With the Iraq War finally over, it is time to take account. Whether you supported the War or not on principle, it is worth noting that the Iraq War’s costs to the US economy were not trivial. The latest estimate is that the War added $1 trillion to the US debt. I would expect that number to rise as the costs of caring for vets is still to come.

Also worth noting is that the US unemployment rate was a mere 5.9% back in March of 2003 (the month the war started). Notably, the onset of the Iraq War ushered in an era of dramatic increases in overall federal spending and debt.

So, am I saying that the Iraq War led us to our current economic condition? No, not by itself, but conservatives need to realize that war is a government program and an expensive one at that.

Recently, the National Forest Service announced that the Capulin Snow play area in the Sandias would be open for only 3.5 hours per week. The problem, of course, is supposed federal budget cutbacks. I don’t understand how you can’t afford to hire some minimum wage, temporary help to stand around and supervise a bunch of sledders for a few months when the budget has doubled since Clinton’s last year in office, but that’s another story.

Leaving all that aside, however, what if the bureaucrats at the National Forest Service got creative (ha, ha, creative bureaucrats, I know) and outsourced management of the play area to a private company for the winter? People who want to bring their kids to sled ride or play could pay $1 a head and more than pay for the necessary staff. Similar ideas have worked at parks elsewhere as our friends at PERC (the Property and Environment Research Center) have pointed out.

With all of the federally-funded boondoggle programs out there (ostensibly for the children here and here), it is high time for the feds to leverage the private sector to get our kids out of doors in the mountains.

Sometimes, the title of a newspaper article doesn’t convey the content of a particular article. In the case of “House Builders Want Profits, Not Communities” which appeared in the Albuquerque Journal and was written by a local architect (more on that later), it certainly did. The entire article was a rant about Americans being “fat,” “lazy,” “only interested in the short term,” and simply needing to be told what is best for them.

I am no expert on building codes, but I can tell a control freak from their writing and the author of this piece is definitely one. Not surprisingly, the driving force behind the Albuquerque building code is/was Isaac Benton who just so happens to be an architect.

If you don’t like condescending jerks and you do like saving money on new buildings and houses, tell your City Councilor to support repeal of the current building code and replacement of that code with the “International Energy Conservation Code” or show up at the City Council meeting on Monday, January 19.

(Albuquerque) Florida Gov. Rick Scott recently made headlines around the country when he argued that institutes of higher education in his state of Florida should prioritize funding for the study of science and technology in the his state’s institutes of higher education.

Said Scott, “If I’m going to take money from a citizen to put into education then I’m going to take money to create jobs…so I want the money to go to a degree where people can get jobs in this state. Is it a vital interest of the state to have more anthropologists? I don’t think so.”

One may agree or disagree with Scott’s statement, but prioritization of limited resources is essential. In order to better understand how those resources should be allocated in higher education in New Mexico, the Rio Grande Foundation undertook an effort to survey members of the boards of regents of the state’s six public senior universities on their views of their schools’ mission statements. Unfortunately, poor returns – only 26.7% of the regents responded – seem to indicate that many of the people responsible for leading these institutes do not take their mission statements seriously.

Said Pat Leonard an adjunct fellow with the Foundation and the lead author of the new Rio Grande Foundation report “Are Mission Statements Mere Window Dressing in New Mexico?,” “The regents are political appointees charged with the guidance of New Mexico’s public universities. As such, we expected far more enthusiastic participation and willingness to share views on their institutes’ mission statements. Unfortunately, this was not the case.”

Rio Grande Foundation president and co-author of the report noted that, “Without a clearly-stated mission, policymakers are left to judge for themselves whether New Mexico’s higher education institutions are achieving their goals or not. In times of constrained budgets, it is more important than ever to have a clear understanding of what these schools are attempting to achieve.”

The full report is available online here.

A sample survey containing the questions that were sent to each regent can be found here.

Canada has abandoned the Kyoto Protocol on global warming. According to the aforementioned report, Canada will save $14 billion in penalties for not achieving its Kyoto targets — targets that other nations in the Kyoto agreement seem unlikely to reach as well.

This decision by our neighbors to the north further begs the question as to why New Mexico would cap its own carbon emissions when the shift seems to be heading in the opposite direction.

Also, it continues the move by Canada towards economic freedom and away from socialism and big-government as illustrated in the Heritage Foundation’s Index of Economic Freedom. Yes, Canada has socialized health care which means that 1) American medicine isn’t that far from socialism already 2) Canada must be pretty damn free market outside of the health care sector.

