I enjoyed the article in this morning’s Albuquerque Journal on the students at the Southwest Learning Center who are learning to fly through their charter high school. First and foremost, good luck getting this kind of innovative learning opportunity through a traditional charters school. But that isn’t why I liked the article so much.

Buried in the article was a nugget that explained so much of what is wrong with American education (and what is right about this particular charter school). The relevant information is:

Students pay an additional $50 per hour for flight time, which covers most of the cost of instructors.

Greg Roark, director of the schools’ aviation program, said the steep cost to families encourages students to take the program seriously and to work hard.

“There’s value in them paying, because there’s a lesson to be learned that this costs money,” Roark said.

What a novel idea! Students and their families take education more seriously if they have some skin in the game. Having an obvious, direct financial interest in one’s own education would solve many of the major problems we face. Tax credits and other “choice” mechanisms moves the debate in this direction, but our state constitution makes a major shift in this direction difficult.

Most of the focus on the recent federal tax deal centers around the need to extend the Bush tax cuts. This posting focuses on the unemployment extension for 13 months starting January 1, 2011. It would seem that Obama is trying to keep the nation’s unemployment rate elevated well into his re-election campaign. This is one instance of bad economics and bad politics being one and the same.

After all, in spite of the financial crash, in spite of Obama’s (and Bush’s) over-spending, and in spite of our nation’s horrible financial condition, the economy is bound to start growing and thus creating jobs over the next year. Obama’s unemployment extension (some will now have gone more than 3 years without working and yet receiving unemployment under this compromise) would seem to be a great way to keep the unemployment rate well over 9.0% (it is now at 9.8%) well into his bid for re-election in 2014. Is this really what he wants?

Rather than a blanket extension of unemployment, Obama (and Congress) could have added requirements that workers pay back some portion of their “unemployment insurance” once they find work, but no such requirement seemed to receive serious consideration.

There has been so much going on that I have seen several interesting and important articles that I simply haven’t had the time or space to discuss in this space. One of those excellent articles comes from Greg Jorgensen a Rio Rancho-based dentist. Jorgensen poo-poos the notion that New Mexico needs to spend $30 million to start and $6 million annually to subsidize a dental school.

Jorgensen makes several salient points, but the basic idea is that the market should be allowed to work. Rather than simply supplying more dentists through a heavily-subsidized dental school, if there is a demand for dentists, prices will rise and more dentists will come to New Mexico to ply their trade. This makes complete sense to me. In fact, the same concept needs to be applied to our higher-education system as a whole. Despite a $400 million deficit, taxpayers continue to funnel money into higher ed with little or no discussion of what exactly the public at large is receiving for that massive investment.

Kudos to everyone from Diane Denish to Sen. Sander Rue, New Mexico’s Department of Information Technology, and the Albuquerque-based RealTimeSites which actually created the site. New Mexico’s Sunshine Portal is now live (6 months ahead of schedule). When’s the last time you heard that about New Mexico government?

Anyway, there is a trove of interesting information. Just one nugget I found is that five staffers in the Office of the Governor make more money on an annual basis than does the Governor: Brian Condit (Cos), Janis Hartley (Deputy Cos), Eric Witt (Deputy CoS), Gilbert Gallegos (Deputy CoS), and Daniela Glick (Special Director).

As far as I’ve seen, The Sunshine Portal is one of the best in the nation. I hope it generates a lot of heat on the political class by shedding some light on state budgets. That said, it needs to be expanded. Let’s start with adding the public schools to the portal!

Recently, RGF and our work has been the target of a few opinion writers on the pages of the Las Cruces Sun-News. The articles by Michael Hayes and Gerry Bradley are here and here respectively.

I responded in an effort to clear up some of the misperceptions of what the Rio Grande Foundation does and what policies we are advocating with an article in the Sun-News here.

The Rio Grande Foundation has joined a national group of conservative leaders including Newt Gingrich, Ed Meese, and Grover Norquist to work together to solve crime and criminal justice issues in the United States. A mission statement from the group can be found here.

The site which can be accessed here is full of ideas on ways to make our cities and homes safer, while saving taxpayers money. The Rio Grande Foundation has previously put out some recommendations relating to criminal justice reform.

President Obama made a Clintonian lurch to the Republican side when he agreed to extend nearly all of the Bush tax cuts. But what to make of the deal?

