I’ll be on Bob Clark’s show on 770 KKOB on Friday morning from 9am to 10am to discuss the Rail Runner and our recent paper which outlines reasons to shut the train down.

There are surely going to be at least a few critics and one of their critiques will likely be the old saw that “no transit system makes money,” so why should we worry that fare box revenues cover only 13% of the system’s costs. Well, I found this interesting data online which shows the various revenue/expense ratios associated with various transit systems nationwide and worldwide. Surprisingly enough, some systems overseas do better than break even and no system is as costly as the Rail Runner.

Call in and share your thoughts about the Richardson Railroad!

It is amazing how consistent the Obama Administration has been in opposing free markets and increasing the size and scope of government. The latest move in this direction is its effort to stop the proposed merger of T-Mobile and AT&T.

Businesses are constantly searching for ways to provide their customers with more and better services (generally at a lower cost) in a competitive economy. And cell phone service providers are a competitive area of the economy as this list of the dozens of cell phone service providers nationwide illustrates.

I’m not even sure what the politics of this decision might be. The Communications Workers of America (supporters of Obama) supports the merger and argues it will create 5,000 jobs. We’ll have to see how this plays out, but there is no doubt that Obama is not changing his stripes (as did Clinton) to achieve electoral victory in 2012.

Given the recent fire season, I think it is totally appropriate to allow localities to ban fireworks within their borders. Legislation along these lines is going to be considered in the upcoming special legislative session.

Of course, we also know that our schools are failing, so it is hard to find fault with the Gov’s recent decision to place a ban on 3rd grade social promotion on the “call” for the upcoming session. This wouldn’t have been necessary if Majority Leader Michael Sanchez had allowed the bill to go to the floor during the 2011 regular session, but that is another story.

The success of our kids in the classroom is at least as important as a fireworks ban, right?

Advocates of the Rail Runner and other government-run rail systems like Amtrak love to argue that taxpayers should pay for their preferred mode of transportation because transit doesn’t make money and because it wouldn’t exist without subsidies. Well, in the case of the Santa Fe Rail depot, the Rail Runner’s bullying tactics could cost 25 people who work for a functioning, private-sector railroad, their jobs.

Sure, the Santa Fe Southern is using (maybe owns) the tracks and station and was there first, but who is a mere private company to stand in the way of the mighty State? I sincerely hope that Gov. Martinez acts to rein in the culprits before another business goes under due to government overreach.

Make this the 11th reason to shut down the Rail Runner.

If the answer is to increase inflation, you’re probably asking the wrong question. That is my opinion and it is also the opinion of syndicated economist Robert Samuelson. One of the curious points here, however, is that I believe that we are already having inflation because inflation simply means an increase in the money supply.

Samuelson implies in his article that he means the actual increase of prices that usually results from inflation. Of course, with our current weak economy, the prices of many goods is not increasing, thus leading some to believe that inflation is not happening.

The “fact” that prices are not increasing according to the government data has led some to argue that inflation would be a good thing. True, rising prices would be a sign that the economy is growing, but it would be a result of growth. Inflating the money supply has certainly not led to economic growth.

In other words, while I quibble with Samuelson about definitions, he is basically correct. Inflation is not going to help the economy.

I’ve been out of the action this week at the annual State Policy Network meeting. Think tank leaders from all 50 states are here and we’re talking policy ideas and exchanging successes and failures. Lots of people from DC are still reeling from the earthquake and now see a hurricane bearing down on their homes.

Thankfully, we in New Mexico are relatively free from natural disasters. And, despite Paul Krugaman’s view that what America needs is an alien attack, the fact is that the Broken Window fallacy still holds. Natural disasters (or unnatural ones for that matter) are bad. Read more on the topic and the recent dust-up on the issue over at Reason.

Despite the Tea Party’s influence on policy and the S&P Downgrade, it seems that nothing has changed in terms of spending. For starters, there is this ridiculous story about the federal government’s $40 million poultry bailout. Apparently, chicken prices are simply too low, so Washington had to step in. I know $40 million isn’t a lot of money in a $3.8 trillion budget, but if we can’t cut that, what can we cut???