Of course, Canada very much wants to produce oil from its tar sands. If Obama wanted to create jobs, he could have done so with the stroke of a pen by approving the Keystone XL Pipeline. Oh, and, at 7.4 percent, Canada’s unemployment rate is still significantly lower than the US rate of 8.6 percent in the US.

Seems like one country is moving in the right direction and the other is moving in the wrong direction!

As mentioned in recent postings, the Rio Grande Foundation recently hosted a screening of the film “Sick and Sicker” and then had a discussion of health care issues and health care reform led by Dr. Deane Waldman.

Dr. Waldman led the 50 or so attendees in a discussion and here are his notes and responses to the many issues that came up. If you do not live in the Albuquerque area and were unable to attend, keep an eye on this space as we will be hosting other, similar events in the New Year.

(Albuquerque) Recently, a report called the “Trial Urban District Assessment” (TUDA) was released (see charts here). The report compared student scores on the National Assessment of Educational Progress (NAEP) in 21 urban school districts including Albuquerque. The Rio Grande Foundation and others have used New Mexico’s poor performance on the NAEP to argue for education reforms.

APS Superintendant Winston Brooks, upon release of the report, was quoted in the Albuquerque Journal as being “pretty ecstatic” about data showing that APS was “about average” compared to the 20 other cities in the report.[1] Brooks went on to say, in a press release on the report that, “These results are encouraging because they show that APS is doing at least as well, and in several cases better, than many of the nation’s urban school districts facing similar educational challenges.[2]”

But how similar are they? According to a Rio Grande Foundation analysis of the data (using US Census numbers), the families of students in APS are wealthier than 17 of the 20 districts analyzed in the TUDA report. In some instances, districts mentioned in the report had poverty rates more than two times that of APS.[3]

“Interestingly-enough,” noted Rio Grande Foundation President Paul Gessing, “students in Miami-Dade, which of course has followed the ‘Florida Model’, brought to New Mexico by our Foundation, out-performed APS despite having higher poverty numbers.”

Gessing continued, “Poverty should not be a deciding factor in whether a child is educated or not. That is we have long argued for educational choice and reforms emphasizing accountability. Nonetheless, the worst possible conclusion to draw from the TUDA data is that administrators, parents, and legislators should be pleased because APS students are performing as well as their peers in other major cities, when in reality the students in these cities are in a state of poverty far worse than our own.”

This chart shows where APS is in terms of poverty relative to the other school districts mentioned in the report and which ones outperform APS on 4^th grade reading.

[2] APS Test Scores Comparable to Big Cities, December 7, 2001, http://www.aps.edu/news/aps-test-scores-comparable-to-big-cities

[3] US Census Bureau “Small Area Income and Poverty Estimates”: http://www.census.gov/did/www/saipe/district.html

I find columns like this recent one in the Albuquerque Journal which urges retailers and other chain businesses to look to Southwest Albuquerque especially frustrating. The author complains that chains like Flying Star and Weck’s are overlooking his neighborhood.

Leave aside people like our esteemed Senator Tom Udall who believes that we should all support “small businesses.” Presumably, this eliminates chains like Flying Star and Weck’s, and it most certainly eliminates Lowe’s (another retailer the author complains about not having).

But, if there are so many great business opportunities in Southwest Albuquerque, why doesn’t the author and some of his friends and neighbors gather some money and start their own business? That is, after all, how most of these big chains became big. Someone at some time decided to quit complaining and put their money on the line to start something they believed in. It is the entreprenurial spirit that made this country great and it is this mind-set, not that of whiners and “Occupiers” that is going to get us back to prosperity.

Of course, when you do succeed and people come out in droves to oppose you, it might make you think twice about wanting to start that business in the first place.

Just in time for the upcoming 2012 legislative session, a new scientific poll from the Friedman Foundation for Educational Choice shows that large majorities of New Mexicans endorse school choice. A press release on the polling data can be found here. More details on the poll itself can be found here.

62 percent of surveyed voters in New Mexico support proposals similar to those that have been introduced in the New Mexico state legislature to offer individuals and corporations tax credits for donating to nonprofits that distribute private school scholarships.

78 percent of New Mexico voters polled support a tax credit program providing special needs students with private school scholarships.

65 percent of New Mexico voters rate their public school system as “Fair/Poor” compared with only 32 percent rating it as “Good/Excellent.”

I was asked to help shed some light on issues relating to the Sunport’s observation deck which was a controversial Mayor Marty project in the 1990s and is currently closed for repairs. Check out the article here and the video here.