In the sense that Obama has exhibited a willingness to abandon the left on tax matters, this is good news for his presidency and for the US as a whole. One might think that I’d be a huge fan of the agreement.

You’d be wrong. I strongly believe — and the data back me up on this — that out-of-control spending is the main problem facing our nation. I’d rather have seen Republicans in Congress have abandoned the tax cuts in favor of serious spending restraint. Instead, Obama has successfully used the tax cuts to keep spending.

The tax deal certainly makes future spending restraint more politically-difficult as Democrats and large swaths of the population will view the Republicans as hypocrites on closing the deficit (they are, but not because of the tax cuts, they are hypocrites because they have not been serious about slashing spending). The Democrats are the really sad case here, however. As columnist Jeff Jacoby notes, the left’s extreme reaction to extension of “tax cuts for the rich” clearly illustrates their reliance on the politics of envy and their basic misunderstanding of money and property rights.

If I were in Congress, I’d hold my nose and vote for the deal, but I’d be darn sure that Congress tightened the reigns on spending and did so immediately.

Update: interesting points made counter the agreement by Charles Krauthammer who I don’t always agree with.

Recently, a federal judge in Virginia struck down portions of federal ObamaCare legislation. This is a good first step, but there are multiple suits and the fight will continue — probably all the way to the Supreme Court.

As Tom Molitor writes over at NMPolitics, there are many reasons for incoming New Mexico Governor Susana Martinez to add New Mexico to the list of states suing the federal government.

While my Grandparents on my mom’s side moved to New Mexico after World War II and my mom went to Pius (when it was on the East Side of Albuquerque), my father’s side of the family was from Cincinnati. That’s where I grew up. I actually grew up in Reading, OH in the same town as new House Speaker John Boehner. We also went to the same high school, the Catholic Moeller High.

All this relates to a 60 Minutes interview of Speaker Boehner that aired yesterday which included a discussion of his upbringing and life in Reading. I wish Boehner was a stronger advocate for limited government, but hopefully he is willing to make the tough (and often unpopular) decisions necessary to get America back on the right track. Check out the interview here:

Last week on New Mexico In Focus, I appeared on the panel of experts (which included former Rep. Dan Foley). Check out the video below and see if you agree with the issues and how they were discussed:

Watch the full episode. See more New Mexico In Focus.

Other states are waking up to the fact that film subsidies simply don’t bring in enough jobs and revenues to justify the massive expenditures of taxpayer dollars. According to this article from Businessweek:

Kansas and New Jersey have suspended their tax credits. Rhode Island has capped subsidies at $15 million annually, and Wisconsin’s are set at a measly $500,000 a year. Arizona’s program is set to expire on Dec. 31. Larry Brownell, head of the Association of Film Commissioners International, which represents 41 of the 42 states offering credits, predicts half the states will shelve their programs within a decade.

Given our $400 million deficit, it would seem that it is high time for New Mexico to at least cap its film program.

There has been a lot of talk around town about the football coaches at La Cueva, HS who have been disciplined for allowing some members of the La Cueva football to drink on a team bus come back from a state-playoff game. Whether this was a mere oversight or a purposeful decision is unknown at this time.

In the private sector, the coaches might be put on unpaid leave while the matter is investigated and would be fired if the allegations prove to be true. In this case, the coaches have been placed on paid leave and transferred.

Now, I’m not sure how transferring a “problem” teacher or coach makes any sense, but it is being reported that the Albuquerque Federation of Teachers has filed a complaint against APS on this point. Does the union oppose ANY sanctions against the coaches or just the transfer? If the coaches are found to have been neglectful in this case, will the teacher stand in the way of the firing of these coaches?

Unions CAN play a valuable role in society by representing the interests of their members, but it would certainly seem that these coaches — with their paid administrative leave — are getting a pretty good deal.

UPDATE: Is the leave for these coaches paid or unpaid? In an article in Saturday’s Journal Hailey Heinz states that it was unpaid leave. The Channel 13 article says it is paid….will get to the bottom of this.

UPDATE 2: I have confirmed with Heinz that indeed the coaches are on unpaid leave. I actually agree with the union that transferring “troubled” employees is not wise, so I guess that is that!

In case you haven’t heard already, the City of Rio Rancho has finally given up on its Green2V venture/debacle.

