Albuquerque Journal business columnist Winthrop Quigley recently wrote about New Mexico’s flawed economic structure in the paper’s business section.

While I often disagree with Quigley, he makes some good points in the article. Nonetheless, as I wrote in my published letter below, policymakers have the power to make needed changes that will turn New Mexico around by attracting private sector businesses to the state.

Winthrop Quigley is spot-on in stating that New Mexico’s Economic Structure is Flawed in his recent article. There is no doubt that the state is too reliant on federal, state, and local government, nor can it be argued that – important as they are to the economy – it would be great to diversify beyond our mineral riches as a means of bringing money into the state.

History, as Quigley writes, plays a major role, but so do our poor educational system and government tax and regulatory policies. The onerous and misunderstood gross receipts tax which includes a wide variety of services and business inputs that are not taxed in other states is one obvious factor.

Governor Richardson seems to have been of two minds on economic development. On one hand his initiative led to dramatic income and capital gains tax cuts, but he also wasted money on the heavily-subsidize Rail Runner, film industry, and Spaceport, all while seemingly doing everything in his power to chase the oil and gas industries out of state.

History and geography indeed loom large, but other lightly-populated states have overcome these problems – like New Hampshire and Wyoming, to name just two. Governor-elect Martinez cannot change the equation overnight, but by balancing the budget with no tax hikes, creating a system of reasonable regulations, and dramatically re-vamping New Mexico’s K-12 system, she’ll be moving us a long way toward the balance that Quigley (and the rest of us) desire.

No matter which side of the political spectrum you analyze them from (here is a list I put together of analyses from the left, right, and center), economists keep coming back with the same answer: “Film subsidies are bad policy and don’t generate economic prosperity.”

The latest such study was undertaken by the Center for Budget and Policy Priorities, a national, liberal group that finds such subsidy programs to be “Too Little Bang for Too Many Bucks.”

On this day we take stock of all that we have to be thankful for. And, while the nation is in debt and the state faces a massive budget deficit, living standards in the US continue to rise. So, from our family to yours, Happy Thanksgiving!

Oh, and if you are not familiar with the REAL story of Thanksgiving and how property rights and free markets saved the day, be sure to read this.

We’ve all heard the horror stories about the grope-a-thons at the airports. I wrote about them here. Now, we find out, that according to this article some government officials will not be subject to the screenings at all.

Of course, most government officials worth their salt will fly on the government’s own jet fleet, but even if they are subjected to flying commercial, they’ll be exempt. In other words, TSA security hassles are just fine for the rest of us, but for the government’s elite, they are unacceptable.

While calling Obama a Stalinist or a true “socialist” may still be over the top, is there any question that American society is starting to look like the Soviet Union where a small ruling class controls society and the rest of us just do what we’re told?

I’ve written in this space on several occasions about New Mexico’s fractured and all-too-reliant on the government business community. Nonetheless, the Martinez Administration provides an opportunity and the budget situation provides a necessity for the business community to step up and make New Mexico government more effective and efficient.

The opinion paper in Sunday’s paper was a good start. But, with $452 million in savings needed, it is time to move beyond platitudes and generalities and into specifics. We at the Rio Grande Foundation outlined some tough budget cuts. These are by no means the only opportunities for savings, but I’d love to know what specific savings the business community has been looking at and work with them. After all, it’ll take the united efforts of the business community, the Martinez Administration, and fiscal conservatives throughout the state to close the budget gap and change New Mexico government for the better.

Personally, I think that if they are going to name the I-40/Coors Interchange near my house after Bill Richardson, they should buy “Fathead”-style pictures of Richardson, so that I can drive over the top of him and make him eat my global-warming-inducing exhaust whenever I like (after all, I want to remember the guy, right)? Nonetheless, I stuck to a narrower script about the role of politicians in society and whether having this interchange named after Richardson is appropriate or not for an interview with Channel 4.

Watch the interview below:

The naming of buildings and other projects after one’s-self is nothing new, nor is it a partisan problem. House Speaker Ben Lujan, US Sen. Pete Domenici, and Rep. Sheryl Williams Stapleton have all named government buildings after themselves even though they are still/were in office.

Gov. Richardson has long been known for padding the state work force with so-called “exempt” employees. Now, like rats fleeing a sinking ship, those government workers are trying to find the safety of being “classified.”

