John Stossel recently had an excellent education special on his show “Stossel” which appears on Fox Business Channel. Recently, he had a great show on education reform that included previous RGF event speaker and educator Ben Chavis and DC schools Chancellor Michelle Rhee..

Check out the Chavis interview below with links to other segments here.

The Daily Show with Jon Stewart certainly tilts to the left, but when unions hire non-union, minimum wage workers to do their protesting dirty work for them (sound familiar?), the hypocrisy is too rich to pass up.

Warning, laughs ahead!

As you may already know, the Rio Grande Foundation has released its government transparency website, www.newmexicospending.com. I wrote an article for The Alibi which discusses the benefits of government transparency and our experiences with some school districts that were more (and less) willing to release supposedly-public data.

I have been honored to work these past two years with the Rio Grande Foundation.  But I’m off to other adventures.  My farewell from New Mexico Watchdog is here.

The Rio Grande Foundation has been at the forefront of efforts to put the government employee pension problem on the agenda. Look for writings by “Scott Moody” in the search box on our website. It is a good thing we’re on the ball because the more data that comes out on this, the worse New Mexico’s pension problems look.

For starters, there is a new study which Capitol Report New Mexico has written on showing that New Mexico’s pension plan for state employees will run out of money in the year 2023.

Among the other findings of the report are that New Mexico will be expected to pay out $2.6 billion in state employee pensions in 2024.

That $2.6 billion figure represents an estimated 46 percent of the entire state tax revenue for a given year

In other words, if the Rauh/Novy-Marx model holds true, in less than 15 years, New Mexico will have pension obligations that equal nearly one-half of the state’s entire annual intake of taxes.

To put New Mexico’s pension issues in perspective, a table I found (displayed below) from Moody and Warcholik shows that New Mexico’s maximum pension liabilities as a percentage of state GDP is third-highest in the nation:

The view from the left is that the Rio Grande Foundation is a mammoth organization, well-funded by oil companies, the health insurance industry, and other unpopular and self-evidently-corrupt industries. Little do they know. We are a “lean and mean” organization. In part, this means relying on volunteers. Two volunteers with whom we sometimes work are economists Micha Gisser and Kenneth Brown. These two wrote an opinion piece under their own, not an RGF, byline recently, that appeared in the ABQ Journal explaining their views on the upcoming election. Needless to say, this greatly upset the folks over at ABQ Journal Watch and even led to a letter to the editor that appeared on September 13th, “outing” the two as working with the Rio Grande Foundation.

Leaving aside the obvious right of Brown and Gisser to write a column and submit whatever they want to the paper, I want to actually discuss the piece itself. Gisser and Brown essentially argue that voters who are frustrated with the floundering economy should vote for Republicans. They have a valid point, but not really for the reasons they state. The primary justification for voting for Republicans to take over at least one branch of Congress is to slow the growth of government. As William Niskanen has written, over the past 50 years, “Government spending has increased an average of only 1.73 percent annually during periods of divided government. This number more than triples, to 5.26 percent, for periods of unified government. That’s a hefty premium to pay for a bit of unity.

I do not share Brown and Gisser’s belief that if we could wave a magic wand tomorrow to put the Republicans in power of the federal government that they would do much to shrink government. After all, many of these Republicans served while Bush was taking spending to ever-higher levels as President.

Brown and Gisser are welcome to their views and they provide welcome help to the Rio Grande Foundation, but there is no conspiracy. If they write on something that is too “political” or inappropriate for the Foundation, they are welcome to do so. Claiming that this amounts to a conspiracy of any sort is downright silly.

The New Mexico Environmental Improvement Board’s latest hearings on a cap-and-trade scheme for New Mexico only began last night. As reported by Rob Nikolewski, the EIB will be holding public hearings starting at 7pm in Santa Fe from now until October 1. If you care about New Mexico’s economy and don’t want an un-elected board to make such an important decision, I urge you to go up to Santa Fe and make your views known.

I testified last night on the many conflicts of interest on the board and called for the recusal of several members of the board who are on the payroll of environmental groups (or the oil and gas industry), none of which are likely to view the issues in an objective manner.

Constitutional Crisis is Appellate Attorney’s Topic at SFCC

Appellate attorney Rebecca O’Dell, will be holding a 45 minute presentation on “Our Current Constitutional Crisis” on Thursday, September 23 at 7 PM in the Jemez Rooms of the Santa Fe Community College. Odell will discuss the Constitution, each branch’s role within the Constitution, and how American citizens can regain control of their government.

