They say that it is always darkest right before the sunrise. And, while there are a few signs of life out there economically, the fact is that most Americans are pretty pessimistic these days. Brad Lips over at the Atlas Economic Research Foundation, an organization that works with organizations like RGF overseas, views the situation in a more optimistic light.

He makes his case over at the American Thinker.

Energy expert Robert Bradley is speaking at an upcoming Rio Grande Foundation-sponsored luncheon on November 10 (more information here). Bradley has a very interesting article on the Keystone XL Pipeline over at the Cato Institute’s website.

According to Bradley, “A new influx of up to 700,000 bpd from Canada will dramatically increase U.S supplies and in turn drive gas prices down. A study from Energy Policy Research Foundation found a greater supply of Canadian oil could save Gulf Coast refiners almost $500 million annually in transport costs, which, in turn, would mean lower prices for consumers at the pump.”

Also, “by 2019 employment directly related to Keystone XL could grow from 80,000 jobs to 179,000. If the flow of Canadian oil through the United States remains unchanged, however, total employment from the Keystone line will peak at 94,000 in 2019.”

This would seem to be exactly what the doctor ordered for the US economy. For more information on the proposed pipeline and a petition on it, go to this link.

The Washington-based Tax Foundation has an excellent new report on unemployment insurance. It explains the history of unemployment insurance, the problems that have arisen over the years, and includes many charts and graphs with specific comparisons among the states. It also includes some ideas for restoring/reforming state unemployment systems.

With all of the discussion in New Mexico on the need to reform unemployment insurance, this would seem to be an important paper for legislators to take a look at.

Rob Nikolewski over at Capitol Report has a great summary of the paper and some potential reform ideas for New Mexico’s elected leaders.  The South American nation of Chile has already implemented something called “individual unemployment accounts.”

Here’s how they do it in Santiago:

• Workers pay 0.6 of their wages into individual accounts, and employers pay a further 1.6 percent of the worker’s wages into the account.
• Employers pay a 0.8 percent payroll tax into a “solidarity fund” that pays benefits to new or low-wage workers when their accounts are exhausted.
• Accounts are conservatively invested in a variety of securities by managing funds that also operate the workers’ retirement funds.
• After a worker’s account has accumulated sufficient funds to pay five months’ worth of benefits, no further contributions occur.
• The worker’s individual account pays out when the worker becomes unemployed or retires. Unemployed individuals can withdraw 30 to 50 percent of their previous wages each week for up to five months

This letter of mine appeared in the Albuquerque Business Journal on Monday:

I read with great interest Winthrop Quigley’s recent column on the anxiety New Mexico’s small bankers are having in relation to the latest, costly regulation coming from Washington.

Most salient was the point made by Lordsburg banker Michael Martin who has concerns about compliance costs and worries that smaller banks with small legal staffs are less able to comply with reams of new regulations than are some of America’s banking behemoths. This is the single biggest issue with all government regulations and it is why Dodd-Frank, far from solving the “too big to fail” problem will actually exacerbate the issue.

Of course, these regulations come on top of untold billions of dollars in bailouts provided by the federal government to the big banks that did so much (along with Fannie and Freddie which are left unaddressed in Dodd-Frank) to cause the current financial crisis.

When it comes to picking winners and losers, governments have a long track record of doing a terrible job. The Solyndra solar subsidy scandal and the banking bailout boondoggle illustrate the top-down, statist thinking that has kept the US economy in the doldrums for more than four years now.

The most important “law” in Washington is the law of unintended consequences. At least, I hope they are unintended, but it surely seems that when the left in particular desires some government action, the result has the opposite result of what was originally intended.

I wish policymakers would be consistent: if land is zoned for retail and big-box (whether that be Whole Foods, Trader Joe’s, or, heaven forbid, Wal-Mart), they should get out of the way if such development comes about. On the other hand, it shouldn’t be necessary for taxpayers to put up money for big box retail as is currently under discussion before Bernalillo County Commission in the case of a proposed shopping center at Coors and Rio Bravo.

The developers of this South Valley project are asking for $1.5 million from the County for infrastructure needs in something called a “LEDA” grant. Unfortunately (at least for the developers), according to the County’s own data, is not clear that the project fits under that type of grant (retail is not a permitted application for LEDA grants).

There is no doubt that the South Valley is “underserved” from a shopping perspective. That being the case, this development should be a very profitable opportunity for developers and thus, will likely move forward regardless of subsidies.

RGF President Paul Gessing recently appeared on “In Focus” on KNME Channel 5. The discussion covered Afghanistan, the “Occupy” movement, San Juan County’s junk ordinance, and several other timely issues. View the full show below:

Watch October 14, 2011 (s5e16) on PBS. See more from New Mexico In Focus.