Allowing this to go unchallenged would pile millions of dollars onto the payroll at a time of massive deficits. It would also preclude more qualified workers from pursuing their jobs. View the Channel 4 report on the incoming governor’s efforts to do the right thing here:

An article in the business section of today’s Albuquerque Journal caught my eye. “Los Cuates May Fill Space at Sunport.” Well, that’s nice, it looks like the spot vacated by Gardunos will be filled.

Then I read further into the article…subject to approval from City Council…! Seriously, regardless of what actually happens with this vote — I hope it is approved — is managing the restaurants that do business in the Albuquerque Sunport really the job of City Council? Me, I’d like to see management of the terminal done by a private company which would likely do a better job at a far lower price…and they wouldn’t have to get City Council’s approval to add a new restaurant.

In case you missed it, on last night’s 10pm news, I sat down with the folks at Channel 13 news to discuss our budget cutting ideas. The full report is available below:

Certainly, the ideas are not popular with those who we are trying to place on the chopping block, but the only other set of proposals I’ve seen from a left-wing group called “We are New Mexico,” is not very specific and doesn’t seem to cut very much. That group’s cuts are available below:

Selling severance-tax bonds to avoid cutting state jobs. Senate Democratic Leader Michael Sanchez introduced a bill in this year’s Legislature to issue $76 million in bonds to avoid job cuts. However, the measure never made it to the Senate floor.

Closing out-of-state corporate tax loopholes. (Martinez, during the campaign, said she was opposed to legislation to plug this loophole, equating it to increasing taxes.)
Reviewing “top-heavy administrative positions” as opposed to positions necessary to provide needed services.

Reviewing all tax incentives to see which are beneficial to the state and which are not.

Check out this news story (disregard slightly annoying ad) from New York on an effort by a few local teens to do something productive by holding a bake sale. A busybody council man “caught” the two engaging in such nefarious activity and shut the effort down because “the two were selling for their own benefit rather than a charity.” More details on the situation in this article.

There are two really interesting things about this situation:

1) Teen unemployment is a real problem in this nation and this kind of government meddling is a major reason (26% percent according to this article). Minimum wages are another. But, what better ways to kill the natural entrepreneurial spirit of a couple of teenagers than for city bureaucrats to make life difficult on them;

2) The somewhat less jerk-like Robert Snyder (another city bureaucrat interviewed in the story) says that “he’d be happy to sell them a permit for $1 or something — if they are going to use the money for college — just to show them that there’s a cost of doing business.” This guy makes me almost as sick as the other councilor who stopped the teens in the first place.

The inputs in terms of flour and sugar cost money; so does the time to make the baked goods and sell them; the only thing government does is stand in the way (this is a microcosm of almost all government interaction with business). Lastly, I find it morally offensive that Snyder feels the need to lecture these two youngsters on what they can do with their earnings. It is THEIR money after all and they should be able to engage in economic activity in any legitimate way they wish and do with their money what they want, regardless of the wishes of government.

I don’t know how often similar things happen here in New Mexico, but I do know that Doug Turner (an RGF board member) had to pull some political strings when he was a kid trying to run his own lemonade stand.

Just in time for the Holiday travel time, the TSA’s searches have become ever more intrusive and absurd, not to mention expensive with the newest scanners costing between $130,000-$170,000 per unit. . As a government bureaucracy, however, we have very few options for opting out of their system or going elsewhere for the “service” of airline security. There is also, realistically, zero competition with TSA.

The problem has created situations like this one where it would seem like a young woman was targeted for her looks. Byron York argues, justifiably, that more airports should opt out of using TSA to provide security. That’s nice, but I prefer the idea of abolishing the TSA entirely as this guy writes at Forbes.

Just in time for the Holiday travel time, the TSA’s searches have become ever more intrusive and absurd, not to mention expensive with the newest scanners costing between $130,000-$170,000 per unit. . As a government bureaucracy, however, we have very few options for opting out of their system or going elsewhere for the “service” of airline security. There is also, realistically, zero competition with TSA.

The problem has created situations like this one where it would seem like a young woman was targeted for her looks. Byron York argues, justifiably, that more airports should opt out of using TSA to provide security. That’s nice, but I prefer the idea of abolishing the TSA entirely as this guy writes at Forbes.

I for one plan to opt out of the scanner when I travel out of Albuquerque this Friday.