Then there is the debate over cost savings at the Post Office and whether to run Las Cruces mail through El Paso The Las Cruces Sun-News says “no.” I don’t get it. The Post Office ran an $8.5 billion deficit this year. Clearly, things have to change rapidly lest taxpayers be left holding the bag. In this day of email and instant communication, is having your own postmark as a city really that big a deal?

Lastly (in this list of examples, but not by any means in terms of wasteful spending), there is the essential air service debate. I lauded GOP Members of Congress for standing firm, only to watch them cave. Not surprisingly, Transportation Sec. Ray LaHood promptly promised to waive any service cuts under the program. Kinda like Lucy and Charlie Brown playing football…

Again, if the federal government keeps bailing out the poultry industry, forcing the Post Office to waste money, and subsidizing wasteful flights, what chance is there to address entitlements and the really big issues?

Mike Jaxson with KSVP Radio in Artesia and I recently discussed our new report on the Rail Runner, the upcoming special session of the New Mexico Legislature, and what New Mexico might learn from Texas’ economy. Listen to the 15 minute interview here.

I’ve written numerous times on this blog about the “Texas Economic Miracle” and what it means for New Mexico. With Rick Perry’s entrance into the presidential race, the national spotlight is now being shined on the Texas economy in a big way. Liberals like Paul Krugman want nothing more than to cast doubt on the low taxes and limited regulations in Texas and their role in spurring the Texas economy.

As Shikha Dalmia of Reason writes, Texas has indeed done a lot right and there are good reasons for people to flock there. In summary writes Dalmia, “Texas offers proof that people prefer jobs, even low-paying ones, to lavish social benefits — repudiating the liberal tax-and-spend economic model.” After all, unskilled Mexicans who choose to live in Texas (and make up a great deal of the state’s population growth) are not likely to be paid more than minimum wage, but they still prefer Texas to high-tax welfare states like California.

Of course, as Dalmia points out and conservative columnist Tim Carney expands upon, just because Texas is a business friendly place, that doesn’t mean that Rick Perry is hitting all the right notes in terms of economic policies.

So, New Mexico should follow Texas by eliminating its income tax and adopting Right to Work legislation, but that doesn’t mean Gov. Martinez should follow everything that Rick Perry has done in Texas.

As previously reported, the Rio Grande Foundation has been collecting publicly-available government employee salary information from all over the state. This caught the attention of the folks over at the Clovis News-Journal which ran this story about our efforts and transparency issues in Curry County.

Education analyst Franklin Schargel asks this question in a recent opinion piece that appeared in the Albuquerque Journal. The question is a good one and I agree with much of the article. As an editorial from the Defensor-Chieftain rightly states, the Legislature in particular needs to allow Education Sec. Skandera and the Gov. implement their agenda rather than continuously fighting them.

There are real problems with New Mexico’s (not to mention the nation’s) educational system. These are systemic and built up over generations. Are legislative Democrats going to try “stall-ball” as they did under Gary Johnson or are they actually going to try something new?

The New Mexico Watchdog asks this question in his new story which is available here. Here is the link to AFSCME’s information available on the Taos County website.

While AFSCME is a government employee labor union by definition, it seems odd that the County would want to advertise for AFSCME. Considering that AFSCME is a very political organization that essentially acts as a powerful arm of the Democratic Party, it would seem to be highly inappropriate and something that should be eliminated right away.

If you haven’t got the time to read the full-length policy paper which was released this week, I have a shorter article that ran on NMPolitics.net.

Even if we don’t shut the train down, it is time to make sure that the process that creates future projects like the train are transparent and don’t use scams like “balloon payments” which hold off a majority of the bill until 2025 and 2027.