Jon Hendry of the New Mexico Federation of Labor recently defended the Obama “Jobs” bill in the Albuquerque Journal. His rhetoric repeated several supposed justifications for more federal spending that don’t hold up under closer scrutiny:

Claim 1: Obama’s “Jobs Bill” will rebuild our infrastructure. Of course, that was the justification for the original $800 billion “stimulus.” How much of it was used on infrastructure? Not much as the chart below illustrates. Essentials like infrastructure are often used to sell more spending and waste. And, not all infrastructure is created equal:

Claim 2: We need to “revive manufacturing”: the fact is that US manufacturing is producing more economic value than ever. Sure, we could do even better, but protectionism is not the answer. Ironically, the recently-passed free trade agreements could indeed be a major boon for US manufacturing.

Claim 3: We must provide the funds to end state and local government layoffs that cut essential public services: I’m not sure what “essential” services have been cut and who the “we” is. At least in New Mexico, I can’t point to any major layoffs by governments.

Claim 4: Our elected leaders should extend unemployment benefits and work much harder to keep homeowners in their homes: Extending unemployment benefits will lead to people staying unemployed for longer periods of time. People need to stay in the work force to keep their skills sharp though there are some specific, free market ideas for making the jobs market better. In terms of working to keep homeowners in their homes, this is a reasonable idea depending on the specifics.

Rather than raising taxes on some in order to foist another “stimulus” on the American economy, Obama and Congress need to cut spending and regulations to put the economy back on a firm footing. The signing of these trade agreements is the best thing to happen to the US economy since Obama became President. Hopefully he builds on that.

I saw the Sunday Albuquerque Journal on the supposed “rise of the independent voter” in New Mexico.

And, while I found the article informative on the whole, I think it missed the point. See the chart below. What it shows to me is a rapid decline in the number of registered Democrats in New Mexico while the number of Republicans has held steady during the last three decades.

The tenor of the article, rather than focusing on the massive shift of Democrat to independent, seemed to imply that both parties are losing influence. The reality is, however, that large numbers of voters have clearly expressed their frustration with one party, that being the Democrats.

So, what does that mean to an independent, free market think tank? Simply put, as I’ve written before, when it comes to education, the reformers fighting for progress include Gov. Martinez and supporters of her reforms which includes nearly all Republicans and some, but by no means all, Democrats. Also, if you haven’t noticed, Democrats, the party that generally supports bigger government, laws supporting unions, and more government spending, have controlled the Legislature for nearly the entirety of New Mexico’s 100 years of statehood. New Mexico has also been poor for decades (and as far as I can tell has never been among the wealthy states).

Is the relative decline of the Democratic Party in New Mexico a good thing? One-party rule of any kind is dangerous and inevitably leads to corruption and a lack of intellectual openness. To me, this is the story behind the story. With any luck it sets the table for a more economically and educationally-competitive New Mexico. Perhaps it will also lead to larger numbers of Democrats bucking the “old party line” and becoming Clinton-esque “New Democrats?”

I discussed education reform and its prospects with union boss Ellen Bernstein and Arlie Woodrum of the UNM Department of Education last week. During the discussion, Bernstein adamantly denied that K-12 teachers in New Mexico are given tenure and said the policy was eliminated in the 1980s.

I based my statement that New Mexico teachers are given tenure after three years on this critical report by the liberal Center for American Progress. So, what’s the truth? Well, I found this and this, both of which assert that tenure for New Mexico teachers comes after three years.

Debating not one, but two education “experts” is tough enough, but debating them when even the most basic of facts is not acknowledged is nearly impossible. It also makes substantive progress on the issues a real challenge.

With all of the talk about another so-called “stimulus,” could it be that out-of-control spending is the cause of our economic problems, not the solution to them?

The Rio Grande Foundation is co-sponsoring an upcoming luncheon on energy policy with Robert L. Bradley Jr., the CEO and founder of the Institute for Energy Research. Bradley is also the author of a new book: “From Edison to Enron: Energy Markets and Political Strategies.”

Bradley is one of the most knowledgeable commentators of the day on a wide variety of energy policy issues. The luncheon is in Albuquerque on November 10, 2011. More information and a link to the event registration site can be found here.

Too often, the debate in Washington centers on what certain political “leaders” are willing to do. Given the fact that our economy needs more in terms of a boost than either party seems capable of considering, the folks at Reason have asked several libertarian/free market leaders to give their thoughts on how they’d turn the economy around.

Ideas include everything from repeal of ObamaCare to repeal of Sarbanes/Oxley and eliminating the minimum wage for people younger than 25.