Ms O’Dell has been traveling the country with this event to overwhelmingly positive reception. Rebecca O’Dell is an appellate attorney, practicing full-time before the U.S. Supreme Court and other federal and state appellate courts. She is an Alliance Defense Fund allied attorney and a member of its honor corps. She has filed several briefs to the U.S. Supreme Court which are awaiting a decision to be heard.

Tickets for the presentation are $10, payable at the door (Jemez Rooms, Santa Fe Community College). Space is limited to 200 on a first come basis.

Vic Bruno has worked in commercial real estate in Albuquerque for 40 years. With such long-term experience in Albuquerque and paying attention to real estate issues, he has a unique perspective to offer on past efforts to spur downtown development through major investments of taxpayer dollars.

Vic’s column in Sunday’s Albuquerque Journal is a must-read for those who think the latest and greatest in central-planning is the key to Albuquerque’s future economic success.

Today is Constitution Day, so celebrate that founding document and its many blessings of liberty for Americans. By way of actually restoring the Constitution, the Cato Institute has taken out ads in newspapers across the nation explaining to President Obama some tangible, specific ways that he could fulfill his pledge to:

“go through our federal budget–page by page, line by line–eliminating those programs we don’t need.”

Giving a national audience some insights as to what is happening in New Mexico, our Capitol Reporter, Rob Nikolewski recently wrote an article for the Washington Times that gave an update about the 2010 election in the Land of Enchantment.

While most New Mexicans are undoubtedly knowledgeable of the facts in the article, look for regular columns from Rob on the political scene in New Mexico to appear in The Times.

In today’s Albuquerque Journal, I am quoted on the issue of President Bush’s tax cuts and Congressional Democrats’ moves to raise taxes by allowing some or all of those cuts to expire. Simply put, as I’ve written before, the main issue is out-of-control spending, but raising taxes will not help our economy and is simply a cover for higher spending.

Left-wing New Mexico-based economist, Larry Waldman, senior research scientist at the University of New Mexico’s Bureau of Business and Economic Research, is all for higher taxes. He “thinks wealthier Americans can afford to pay more taxes — and the cash-strapped federal government could use the money. It’s more of an equity issue than an economic issue,” Waldman said. “The rich are not suffering nearly as much as the middle and lower classes.” Waldman seems unconcerned about spending or the fact that higher taxes will stifle economic growth, thus harming the very middle and lower-income taxpayers he claims to defend.

Unfortunate advice in support of bigger government and reduced economic prosperity from a guy who is supposed to “contribute to the economic well-being of New Mexico residents.”

Recently, Barry Massey of the AP wrote about the massive, 15% growth in federal spending last year alone. This 15% growth is just the tip of the iceberg. New Mexico receives more federal money per capita than all states but Alaska, Virginia, Hawaii and Maryland. As we’ve cited in the past, New Mexico is the most reliant state on the feds relative to what we pay in taxes.

Gerry Bradley of New Mexico Voices for Children thinks this is just grand and complained that “It’s very strange to see people railing against government when the federal government props up the whole economy here.” While the federal government may be propping New Mexico up right now, the pace of spending growth is both unsustainable and of dubious actual benefit to New Mexico. After all, we remain one of the poorest states in the nation.

Contrary to Bradley’s thoughts on the matter, there is now empirical evidence that increased federal spending in a particular state displaces rather than augments economic growth. The full-length research paper is available here and a shorter blog posting on the study can be found here.

Recently, our colleagues at the free market Center of the American Experiment, based in Minnesota, hosted a symposium on the topic of “How Can We Better Encourage and
Reinforce the Most Entrepreneurial and Talented Among Us?” I participated in this and my response, along with those of others — including Grover Norquist of Americans for Tax Reform, and other free market advocates — and that document is available here.

The fact is that, while much time and attention are (justifiably) focused on helping out those who need the most help, not much discussion occurs on the topic of how we all benefit from the efforts and innovations of the most talented among us.

There has been a fair amount of discussion recently about NM Senator Bingaman’s mandatory IRA proposal in Congress. If passed, this legislation would place yet another burden on businesses that would have to take their employees’ money and set up the retirement programs. I will be the first to admit that the Rio Grande Foundation does not offer such programs because they are expensive and costly to manage for a small organization. Instead, I take advantage of Roth IRAs.