As Rob Nikolewski of Capitol Report New Mexico pointed out recently, Medicaid is going to gobble up an ever-greater share of the State budget absent reforms. Of course, the left-wingers over at Voices for Children never met a budget cut they could get behind, so they have opposed efforts to rein in Medicaid spending at every turn.

We, at the Rio Grande Foundation, on the other hand, have repeatedly pointed policymakers to various ideas that could slow the growth in Medicaid without harming care quality. Long term care insurance is particularly ripe for reform. Ironically, it is relatively wealthy seniors who use planning techniques to stick taxpayers with the bill for long term care.

The following chart from our friends at the Washington Policy Center illustrates who receives Medicaid and where the costs are:

Medicaid Recipients by Category and their Per-Person Costs for FY 2005
Category               % of Total Recipients               Cost per Recipient/Year

Children                 51%                                            $1,667
Adults                    24%                                            $2,475
Aged                         9%                                            $13,675
Disabled                  16%                                           $13,846

Certainly, it would be nice to have an Administration in Washington that was serious about making Medicaid a sustainable program, but this one is too busy expanding the program and both parties have been ignoring the problem for years.

Maybe the economy IS turning around. In addition to the opportunity to lead the new Americans for Prosperity chapter in New Mexico, the transparency group Foundation for Open Government (FOG) now has a job opening for an executive director as well. The Rio Grande Foundation has frequently worked with FOG to pry government documents out of the bureaucracy and into the sunlight.

For more information on the job with FOG, go here.

The Rio Grande Foundation has been working to promote and illustrate the benefits of “virtual education.” But what does the term mean? Any time a school uses a computer could be viewed as “virtual education,” but to us it is far more revolutionary than simply placing a computer in the classroom. The power for virtual education is that it can change the way an education is delivered in terms of empowering students and allowing the classroom to be “flipped.” That means that the traditional teaching is largely done outside of class while the tutoring is done in the classroom.

One important virtual education model is called “blended learning.” The following short video explains how virtual learning can work in different classroom settings:

The Fundamentals of Blended Learning from Education Elements on Vimeo.

With all the talk of the 99% and income disparities in the United States, one might think that there would be some empirical evidence that less inequality would automatically be a good thing. The reality is that greater inequality may actually be a good thing for the so-called 99% (or at least the bottom 50%).

Check out this chart. The data are income data from the Tax Foundation (which took its data from the IRS). And, from the looks of things, income inequality in 2009 was about where it was back in 2001. During the intervening time period — an economic boom of strong income growth and low unemployment, by the way — inequality between the top 1% and the bottom 50% rose dramatically.

Why is this? The fact is that when the economy booms, the wealthy are in a better position to make more money. As the saying goes, “it takes money to make money.” When the wealthy buy boats, more middle and working class people are hired to build those boats, sell them, and maintain them etc. When the economic crisis hit, all Americans took a hit, but the very wealthy actually took a harder hit than the rest of us.

In the Journal of Nov. 28, economist Robert Samuelson claims that health care costs are “out of control.” Quite the opposite: They are totally in control – by the government.

That is a problem.

Health care refers to goods and services delivered by hospitals and providers to be consumed by patients. Costs to providers and institutions are driven more by government regulation and bureaucracy than by labor costs or MRI machines. Meanwhile, payments to providers and institutions – what Samuelson calls “costs” – are controlled by government.

Note that when the Patient Protection and Affordable Care Act (“Obamacare”) cut “Medicare costs” by 21 percent, they cut Medicare payments to providers. Therefore, they cut services to patients. As Robert Moffit of the Heritage Foundation testified before Congress, “you cannot get more of something by paying less for it.”

Meanwhile, the spending on – the costs of – the federal health care bureaucracy went up by six whole new agencies, hundreds (thousands?) of bureaucrats added to the payrolls, and multithousands of new rules and regulations.

So the government controls and increases spending to/on itself, while it controls and decreases spending on patients.

Want proof? Of all the money spent on “health care,” 40 percent – that is over $1 trillion in 2010 – disappears. It goes to health care but provides no care.

That statistic is before adoption of the health care act, which could raise the disappearing dollars to half of all health care spending!

Samuelson goes on to use the recent Office for Economic Cooperation and Development report to explain U.S. overspending: steep prices and abundant provision of expensive services. Hogwash! As Samuelson knows, “price,” also known as charge or bill, is meaningless in health care, meaningless in terms of what gets paid.

As a doctor, I can charge whatever I like for a cardiac catheterization in a baby. The actual bill can read $2,000, $4,000 or as is commonly true, over $5,000. Regardless of my “price,” I get paid $387. That is what the government pays. So the price may seem steep, but the payment is peanuts.