Tom Molitor writing over at New Mexico Politics describes just a few ways in which New Mexico’s budget either doesn’t make sense. Also, today, the Rio Grande Foundation released more than $450 million specific savings that would adhere to Governor-Elect Martinez’s campaign pledge to not cut Medicaid or K-12 education.

Read the short report here.

There is a lot for fiscal conservatives to like in President Obama’s Fiscal Commission. A full explanation of the first draft can be found here. A shorter summary can be found here. Specifically, the discretionary and defense spending cuts need to be considered and, while politically difficult, should attract some support from both sides of the aisle.

The most questionable aspects of the plan focus on Social Security with reform ideas such as:

Index the retirement age to longevity — i.e., increase the retirement age to qualify for Social Security — to age 69 by 2075.

Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient.
“Increase progressivity of benefit formula” — i.e., means test part of Social Security benefits by 2050.

Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that’s only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages.

This is a massive tax hike and is designed to make the program another welfare program (redistribution of wealth) rather than the original vision of a “social safety net” for all Americans. Liberals have typically opposed efforts to make Social Security more “progressive” as the system will lose needed support from the wealthy, but that strategy appears to have been abandoned.

Personally, I think it is obvious that Social Security needs to allow young people to opt into a system where they own their own accounts. All the tax hikes and raising retirement ages is like rearranging the deck chairs on the Titanic.

Of course, the recommendations are nowhere near as fiscally-conservative as I’d like. The folks at Americans for Tax Reform explain the many issues fiscal conservatives might (and indeed should) have with the plan. Nonetheless. it would seem that the spending reductions are a good place to start. Hopefully they provide a foundation for a needed national discussion.

One way that President Obama, Congress, Susana Martinez, the Legislature, and even city governments could spur their respective economies is by abolishing most professional licensing or at least making such licensing optional. Thus, if you wish to go to a business that is licensed by the relevant government agency, you are free to do that (and pay whatever the additional price is for such services). If you wish to patronize an unlicensed establishment, be that a restaurant, barber shop, or even a doctor, you should be able to do that, but they must tell you that they are not government licensed.

This would create competition while spurring economic growth, and it would put busy-body regulators out of business and force them to find real jobs. One recent illustration of how crazy such regulations can get is from Los Angeles where police raided several African-American barber shops due to a lack of licenses.

Another example is of a hot dog vendor in North Carolina that would have had to obtain a license to operate from his competition. He is now in jail.

Government licensing may be well-intended, but it often leads to abuses. To enable competition while preserving it for those who want to keep it in place, I say make it optional.

On Wednesday the 10th of November, the Rio Grande Foundation hosted Ivan Eland, author of “Recarving Rushmore” for a talk on the best and worst presidents in US history and how President Obama ranks among those.

Rob Nikolewski over at Capitol Report has an excellent account of the event and a brief interview with Eland. Check it all out here. Eland’s full talk can be found here.

While I certainly look forward to working with increased numbers of conservatives here in New Mexico, I am also excited about the prospects of divided government putting the brakes on out of control spending in Washington. Why is that? Simply put, spending growth is far lower when power is split among the parties in Washington. And, with the Republicans controlling the House and Democrats in control of the Presidency and somewhat more tenuously controlling the Senate, we might just see some more restraint in Washington in the years ahead. Check out the charts below for a vivid illustration of the benefits of split government:

On Tuesday, November 9, Paul Gessing of the Rio Grande Foundation presented to a group of senior citizens as part of an OASIS class. The title of my talk was “How Does New Mexico Rank?” My powerpoint presentation with lots of interesting charts and graphs can be found here.

There’s lots of information on the economy, education, and New Mexico government.

One of the Rio Grande Foundation’s greatest achievements includes having worked with the Legislature and Governor Richardson to reform New Mexico’s eminent domain laws to protect property owners against eminent domain abuse in the wake of the Supreme Court’s Kelo decision. In fact, according to the Castle Coalition, which works on such issues, New Mexico’s property protections are among the strongest in the nation.

Unfortunately, the folks at the City of Rio Rancho — despite a specific carve out in the current law — remain dissatisfied with current restrictions and are looking to introduce legislation enabling local governments to engage in additional takings.