As Rob Nikolewski with Capitol Report notes, Bingaman’s plan was developed with the help of the Heritage Foundation, an organization that we usually see eye-to-eye with, but not this time. My view is that if Congress wants to mandate that we save for retirement, they need to transform Social Security into a sustainable, ownership-based program rather than a Ponzi Scheme that is destined to go broke and disappoint those (at least of my generation) who expect to rely on it in their old age.

If you didn’t see it, on Monday of this week (Labor Day), the Albuquerque Journal had a great article about efforts by the Los Angeles Times to shed some light on the impact teachers have on student performance. The Times article can be found here.

Basically, the newspaper in LA is doing work that the education departments, the labor unions, and other education entities either won’t or don’t want to do. Among the basic findings were:

• Highly effective teachers routinely propel students from below grade level to advanced in a single year. There is a substantial gap at year’s end between students whose teachers were in the top 10 percent in effectiveness and the bottom 10 percent. The fortunate students ranked 17 percentile points higher in English and 25 points higher in math.

• Contrary to popular belief, the best teachers were not concentrated in schools in the most affluent neighborhoods, nor were the weakest instructors bunched in poor areas.

• Although many parents fixate on picking the right school for their child, it matters far more which teacher the child gets. Teachers had three times as much influence on students’ academic development as the school they attend. Yet parents have no access to objective information about individual instructors.

• Many of the factors commonly assumed to be important to teachers’ effectiveness were not. Although teachers are paid more for experience, education and training, none of this had much bearing on whether they improved their students’ performance.

The fact is that excellent teachers matter tremendously and they can overcome bad parents and many other problems, but they don’t share the traits for which teachers are rewarded and that teachers unions push as important. Our own Tom Molitor has written in support of greater transparency and grading of teachers in New Mexico. Read the full story from Tom here.

This might as well be the crux of Karl Holme’s opinion piece that appeared in the ABQ Journal today. Most of his arguments are the same as those of the other advocates for this project.

Such catch-words as “new revenue streams,” “investment,” and “direct spending” proliferate throughout the piece which is designed both to justify the current convention center and its further expansion. If he thinks this project is such a great idea, I’d love to see Mr. Holme get some private investors to put it in place. I’m not sure why he needs MY money for his pet project. After all, these projects have a long track record of leaving mountains of debt for taxpayers long after they’re obsolete or even demolished.

And, before you say, “oh, but don’t you see that it’ll create jobs,” I’d say two things. 1) In places where large-scale conventions are economically-viable, hotels will step up and build the facilities that the market will bear. Las Vegas, with its plethora of large hotels is one example. 2) Figures like “$36 million in direct spending” imply that local residents realize some defined monetary gain as a result, but the truth is that that the convention business is in a long term decline and this figure is merely pulled out of thin air with nothing to back it up.

I recently sat down with Channel 13 news to discuss Roman Abeyta’s incredibly generous — albeit not with the County Commission’s own money — $30,000 severance. Interestingly enough, and perhaps for the first time ever, the Rio Grande Foundation is on the same side as AFSCME on this one.

It has only been about 50 years and untold suffering by millions of current and past Cubans, but Castro has apparently admitted for the first time that the Cuban economic model “doesn’t work.” Ironically, while even Castro has realized that Communism is a failure, President Obama’s health care plan moves us a big step towards the Cuban model.

In the Albuquerque Journal’s Business section this Monday, columnist Winthrop Quigley made the following statement to start out his column: “Now that Congress and President Obama have decided they want a privately-run, free-market health care system….”

The rest of the column dealt with the lack of information that consumers have regarding their health care and Quigley even made the excellent point that if consumers don’t pay for their care (and insurance companies do), they have no access or reason to access this information. But I was still stuck back on the “free market” point. What was Quigley thinking?

So I emailed him and he was nice enough to email me back. He said in part that ObamaCare “leaves health care delivery to the private sector and preserves the private insurance industry….” therefore it is a “free market.” I beg to differ.

Even before ObamaCare takes effect, governments pay more than half the costs of Americans’ health care. Then there are literally thousands of restrictions and tax provisions — from the FDA which restricts access to new medication to the third-party-payment system that is created by Congrees’ tax exemption for employer-purchased car — that restrict our care and therefore restrict the “free market” aspects of US health care.