These are just some of the possibilities that will likely never get a hearing in Washington, but should be on the table if our government is serious about unleashing economic growth.

As the special session made clear, many of the Democratic leaders of the Legislature are not serious about tackling education reform. With New Mexico children consistently coming in 49th in the nation in a variety of education measures, one would think that there would be a groundswell of change.

Interestingly enough, as I point out in this new opinion piece, there ARE bi-partisan efforts being made to make needed reforms, but with the current “leadership” in Santa Fe, it would seem that that at least SOME are perfectly happy failing generations of New Mexico children.

Today, in the Albuquerque Journal’s Business Outlook section, I had an article discussing the changing economic and political climate and how the various changes facing the nation and New Mexico may impact the state.

The article can be found here.

I suppose I have been remiss in posting SOMETHING about the “Occupy Wall Street” crowds. Aside from agreeing with them that bank bailouts are/were bad, the crowds seem largely made up of socialists. Well, here is a great music video from ReasonTV that more or less sums up the situation:

Certainly, the last decade or so has not been the best in our nation’s history and our heavily-regulated, bailout-friendly version of capitalism is not perfect, but a little perspective is certainly in order.

We know several important things about President Obama now that he has been in office for nearly three years. Two important details are that he doesn’t care much for medical freedom and that he has no use for the concept of federalism.

So, it was only a matter of time before the Administration decided to crack down hard on medical marijuana. Of course, the political left is shocked that Obama would be as harsh or even more harsh than Bush was, but Obama hates freedom and that’s really all there is to say.

The thing that really kills me is the politics of this. Medical marijuana is an 80-20 issue with 80% of Americans supporting it. It boggles the mind that any politician facing a tough battle for re-election would give away an issue like that. I guess Obama is “The One.”

It is amazing to me what passes for “economic analysis” on the left. Take the recent column by Moises Venegas. Among other claims he makes in his piece is that “for the past 40 years, wages for the working population have been stagnant.” According to Merriam-Webster, “stagnant” simply means not advancing.

Well, even according to the liberal Center for Budget and Policy Priorities, this is not true. Median incomes have increased since the 1970s as seen in the chart below:

Of course, this is only one aspect of the wrongness of his entire argument.

For starters, just because someone was poor back in the 1970s doesn’t mean they are still poor today. Since 1970, hundreds of thousands of people have immigrated to the US in search of a better life. While some immigrants have done very well for themselves, is it unreasonable to expect that they bring the median income number down somewhat?

Also, of course, there are the things that can be purchased with that money. As the Heritage Foundation points out, the number of Americans with air conditioning have increased from 36% to 83.9%, the percentage of households owning a computer is now 68%. Our society didn’t collapse when no one had a computer or air conditioning. Is Venegas saying that jealousy over inequality in distribution of these and other consumer items will?

Lastly, aside from the old saw “tax the rich,” Venegas makes no mention of how we can reduce inequality. Personally, I think that in a globalized world, there will be both more wealth and higher living standards for all, and greater inequality among Americans. There is not much that can be done (nor should there be) except to reform our education system so that more Americans can compete in the global, information economy.

The fiscally-conservative group Americans For Prosperity is currently touring the country to demand that Congress “Cut Spending Now.” The organization’s bus will be rolling into Albuquerque next Monday. Yours truly will be on the speaking docket.

Details on the Albuquerque tour stop are as follows:

9:00 – 10:00am
Monday, October 10th
Albuquerque Marriott
2101 Louisiana Ave NE
Albuquerque, NM 87110

We at the Rio Grande Foundation have long argued on behalf of reduced federal spending which has grown out of control in recent years.

Come out to support fiscal restraint!

With all of the education data out there, mostly focused on the state level, it can be a bit of a challenge to make comparisons between the results achieved by students in your own school district and those of the nation as a whole and students in other developed nations worldwide.

Problem solved. Thanks to Josh McGee and Jay Greene who put together a Global Report Card for the George W. Bush Institute, this information is now available at your fingertips. Residents of Albuquerque can see how students at APS stack up against students elsewhere in New Mexico, elsewhere in the nation, and around the world. Residents of Farmington and Las Cruces can do the same thing.

According to the report, in 2007, APS students outperformed 15% of students in developed countries in math and 36% of students in reading.

How about the “smarty-pants” sons and daughters of wealthy scientists and engineers up in Los Alamos? Interestingly enough, they outperform just 34% of international students and 61% of them in reading. That performance looks even worse when compared against that of students in Canada. Los Alamos students outperform only 26% of Canadians in reading and 51% in math.

Again, check out the interactive website here.

Albuquerque voters have had their say on a variety of issues and ballot measures. And, while voters don’t always get the best information and make decisions out of ignorance, I can’t find too much to argue with in terms of the results.