A hearing on the issue was held in Santa Fe last week and I went to register concern. Check out my brief comments below:

With the dust now settled from the 2010 election, the time for balancing the budget and cutting spending is now. Thankfully, there are a lot of smart people out there with some good ideas — even those that can be agreed upon by the left and right — that can go a long way toward closing the federal budget deficit.

National Taxpayers Union and the lefties over at PIRG have come up with $600 million in specific spending cuts;

Brian Riedl at the Heritage Foundation has put together his own list of $343 billion in spending cuts;

Ben Friedman and Christopher Preble over at Cato have put a list together of $1.2 trillion in defense-related spending cuts (over the next ten years).

These are just a few of the specific spending cut proposals I’ve seen. If the new Republican majority in the House is serious about cutting spending, they need to start with a few items on these lists and add their own touches.

President Obama is traveling through India and the far east and while we at the Rio Grande Foundation have had many differences with the President and his economic policies, Obama rightly noted that India’s economic development helps rather than hurts America’s economy and creates rather than destroys jobs. The broader point here is that free trade is economically beneficial.

The question I have is why Obama has not supported free trade agreements like the pending one with Columbia and South Korea.

These initiatives would help open new markets to American goods and services. Obama should work with Republicans to expand free trade as a means of helping to turn the US economy around.

I talked to Mike Jaxson of KSVP Radio in Artesia about the 2010 election, Susana Martinez’s victory, Steve Pearce’s return to Congress, and the Environmental Improvement Board’s carbon cap power grab.

Take a listen here.

Mayor Berry has wisely announced that Albuquerque cannot afford to waste taxpayer money on an expanded convention center complex. While the Mayor left the prospect of this project open for the future, he did take a firm stand against those like Councilor Ken Sanchez who see no problem with raising taxes in a down economy for a project that will benefit only a small sliver of the business community while adding to the City’s debt burden (which includes $78 million in outstanding debt on the current facility).

The Mayor’s decision shows that he is serious about fiscal restraint and turning around Albuquerque’s economy by making it attractive to businesses and entrepreneurs rather than using taxpayer dollars to target specific industries and groups for largess. Thank you Mr. Mayor!

I admit it: I am a fan of late-night comedian/political host Jon Stewart and his Daily Show. So, it was with great interest that I followed his “Rally to Restore Sanity” last weekend in Washington, DC.

While Stewart is definitely to the left of center, he has an anti-establishment streak that I enjoy. He gave an interesting speech at the end of last weekend’s rally that I think sums up Stewart’s frustrations — and those of many on both sides of the political spectrum in this country — over the lack of civility in the political discourse.

While I agree with most of what Stewart says, he (and most on the left) fail to understand that one of the big reasons for the lack of civility is that the use of government force to take over health care or control the economy (through cap and trade), and the generally-expanding role of the federal government is bound to generate increased hostility. After all, no person or group of persons can make decisions for 300 million other people that makes everyone happy. That doesn’t even take into account the reality that frustration increases when some are forced to pay the bills for others.

That is why the Founders emphasized both voluntary interaction and federalism. The reality is (as Stewart notes in his speech) that Americans get along extremely well when we interact voluntarily (the double-thank you moment, for example). It is when a distant and isolated federal government must make one-size-fits-all decisions on education, health care, and the economy in general that people start to get frustrated.

Hopefully, the folks in Washington get the message from the voters that Washington is simply incapable of solving our problems and that average people working voluntarily together have always done a better job at this. We’ll see whether they got the message.

Last night’s election results certainly represented a shift towards conservatism and the GOP here in New Mexico and nationally. With the election of Susana Martinez as the nation’s first Hispanic female Governor, fiscal restraint and limited government will hopefully be the dominant paradigm for the next four years.

While it was not as prominently reported — and it would seem they announced their decision on Election Day to keep it that way — New Mexico’s Environmental Improvement Board approved a New Mexico-only carbon cap.

So, Governor-Elect Susana Martinez faces an important early decision as far as what she should do with regard to the EIB’s carbon cap (which she has said she strongly opposes). An executive order rescinding the would be one way to repeal the new regulation which will, if it is not stopped, harm New Mexico’s economy by forcing 63 large industrial sources of greenhouse gas emissions – including power plants as well as oil and gas companies – to reduce emissions by 2% per year until 2020.

I hope Martinez takes action upon her inauguration to rescind the carbon cap. It will undoubtedly be an important early decision for the Governor-elect.