While a truly and completely “free market” is probably not on the table in today’s political climate and with the dozens of layers of regulations that have been piled on over the years, Whole Foods CEO John Mackey laid out a way that we can capture many of the benefits of the free market by making some common-sense reforms.

I recently talked to Mike Jaxson at KSVP Radio in Artesia about the ongoing Environmental Improvement Board hearings on a New Mexico-specific cap and trade system and the Rio Grande Foundation’s new government transparency website. Listen to the interview here.

The Rio Grande Foundation has released a new paper detailing the rapid rise to prominence and influence on the part of government employee unions. Study author Hal Stratton is the Rio Grande Foundation’s co-founder and served as New Mexico Attorney General from 1987-1990.

In his study, “A History of Public Sector Collective Bargaining in New Mexico,” Stratton traces the legal and political changes, both national and in New Mexico, that have made government employee labor unions among the most potent lobbying forces in politics. Tracing the efforts of unions to leverage their numbers (and votes) by bargaining collectively with politicians who rely on those very same votes to get elected back to New York and the 1950s to the present, Stratton presents a clear picture of a shrewd political strategy on the part of union organizers.

Stratton builds upon this history by illustrating how public employee unions in California have been a key factor in that state’s economic implosion, how California politicians are attempting to reverse that impact, and what California’s experience means for New Mexico.

Lastly, Stratton lays out a common-sense (albeit politically-difficult) path forward for New Mexico (and any other state’s) political leadership. As Rio Grande Foundation President Paul Gessing noted, “Hal Stratton has had positions of leadership both in Santa Fe and Washington, DC. He has the first-hand experience to offer a detailed and well-documented analysis that clearly explains the strategies government employee unions have used to achieve their power at the expense of average taxpayers and future generations of taxpayers.”

Solutions put forth by Stratton include:

• Abolish public-sector collective bargaining. Only about half of all states (including New Mexico) allow this practice and it disproportionately enhances the power of public employee unions;

• Transfer all new hires into defined contribution and out of defined benefit retirement programs;

• Make New Mexico a “Right to Work” state in which workers are not forced to join a union in order to hold a particular job;

• Stop relying on federal largesse for economic development and instead adopt low, flat, fair, and equitable tax and regulatory policies that will encourage private-sector growth.

Stratton’s full study is available for free at this link.

I had a letter in today’s ABQ Journal Business Outlook section. As Deroy Murdock stated at our Lights of Liberty event a few months ago, when it comes to economic crises, the reactions of politicians often worsens the situation instead of improving it. This applies to Bush’s ineffective “economic stimuli” as well as Obama’s. When a crisis hits, there may be certain policy issues that need to be resolved in a targeted manner, but massive, broad-based reforms can do more harm than good. This was what made the “Great Depression” so “Great.” Anyway, the letter is at this link and below:

In search of certainty

In Winthrop Quigley’s recent article about what he calls the “economic fear factor,” he brushes on a number of important topics as to why the U.S. economy and stock markets continue to founder. We’ve seen this movie before and many of these policies of uncertainty and rapid change are what caused the Great Depression to be “great.”

During the Depression, as described in Amity Shlaes’ landmark book “The Forgotten Man,” FDR’s “Brain Trust” embarked on an ever-changing mix of policies that were experimental and often in direct conflict with each other. This ever-changing policy environment transformed what was a severe economic downturn into a 12-year-long depression that only ended when the onset of World War II forced a coherent set of policies on the administration.

Obama’s administration, while supposedly obstructed by the GOP, has embarked upon a massive health care reorganization, forced new credit card policies on what was an efficient system, enacted financial regulations that failed to address the very roots of the financial crisis at Fannie Mae, Freddie Mac and the Federal Reserve, and is on the verge of allowing the largest tax hike in U.S. history with the expiration of the Bush tax cuts.

Add on top of that the fact that Bush and Obama have combined to double the size of the federal government in a mere 10 years from $1.9 trillion to $3.8 trillion and it is no wonder that businesses and consumers alike are waiting for some certainty before investing, hiring or spending.

Paul J. Gessing
Rio Grande Foundation
Albuquerque

In today’s Albuquerque Journal, I discussed the Rio Grande Foundation’s new study on public sector union collective bargaining and some ways to make Labor Day more meaningful (and prosperous) for all New Mexico workers instead of just those who work for the government. See the full newspaper article here.