Our own Jim Scarantino (formerly of New Mexico Watchdog) had blown the whistle on Green2V months ago, so I am glad to see Rio Rancho finally catching up to reality. Scarantino had uncovered the fact that Green2V was not a viable enterprise and that Rio Rancho would be wasting taxpayers money be offering incentives for the “company” to set up shop in the so-called “The City of Vision.”

No word on whether Jim has received so much as a basket of fruit from the City. It’s the least they can do considering how much he saved them.

You have more than likely heard reports about the Transportation Security Administration’s (TSA) controversial procedures at the Nation’s airports. The sad truth is that without Congressional action or internal decisions by TSA, the new “backscatter” machines and gropes at the security line will not go away anytime soon.

But that doesn’t mean that we can’t do anything to improve airline security and Councilor Lewis should be commended for his new legislation R-172 and Albuquerque voters and taxpayers should express their support to their City Councilors via email or at the upcoming Council meeting on December 20.

Why? Although procedures would not be changed immediately, if Lewis’s measure to opt the Sunport out of TSA and hire private screeners is adopted, the Sunport’s security would likely be improved. That’s because TSA, as transportation analyst Bob Poole writes:

TSA is both the provider of airport screening and the regulator of all aspects of aviation security. TSA regulates itself and has hidden its mistakes in the past. It suppressed a report in 2007 showing that private security companies were at least as effective as TSA screeners and that if more careful accounting were done, were probably less costly, too. TSA never released that report, but the Government Accountability Office blew the whistle on TSA’s attempted coverup.

TSA has a monopoly over regulation and a near-monopoly in terms of actual security provision, how effective and efficient (not to mean customer-friendly) are monopolies? Nonetheless, a dozen or so airports across the nation have opted out of TSA including Kansas City and San Francisco, so this is not uncharted territory. While immediate cost savings are unlikely because TSA dictates the wage scale even under the “private” model, costs will certainly not go up.

Lastly, opting out of TSA will send a message to TSA that the citizens of Albuquerque are not pleased with the “service” being provided and that Congress needs to reform TSA or abolish it entirely and allow the airlines and airports manage security themselves. Lewis’s effort is not radical and it won’t solve our problems right away, but it is a big step in the right direction. Drop your Councilor a line and let them know what you think.

Recently, the Rio Grande Foundation published this report detailing several specific, significant spending cuts that could help Governor-Elect Martinez and the Legislature close the budget deficit (currently estimated to be $400 million). Now we need your help!

Take this quick survey which will allow you to choose the cuts you’d prefer to see and preserve the programs you feel are worthwhile. We will make the final results of this survey available on our website when the results are in (after the New Year). We will also submit the results to the incoming Martinez Administration.

Take the survey and pass the survey link along to your friends and other contacts!

This useful chart illustrates how federal spending and taxing levels have varied over the last few decades.

Clearly, federal spending has risen dramatically in recent years, while the economy has hit tax revenues. The chart is taken from an article written by Veronique de Rugy at the Mercatus Center who puts a few big-picture ideas on the table for balancing the budget.

As de Rugy notes “Since Bill Clinton left the White House in 2001, total federal spending has increased by a massive 60 percent in inflation-adjusted 2010 dollars. In fiscal year 2010, which ended September 30, the federal government spent $3.6 trillion, or 25 percent of Gross Domestic Product. That’s the most spending, in terms of percentage of GDP, since 1946. Likewise, last year’s $1.5 trillion deficit, as a percentage of GDP, was the largest deficit since 1945.”

Most people didn’t think the federal government was “too small” when Clinton left office. It would seem that some tough decisions on spending should be all that we need to eliminate the deficit and that significant tax hikes as outlined in the federal debt commission would be unnecessary if Congress and the White House get serious about cutting the federal budget down to size.

It was known by those “in the know” at the time of purchase, but with a front page report in Sunday’s Albuquerque Journal, it became public knowledge that New Mexico taxpayers are on the hook for a lot more than they bargained for with the Rail Runner. With track being purchased that may never be used and annual maintenance costs in the millions of dollars annually, we are being RailRoaded. Read more on this sordid story from Rob Nikolewski at Capitol Report New Mexico.

I love it when our friends on the left feel threatened (now is one of those times). In flush economic times, our friends on the left support massive spending for the Rail Runner, Spaceport, and unlimited expansion and zero accountability for wasteful and incompetent programs like K-12 education, film subsidies, and Medicaid. When the economy turns south and fiscal conservatives like the Rio Grande Foundation (and elected officials) start looking for cuts, suddenly it would appear that all government does is provide roads and fire departments.