For Medicare, just like for my caths, payments are now lower than the cost-of-staying-in-business. So if you want to know why you can no longer see your Medicare doctor, it is because the more Medicare patients she or he sees, the quicker the doctor goes broke.

The prices may seem out of control or steep, but payments to providers are tiny and shrinking.

How much of the true cost of health care (goods and services) to hospitals and providers is for administration and for regulations? No one knows because no one measures that, either. The administration guesses its own cost, and government conveniently ignores the costs of regulations. To make matters worse, the public sees rules and regulations as no-cost items.

Samuelson very rightly asserts that, “the system needs a fundamental overhaul to deliver more value for money.” No one disagrees – except those in charge. In order to determine value, one must measure cost and compare it to benefit. Does the government measure the benefits of health care? The answer is a resounding No! So how can you-the-consumer, whom I call We the Patients, assess value? If you know only part of the numerator and none of the denominator of a cost/benefit ratio, you can’t.

Finally, Samuelson practices really bad medicine. He jumps directly from symptom identification (overspending) to treatment plans (vouchers or single payer) without going through the critical step of root cause analysis.

If you want to cure something, be it a sick person or a sick system, you must treat the cause of illness. Financing is only one part of the sickness in health care. If we try to fix it (overspending) without recognizing its root cause as well as others, we are certain to fail, just as Obamacare – with its expanded control – is certain to make health care, We the Patients and America sicker.

Dr. J. Deane Waldman is the author of “Uproot U.S. Healthcare” and an Adjunct Scholar with the Rio Grande Foundation

Today, D’val Westphal’s “Road Warrior” column in the Albuquerque Journal noted some comments from a bike rider on our recent report on the stimulus-funded bike bridge over the Rio Grande.

The comments included a critique of our methodology with valid points like:

bike commuters leave earlier than rush-hour traffic because it takes them longer to get where they’re going. Placing someone on the bridge for 50 minutes during rush-hour is simply too late. Second, bike commuters wouldn’t be dressed in work clothes, unless they work in bright/reflective clothing designed not to get caught in a bike chain. Bike commuters change into work clothes after they arrive.

Fair enough. This was not meant to be an exhaustive economic analysis of traffic on the bridge. After all, we don’t have the resources or man-power to station people on the bridge for hours at a time throughout the year. That is why, in our original release on the bridge, I stated “After a year, it would be great if a government agency provided some data on whether or not this bridge was worth the cost, but that is not the way government operates.”

In other words, it would be great if government did a final analysis over the merits of its spending projects, but it does not. It just spends the money and goes onto the next thing regardless of the success (or, more likely failure) of the spending. For more on this, see today’s Albuquerque Journal “Poor Predictions” on the failing, taxpayer-financed Santa Ana Star Center.

The Environmental Improvement Board is accepting comments now and holding a public comment period on the New Mexico-only carbon emissions cap. The hearing will be held on December 5. If you can make it up to the meeting, by all means, please do so. If not, at least take 5 minutes and send some written comments to the board. I have sent mine and pasted them below. Feel free to use parts of my comments in your own letter!

RE: REPEAL OF 20.2.100 NMAC

December 1, 2011
Ms. Carmella Casados
Board Administrator
Environmental Improvement Board
Harold Runnels Building
1190 St. Francis Drive, Room N-2153
Santa Fe, NM, 87505

Dear Ms. Casados:

The following are my comments in support of repeal of Greenhouse Gas Reduction Program 20.2.100 NMAC.

I write to strongly urge the Environmental Improvement Board (EIB) to repeal the program above. While the science on global warming and the potential for humans to positively or negatively impact the climate through their actions remains unsettled, there is no doubt that this carbon cap will increase the cost of electricity for New Mexicans.

New Mexico is one of the poorest and most sparsely-populated states in the nation and cannot afford to further regulate its economy in ways that will make it less economically-competitive. And, while environmentalists tout the supposed economic benefits of carbon caps in spurring “renewables” like wind and solar, the reality is that these energy sources cost more and are less reliable than existing power sources.

While private citizens and businesses should feel free to adopt these power sources if they so choose, the EIB and, by extension New Mexico’s government, should not force such power sources on unwilling consumers, many of whom have low income levels and are unable to pay the higher costs associated with these power sources.

Simply put, if so-called “renewables” are the future of electric generation, this future will come in its own time and way which could be completely different from current expectations. It is not the role of government to pick winners and losers while sticking consumers with the bill. Please repeal the Greenhouse Gas Reduction Program.