A few weeks ago, RGF president Paul Gessing had the opportunity to speak at the Albuquerque forum on economic development put on by Jon Barela’s Economic Development Department. It was a great opportunity to discuss the Foundation’s findings on turning around New Mexico’s economy with members of the business community. Read full coverage from the Albuquerque Journal here.

There is no doubt that our ideas will move New Mexico in the right direction economically-speaking, but the business community is much more focused on small changes, some of which are more “business-friendly” than “free market.” Some of the ideas are great and we fully support them; some are open to debate.

Nonetheless, we do appreciate Secretary Barela’s willingness to give us an opportunity to share our principled, big-picture ideas.

In case you missed it, Channel 13 had an excellent report last night on the Rail Runner. It echoed many of the points in our new policy paper which calls on Gov. Martinez and the Legislature to shut the boondoggle down.

Rail Runner: Go big or go lean?: krqe.com

However, while I appreciate Larry Abraham’s having blown the whistle on the real financial situation taxpayers face as a result of the train, I think his suggestions to expand the system are absurd. Perhaps a casino car or a shift to emphasis on tourism could make a dent in the train’s financial situation, but I don’t see a government agency having the incentives or capability to be truly innovative.

A new documentary film is coming out that focuses on oil and its role in our economy and political debate. The film happens to have been created by Mark Mathis, a local filmmakers. The film is showing at the downtown library at 501 Copper NW Thursday morning at 10:00. Find more out about the film festival’s schedule here.

Check out the preview here:

(Albuquerque) The Rio Grande Foundation has long been critical of the Rail Runner and its finances. A new report from the Foundation outlines the top “Ten Reasons to Shut the Rail Runner Down Now.” The report is available here.

Originally marketed at a price of $122 million and as possibly being “high-speed,” the Rail Runner shuttles (mostly) tourists and government employees from downtown Albuquerque to Santa Fe and from Albuquerque south to the bedroom community of Belen.

Regardless of whether you think the Rail Runner is worth the money or not, there is no doubt that the process that created the train is rotten to the core. For starters, the train has been operational for five years, but only recently have the system’s true finances been explained in any detail.

Most egregious among the revelations is the fact that rather than paying the train off in equal annual payments over 30 years as a family would do with a mortgage, Gov. Richardson managed to set up the train’s financing so that he got the credit, but future governors and legislators would have to pay the bills. New Mexico taxpayers are on the hook for two lump sum payments of $230 million per year in 2025 and 2027.

According to newspaper reports, the train will cost a total of $1.3 billion over the next 20 years. This does not include the replacement cost of the train sets and track which transportation expert Randal O’Toole estimates must be done at approximately their original cost every 30 years.

If the train is shut down, taxpayers will save at least $18.12 million in annual taxpayer-financed operating costs beginning with the system’s shutdown. This would add up to $453 million over the next 25 years if the train is shut down right away. The train’s total per-passenger subsidies come to $50 per-passenger, enough to purchase a car (costing more than $18,000) for each passenger annually.

Said Rio Grande Foundation president Paul Gessing, “As painful as it might be in terms of prestige, the Rail Runner is not an integral part of New Mexico’s transportation system and is simply an unaffordable luxury. It is time to shut it down.”

Read the full report and all 10 reasons to shut the train down here.

This interesting article discusses what is currently happening in the US protectorate of Puerto Rico. The conservative, Republican governor of the island has cut taxes and reduced the size of the government work force. So far, the result is a dramatic reduction in unemployment rates, a 70% drop in the deficit, and credit rating upgrades that have allowed for increased bond sales and a reduction in interest payments.

Sounds like a model for New Mexico and the federal government as a whole. At the very least, policymakers and the media need to watch what is happening there very closely.

Too many politicians (of both parties) would prefer to forget about the past. A lot of Republicans would prefer to forget about the Bush years and the fact that federal spending grew out of control during the eight years of his term. Democrats and President Obama, on the other hand, would prefer to forget that the $787 billion stimulus was an abject failure. This was the largest “jobs” project since at least the New Deal.