For a little detail on this, check out our recent opinion piece and the response from Gerry Bradley of Voices for Children. Bradley and his allies on the left seem to think that we at the Rio Grande Foundation simply hate government and want to abolish roads and fire departments. This is simply not the case and, if government limited itself to “the basics,” we’d be the happiest people around.

Unfortunately, government does way too much and diverts resources away from the basics. As you can see from this document, roads and highways form a small fraction of the state’s budget.

Bradley also fails to see that in the absence of a government role, the private sector would probably provide infrastructure that is far more focused and well-maintained than what the government provides. In Europe, for example, where gas taxes and gas prices are much higher than they are here — and are not dedicated to roads — toll roads are the norm.

The fact is that our society (both New Mexico and nationally) is simply not able to pay the bills for government at the size it is now. Cuts are needed. Ideally, politicians will cut the fat and leave the bones and core functions of government intact.

How do I know someone is either lying or doesn’t understand basic economics? There are a lot of ways to do it, but use of the term “multiplier effect,” particularly when associated with government spending, is one of the best ways to root out economic ignoramuses and liars. For more details on why the “multipler” doesn’t work, check out this excellent article on the Obama “stimulus.”

So, it was no surprise that half-way through an opinion piece in this morning’s Albuquerque Journal, the author (who defended the film industry and its subsidies), cited a mysterious three to one multiplier.

Then there is the issue of extending federal unemployment benefits — an issue that Congressional Republicans seem willing to capitulate on in order to continue the Bush-era tax cuts. Some seemingly credible economists claim that extending such benefits has a “multiplier effect.” Of course, the only “multipler” I’ve seen from expanding unemployment benefits is that we have multiplied the number of folks who have been unemployed for more than a year. It also multiplies the deficits of state unemployment funds.

How do we know that the multiplier effect is bogus? Economics is about creating wealth with limited resources. The use of government force to take resources from one person or group to another person or group does not confer upon that money any greater power than it had before. In fact, as humans, we have a proven track record of caring less about things that we don’t deserve and receive through inappropriate means than we do about what we have worked hard to gain ourselves.

In the meantime, keep your eyes out for the mythical “multiplier.”

I was on vacation and out of town over the Thanksgiving, so I was unable to get to some of the op-eds and other information on this blog. The most interesting and worthy of response was this piece on the Rail Runner. Simply put, the author makes several completely unsubstantiated claims regarding the Rail Runner. I’ll respond to each point in bold:

First, and most importantly, there are efficiency benefits that result when the Rail Runner reduces costs due to traffic congestion, road construction and maintenance, parking facilities, accidents and pollution. Simply not true. Portland, Oregon, the most transit-intensive city in the nation is also one of the most congested. In fact, most transit advocates want to INCREASE congestion

Second, there are the benefits to the people who were already using commuter buses in the Belen/Santa Fe corridor before Rail Runner and who now enjoy more comfortable and more frequent service. Is taking a bus to the Rail Runner and then taking another bus once you get off the Rail Runner really better than a shuttle bus? Also, which is quicker? The author makes an assertion but has no facts.

Third, there are the benefits to people who are physically, economically or socially disadvantaged who couldn’t travel before the Rail Runner, but now can. He just mentioned buses. Has anyone asked the handicapped? I’ve seen no polling on this, so again, an assertion with no backup.

The simple fact is that the Rail Runner is heavily-subsidized with little benefit in terms of the environment or congestion. It is time to shut it down.

Tom Molitor has a nice column over at NMPolitics outlining some of the personal leadership characteristics that Margaret Thatcher — one of my favorite political leaders of all time — used to turn England’s economy around during the 1980s. Thankfully, Martinez doesn’t face quite as dire a situation here in New Mexico as Tom points out, but tough decisions are going to anger those who believe they will be hurt by them.

Ironically, as many of the coal miners in England figured out, economic prosperity would ultimately create a stronger economy and better living standards for them and their families outside of the dirty and dangerous mines. New Mexicans who have grown reliant on government, could have the same epiphany as Martinez is forced to make needed cuts to turn New Mexico around.

It is a scary, exciting time in New Mexico (and the US as a whole). There is no doubt that tough action is required. Thatcher was one of the toughest, best leaders this world has seen.