Getting rid of the red light cameras as 53% of voters supported seems like the right move. Hopefully, City Council will heed the intent of the voters’ and get rid of the cameras. In terms of traffic safety, it would seem that voters prefer to have real, live, police officers enforce safety and violations rather than cameras. Kudos to Councilor Dan Lewis for his leadership on this issue.

In terms of “ABQ The Plan,” voters said “no” in a resounding 62-42% vote. I believe this was largely because the “Sportsplex” idea was not well-thought out and voters did not like being asked to “buy” the Sportsplex and the Paseo Interchange at the same time.

I firmly believe that the Paseo/I-25 interchange would have won in a landslide if it were on the ballot by itself and hope that the Mayor and City Council will set aside resources for that project rather than allocating money for higher salaries for public employees.

In terms of the other bond measures, they all won overwhelmingly. I’d like to see some of these fail every once in a while just to show that voters won’t blindly support them, but that’s a mere quibble.

In a relatively small and poor state like New Mexico, there are all too few organizations out there working on public policy ideas and reforms. One group with which we have worked in the past is called Think New Mexico.

I’d describe them as a “moderate” or “centrist” think tank while the Rio Grande Foundation is avowedly free market, but their recent proposal on New Mexico’s broken Public Regulation Commission (PRC) is excellent and would result in some much-needed reforms. Read a brief summary on the reform proposals from their website and a more detailed story on the report from Capitol Report New Mexico.

According to Think New Mexico, the proposal would improve the PRC by making the following changes to it:

-Creating a separate Department of Insurance;
-Transferring the State Fire Marshal to the Department of Homeland Security & Emergency Management;
-Consolidating corporate reporting in the Office of the Secretary of State
-Eliminating duplicative regulation of railroads by the PRC and DOT;
-Moving ambulance regulation to the Department of Health Deregulating market entry and rates of motor carriers and ending duplicative regulation of motor carrier safety and insurance by the PRC and DPS;

Second, we recommend increasing the qualifications of PRC commissioners by requiring candidates to have either a four-year college degree or five years of relevant professional experience.

(Albuquerque) For the third time, the Rio Grande Foundation (other papers were published in 2007 and 2009) has produced a report comparing the gross receipts and property tax burdens of New Mexico’s top 10 cities in population. And, while minor shifts abound within the report, the City of Rio Rancho has seen the most dramatic increase in tax burden and the most dramatic increase relative to other New Mexico cities.

The City of Vision was in the middle of the pack with the 5^th-heaviest tax burden as a percent of income back in 2009. Due to increases in both property and gross receipts tax rates in Rio Rancho, the City’s tax burden jumped from 9.19 percent of median personal income, to 10.74 percent. This gave Rio Rancho the dubious distinction of having the heaviest tax burden among major cities in New Mexico according to the new report.

The 2011 tax burden study is available here.

For the sake of comparison, the 2009 tax burden study is available here.

According to the new report, Farmington and Albuquerque saw the biggest improvements in their relative tax burdens. Farmington improved from 3^rd-heaviest to 5^th-heaviest overall burden as a percent of personal income while Albuquerque went from heaviest burden in the state to 3^rd-heaviest, largely due to property tax rate reductions in recent years.

Said Rio Grande Foundation president Paul Gessing of the new report, “While actual tax burdens will vary based on actual expenditures, property tax assessments, and the length of home ownership (due to New Mexico’s statewide 3 percent cap), this report provides useful information on the evolution of various tax policies in cities statewide.”

“Particularly useful,” according to Gessing, is the “historical record of various tax rates that can be found since this is the third edition of the “Tax Friendliness” report.

What a great opinion piece in today’s Albuquerque Journal by Thom Wright of Castle Builders. He explained in specific detail how different regulations within the Albuquerque Code either make no sense or simply raise costs without doing anything to make the Code more environmentally-friendly.

Codes like this are tough for free market advocates who don’t have expertise in the field. Philosophically, we can say that unwise and extreme regulations don’t make sense economically and are unfair because prospective property owners don’t demand them (so instead we have governments imposing them), but it is more difficult to show specific examples of ways in which micro-managing aspects of the Albuquerque “green” code demands the impossible (energy star cooking appliances) or requires the addition of light fixtures for no reason.

Thank you Mr. Wright. Hopefully City Council sees the light as well.

We at the Rio Grande Foundation have long stood on opposite sides from the unions on the issue of education reform. For the first time, the head of the local Albuquerque Federation of Teachers has agreed to discuss the issues at a public forum. The event will be held on Wednesday, October 12 at the Jewish Community Center on Wyoming. More details are available here.