Sincerely,

Paul J. Gessing

President

It is something we’ve repeatedly pointed out in the past — more education spending has not improved educational results. But, Rob Nikolewski’s latest report on the state’s poor education results over the last several years only corroborates what we’ve been saying. Says Sen. John Arthur-Smith (D), Chair of the Finance Committee: “If you look at the overall trend, additional monies thrown for educational reform really didn’t support the improvements the taxpayers expected.”

We’re not surprised, but we are hopeful that virtual schools and education tax credits (among other possible components of the “Florida Model“) will be on the agenda for the 2012 legislative session.

Screening of the film “Sick and Sicker” and discussion led by Dr. Deane Waldman, author of “Uproot U.S. Healthcare”

About the event:

The Supreme Court has decided to hear the case against the “Patient Protection and Affordable Care Act,” more commonly known as “ObamaCare,” which, if not overturned, will have dramatic implications for Americans’ health care.

• What will be the end result of “ObamaCare” if it is fully-implemented?
• How will your health care be impacted?
• What is next for the future of health care in the United States?
• Can we get “free-market health care” if part or all of “ObamaCare” is overturned?

Come and learn more about the pitfalls of government-run medicine and the possibilities ahead.

• Who: You’re invited
• What: Screening of film “Sick and Sicker” followed by …
• Open Discussion: With Q&A on the future of health care in the U.S.A.
• Where: The Albuquerque Museum (Art Museum) auditorium
• When: 6:00 to 8:00PM on Thursday, December 8, 2011
• Cost: $10 payable at door includes light beverages and snacks

About the film:

Logan Darrow Clements shows what happens when “the government becomes your doctor” using licensed news footage from Canadian TV, interviews with doctors, patients, journalists, a health minister, a Member of Parliament, a doctor who went on a hunger strike as well the producer’s own Canadian relatives. Clements even rents a hospital to show the mismatch between supply and demand in a medical system run by politicians. Sick and Sicker puts “ObamaCare” on ice with cold hard facts from Canada.

About the speaker – Dr. Deane Waldman:

Deane is passionate about fixing our sick healthcare system. On both the professional and personal levels, Deane has been exposed to every aspect of health care: practicing medicine, administration, research, teaching, as well as being a critically ill patient himself. Combining this first-hand experience with his MBA knowledge and his research in management and business, Deane shares valuable insights into the root causes of why the healthcare system continues to fail patients, nurses, doctors, and our country, and most importantly, what you can do about it.

Deane has been a practicing pediatric cardiologist for over 35 years. He has authored more than 300 articles on both the practice of medicine and healthcare strategy and is an Adjunct Scholar for the Rio Grande Foundation. His first two published books were “Uproot U.S. Healthcare” and its translation into Spanish: “Cambio Radical al Sistema de Salud de los Estados Unidos.” His third book – “Not Right!” – explores the controversy over a right to health care. It will be available in June 2012.

Awhile back (before the project even got off the ground), I wrote about the Lead and Coal reconstruction project. This project which is costing $26 million is designed to decrease auto speeds on the roads in favor of bike paths.

Something I didn’t anticipate happening with this project is that it would kill area businesses, but according to the Albuquerque Journal, at least two businesses in the area have closed their doors and others are teetering on the edge resulting on this petition.

Worse, Councilor Rey Garduño is pushing for Zuni (which feeds into Lead and Coal) to be put on a similar, bike friendly “road diet.” Garduño is not known for his business-friendly policy stances, so it is no surprise that he doesn’t seem to be considering the ramifications such a major construction project might have on area businesses. Of course, the rest of us should be wondering if further shutting down one of the City’s best-moving East-West road corridors is a good idea and whether limited taxpayer money should be wasted on such projects.

I recently wrote about Grover Norquist and the blame he has taken in the media for the failure of the “SuperCommittee.” Interestingly-enough, 60 Minutes, which has done some really good stories recently, did a story on Grover and the “anti-tax” pledge:

Simply put, avoiding tax hikes is not a “silver bullet” for smaller government, but it is a starting point for holding politicians accountable. The battle for the next decade is to hold the line on taxes while getting spending under control and making “entitlement” programs financially-sustainable.

Liberal New York Times columnist Paul Krugman recently wrote a column touting the “fact” that solar-generated electrical power is now cost-effective. Perhaps Krugman has not seen the chart below:

To further explain why Krugman is simply ignoring reality, check out this excellent post from Todd Myers of the Washington Policy Center (our sister think tank in Washington State). Myers will be traveling to New Mexico to discuss his new book “Eco Fads” in February of 2012.

The Rio Grande Foundation has continued to push for increased transparency in government. They are YOUR taxpayer dollars, after all! Check out this recent article on our transparency efforts here.