

Beverlee McClure was interviewed recently by Dan Mayfield of Albuquerque Business First. The article is worth a read as it gives a realistic perspective of how a right to work bill might fare during the upcoming legislative session.

As an added bonus, check out some of the back-and-forth between myself and former Lt. Gov. Diane Denish in the comments section (and feel free to weigh in yourself). I take issue with her unsupported assertion that of the top 7 states in economic growth, four do not have right to work laws. As this article from June of this year shows, 8 of the top 10 states in economic growth are right to work (North Dakota, Wyoming, Oklahoma, Idaho, Utah, Texas, South Dakota, and Nebraska are while West Virginia and Colorado are not). There may be something contradicting that if you search hard enough and define “economic growth” in some unusual way, but right to work states pretty consistently outperform non-right to work states (as seen below), so Denish resorts to the classic tactic of third-graders and those without sound arguments (name-calling) instead.

I recently sat down with Wally Drangmeister of the New Mexico Oil and Gas Association to discuss New Mexico’s economy and how it depends on the oil and gas industry as well as potential ways to use the industry as a bridge to a more prosperous economy. The show originally aired on the Energy New Mexico Hour which airs on Sunday mornings from 10 to 11am.

Take a listen here.

Check out the chart below (pdf here):

It illustrates changes in private sector GDP growth over three different time periods (the last 17, 4, and 2 years). As seen in the chart, New Mexico’s private sector growth has been consistently weak over the various time periods hovering from 45th to 35th place among US states.

Certainly, there are various ways to interpret this. One is that while New Mexico’s overall economy remains stuck in the rudder in recent years, the private sector is performing reasonably-well given recent history. The current economic malaise in New Mexico seems to be as a result of changes in federal spending.

Also, it is worth noting that by and large, New Mexico’s neighbors outperform the Land of Enchantment over each of the time frames discussed. This is not a surprise given New Mexico’s poor rankings on all manner of economic freedom indices.

For example, none of New Mexico’s adjacent neighbors under-perform New Mexico in any given time period although nearby Nevada and Arizona perform somewhat poorly when the after-effects of the housing crisis are included (as in the last four years).

HT: Matt Mayer

The liberals on Albuquerque’s City Council may flex their muscles at tonight’s Albuquerque City Council meeting.

Two bills (P-14-5 and O-14-14) would increase the gross receipts tax by 1/8 of one percent to fund “essential services.”

The intent is to fund (a) mental health services and (b) capital improvements. No specifics are offered.

As I wrote several months ago when the mental health tax hike was first proposed, New Mexico’s per person spending on mental health is middle-of-the-pack among states. There is very little evidence as to the need for this tax hike or that enacting it will result in improved services.

Regarding the capital spending proposal, Albuquerque has robbed the Capital fund to spend more on operations and pay. The way to correct that problem is to balance the books. Use Capital money only for capital improvements. Taxpayers should NOT pay now for “something” and find out what the real needs are without leaping to the “increase tax” solution. Furthermore, Albuquerque should reconsider management of its golf courses and the zoo (to name just two things) which could result in cost savings.