I’m a pretty cynical guy when it comes to special interests and their desire to obtain a “free lunch” for themselves at taxpayers’ expense. So, rarely do things I read in the newspapers shock me. But, something said by film union flack John Hendry nearly made me fall out of my chair. He said, in reference to the latest report showing that the state’s massive subsidies for the film industry are an economic dead-end, that curtailing the industry’s subsidies “would amount to a tax hike.”

Clearly, what we have here is a failure to communicate. A tax hike is NOT a reduction in the amount of subsidy you receive from taxpayers (25 cents on the dollar in the case of the film industry). A tax hike is governments’ taking more of someone’s money than they previously did. See this recent post on combined reporting which is a genuine tax hike.

The film industry did not own or produce the 25 cents they are getting from taxpayers. Those who earned it did. Eliminating that giveaway would NOT raise taxes. Hendry is just plain wrong and either doesn’t understand the term or is making things up.

There is the grey area of traditional tax credits and other incentives that are also being debated (legitimately as we face a massive deficit). Good tax policy is flat, fair, and simple. Tax incentives tend to be focused narrowly at politically-powerful groups. Eliminating some of them may be a net tax increase, but reducing such special interest breaks can contribute to good, long-term tax policy.

Ultimately, what we own belongs to us. When government takes more of it than it did before, that is a tax increase. If we don’t set the terms of the debate at the outset, we’ll never get anywhere (and maybe that is their point).

The Internet is great. I couldn’t do what I do at the Rio Grande Foundation without it. Nonetheless, as Thomas Friedman rightly pointed out in his book “The World is Flat,” technology levels the playing field for EVERYONE regardless of the merits of their work or their arguments.

And, while I am used to being attacked by those who disagree with me and the Rio Grande Foundation for believing in smaller government, my personal integrity has never been attacked…until some guy named Christopher Dudley came along.

Dudley posted a bunch of accusations that mostly centered around two alleged points:

1) I lied about my background and resume;
2) RGF is a membership organization that has little support except from corporate sponsors.

The second argument is just silly. As this article points out, 501c3 non-profits are not really “membership” organizations. So, we don’t have “members” at all. His corporate sponsorship number is also completely fictional as that information is simply not available for 501c3s. The best financial information on non-profits is contained in a group’s 990 form and is available online at www.guidestar.com.

Now, to his claim that I am a liar. Here is my bio. It mentions that I have published in the Washington Post, Wall Street Journal, and US News and World Reports.

In some cases, there are more than one, but here is more than ample evidence to illustrate that I have not misrepresented myself.

Here is one from US News.

Here is one from the Washington Post (by no means the only one, for more, go to the Post’s advanced archival search page and type in “Paul Gessing”).

And here are a few from the Wall Street Journal, here, and here.

Anyway, I’d never have responded to this jackball because I have more important things to do, but mainstream news outlets inquired and I felt the need to respond. So, be careful out there and don’t believe everything you read online.

Over the Thanksgiving Holiday, Steve Terrell over at the Santa Fe New Mexican did a short piece discussing efforts by an organization calling itself We Are New Mexico which outlined its own budget fix ideas at about the same time as we released ours.

Their ideas included:

Bonding of Deficit Items.
Closing Foreign Corporate tax loopholes.

Review of top-heavy administrative positions vs. service positions.

Establishment of a ‘Blue Ribbon’ commission headed by the Governor and the Legislative leadership, and consisting of (but not limited to) business, organized labor and non-profit members to review state government and recommend long-term adjustments to make state government more effective in delivering the services that New Mexico’s citizens desire.

Provisions for an honest review and assessment of all tax incentives, to determine which actually create jobs and an improved New Mexican Economy.

A demand that proposed cuts are accompanied by an assessment of the impact on other aspects of New Mexico’s economy, fiscal status and especially on the most vulnerable people of our state.

The head of We Are New Mexico indeed has reached out to us at the RGF and we do plan to meet to discuss potential ideas that we share. And how about that verse of Kumbaya?

We’re definitely in favor of seriously looking at tax credits and incentives as most of them (the film industry’s in particular) are not effective. Also, reducing administrative expenses throughout government would be a wise move. The difference, of course, is that We Are New Mexico’s recommendations seem to be mostly general while ours are specific. We’ll see how things go at our meeting.