Rep. Martin Heinrich, in his opinion piece today, tries to take Congressional Republicans to task for “not bringing a single jobs bill to the floor.” This is just silly. The federal government, especially when it is as heavily-indepted as ours is, needs to focus on the basics, not throwing more corporate welfare at preferred businesses.

If Heinrich wants a jobs bill, how about repealing ObamaCare? How about getting rid of some of the piles of regulations that make doing business so difficult in the United States? How about stopping the out-of-control EPA and NLRB?

Heinrich, like most politicians, simply doesn’t understand how jobs (and more importantly, prosperity) are created. Hint, government can create the conditions, but it is entrepreneurs and average people working hard that create wealth. The federal government is destroying wealth and has been for many years.

Recently, I discussed the (unwarranted) optimism I had about Congressional Republicans’ efforts to eliminate the so-called “Essential Air Service” (EAS) program. Rob Nikolewski over at Capitol Report did some further analysis of flights into and out of Alamogordo, NM, a city that “benefits” from the EAS program.

Among his findings:

Only 374 people hopped aboard flights in Alamagordo in 2010. That’s an average of just 1.2 passengers per service day;

The US government sends some $1.6 millon in subsidies to airlines providing service to Alamogordo, so that works out to $3,126.57 per ticket (not counting the out of pocket price of between $70 to $90 each passenger pays for a one-way flight).

Almost makes the Rail Runner look like a good deal! If Congress can’t eliminate this narrowly-targeted and relatively small (within the scope of the federal budget) subsidy, how are they going to deal with Medicare, Medicaid, and Social Security?

They say that the first step in solving a problem is recognizing that you have one. So, in a sense it is positive that AFSCME, the labor union representing large numbers of government workers in New Mexico, has come up with a list of reforms that it is okay with.

Ideas including raising the retirement age, re-working the cost of living adjustment (COLA), and basing final average salary calculations off of a longer period of time.

The full scope of the plans is outlined at the link above and AFSCME is wise to recognize that the current pension system is unaffordable. Of course, as our own Scott Moody has pointed out, New Mexico’s pension problem is much larger than either side is admitting at this point (more like $22.9 billion as opposed to $4.6 billion).

Interestingly enough, at the very same legislative meeting that AFSCME introduced their proposal, a separate proposal from GASB, the folks that attempt to keep government’s books honest (good luck!), was introduced. In discussing the proposal with Moody, he told me “If these changes happen, it will explode the pension liability. The proposal would also move the pension liability directly onto state’s balance sheets. I would imagine that would mean many states would have negative
equity.”

Looks like AFSCME is doing too little, too late, but something is better than nothing, I suppose.

With all of the talk about the broader economy, the ongoing issues with ObamaCare have been out of sight for a few weeks. Dr. Deane Waldman who sits on the board of the Rio Grande Foundation and is an expert in health care policy (and a pediatric cardiologist), takes on some of the more disconcerting aspects of ObamaCare in an opinion piece published in the Albuquerque Journal.

The Rio Grande Foundation believes strongly in government transparency. To that end, we are submitting information requests to, and collecting payroll information, for all major cities — and eventually all counties — throughout New Mexico.

The list of cities is below. Albuquerque already has a transparency site with payroll information available, so a link to that is provided. Links will be activated as information is received.

Albuquerque
Las Cruces
Hobbs
Rio Rancho
Farmington
Clovis
Los Lunas
Alamogordo
Sunland Park
Las Vegas
Santa Fe
Carlsbad
Portales
Roswell
Gallup
Los Alamos (Los Alamos is both a City and County, so it will be posted in both)
Deming
Artesia
Tucumcari

The results from the recall election in Wisconsin are in and, Gov. Scott Walker and the Republicans who courageously pressed a reform agenda (at great savings to taxpayers) have won the day. Read the full story here.

This is good news for reformers here in New Mexico and across the country. After all, reform is sure to be controversial and will trigger a backlash. The truth is that voters by and large stuck with the reformers.