Have you seen their organization chart? Check out the posting over at Capitol Report New Mexico.

$2.4 million in “stimulus money” for a pedestrian bridge in Belen (a Channel 7 story yesterday said it was $3 million, but the story is not online). Here’s a press release on the bridge. Somehow I suspect that this bridge is not only not worth $2.4 million in terms of economic benefit. What is all the more ironic is that Belen is furloughing government workers for lack of $145,000.

Brings up the question: where was AFSCME when the Rail Runner started rolling down the tracks?

Lodger’s taxes are often requested by well-connected owners of hotels, motels, and even campgrounds for the purpose of paying for advertising for the purpose of bringing tourists to town. Eddy County has had a lodger’s tax in place that was collected by the county but spent for the supposed benefit of the lodgers in the community. Then the lodgers decided that the tax money was not being used as efficiently as it could be — heaven forbid, government not using tax money efficiently — and that the businesses and community would benefit from eliminating the tax. A slam dunk, right?

Not so fast. The Eddy County Commission decided 3-2 to continue the tax, ignoring the pleas of those who supposedly benefit from the tax. The lesson here is not to ask for higher taxes, even if you think they will help your particular cause. After all, while you might think your industry or business will benefit from a particular program, once the tax is in place, you no longer have control.

The Rio Grande Foundation recently added a new Adjunct Fellow, Dr. Deane Waldman, to its stable of policy analysts. More information on him is available here and here. Waldman recently wrote and published an opinion piece in the Portales News-Tribune on the need for “rationing” of health care — or any resource — and the proper way to do it (hint, individuals have the most information about what they need and want).

On that Harrison Ford, Calista Flockhart ceremony in the Governor’s Mansion:

Looks like state subsidies of the film industry include a free event center for movie stars to get married.  Also looks like the subsidies are breeding a new class structure in New Mexico.  The elite glitterati get preferential and free use of state facilities like the Governor’s Mansion.  The little people can just watch from the curb.  New Mexico Watchdog reports

New Mexico has some problems including a struggling economy and serious political corruption, but I believe that no single institution is holding the state back to the extent that the K-12 system does so. I wrote about the situation and offered some specific, cost-free solutions in this week’s copy of The Alibi.

Last Friday, the Rio Grande Foundation honored two legislators and the Albuquerque Tea Party for their efforts on behalf of liberty and individual freedom in New Mexico during the past year. Recipients were Sen. Tim Keller for his work in reforming the State Investment Council, Sen. Sander Rue for helping to create the Sunshine Portal website (not online yet) which will dramatically improve government transparency, and Tina Carson and the Board of the Albuquerque Tea Party.

We sat down with each of the award winners and briefly interviewed them about their efforts:

Sen. Keller’s interview is here:

Sen. Rue’s interview is here:

Tina Carson’s interview is here:

City Council (minus Dan Lewis and perhaps Brad Winter) is obsessed with wasting $400 million of your tax dollars on a convention center expansion. At Monday night’s City Council meeting, Council voted 7-1 with Lewis opposing and Winter abstaining to ask the mayor to enter into an agreement with Albuquerque Public Schools to secure at least part of the First Baptist Church property for the events center/convention center expansion. APS is already moving forward with an $11.3 million offer for the site (a questionable deal in and of itself), at Broadway and Central, for use as a fine arts magnet school and performing arts charter school.

The City needs to expand its convention center about as much as we need higher taxes in this down economy. Oops, we’ve already got that. It’s just that a majority of the Council thinks 7% gross receipts tax is just too low. Effective July 1, 2010 our tax rate will increase from 6.625% to 7% for previously-enacted tax hikes. As we’ve pointed out in the past, the gross receipts is the worst tax imaginable.

The case against these projects is compelling from the left and the right. But plenty of special interests are pushing the issue and will not back down until the Mayor takes a firm stand for fiscal restraint and against higher taxes. Tell him what you think by clicking here.

What a mess.

Canada’s economy is receiving some good publicity these days. For starters, check out this recent article from the Associated Press.

While the Canadian banking system receives a great deal of praise in the article, late in the piece there is a brief mention of “slashed spending…and spending cuts,” but one unspoken, major, piece of the puzzle relating to Canada’s improving economy must be the increasing economic freedom of its citizens. According to the most recent Heritage Foundation Index of Economic Freedom, Canada is now more economically-free than the United States! Yes, Canada. Check out the top-10 most economically-free nations here.

According to the rankings, Canada beats the US in: “Business Freedom,” “Fiscal Freedom,” “Financial Freedom,” “Property Rights,” and “Corruption.” It will be interesting to see if Canada seizes upon its current momentum and moves towards additional reforms and whether the US is able to turn things around and move back toward “Economically Free” instead of falling further down to “Mostly Free.”

Sure, it’s radical, but this article makes a pretty good case that public employee unions are not really unions at all. Instead:

They’re collusive cartels that use campaign donations, organized get-out-the-vote onslaughts and sometimes physical threats to literally buy the acquiescence of those with whom they should be “negotiating”. The politicians are supposed to be working for we the taxpayer. But we the taxpayer have no seat at the table between the public employee unions and their political benefactors.

These unions are particularly strong in New Mexico, a state with a bloated government workforce. Of course, that strength in numbers makes the unions even more powerful and abusive of their power. How else would you explain AFSCME’s recent, illegal use of the state’s email system, to bash Republican gubernatorial candidate Susana Martinez even though she has not campaigned on reducing the government work force.

In Albuquerque, government employee unions, this time for the police, are also mounting a public relations campaign to avoid layoffs among their membership. While some conservatives think no amount of police is enough, I find it hard to believe that significant cost-savings cannot be found by cutting back — or extending the number of years that must be worked before cops can retire with a generous public pension.

Banning public employee unions is unlikely to happen, but there is no need for them and the public/policymakers need to understand this and make decisions accordingly.

In case you missed Friday’s 10pm newscast, the Rio Grande Foundation’s new study on higher education was the basis for a story on KRQE Channel 13.

Watch the full story here:

I am glad I don’t live in Santa Fe County. I’m not saying the rest of New Mexico’s government entities are much better — remember the famous anti-Wal Mart balloon landing site debacle in Albuquerque a few years back — but it is pretty amazing how badly the Commission got snookered on the recent $7 million land deal recently profiled by Channel 13’s Larry Barker.

The real problem, of course, began before the County decided to waste $7 million of taxpayers’ money in tough economic times. In fact, the County’s refusal to supply water to the area in order to allow the developer to actually make the land economically productive is nothing short of immoral and a brazen abuse of government power.

While government at all levels owns massive tracts of land — including nearly half of New Mexico –strict limits need to be placed on what governments can do in terms of putting land off limits, takings, and purchases. Otherwise, debacles like what the Santa Fe County Commission did (and Albuquerque’s City Council did before) will keep happening and taxpayers will keep taking it in the shorts, both in terms of wasted tax dollars and stalled economic development.

Tune in to 770 KKOB tonight from 7pm to 7:30pm to hear Scott Stiegler interview Deroy Murdock who will be speaking at our Friday “Lights of Liberty” luncheon. Tickets are still available!

Also, tune in to KIVA AM 1550 starting tomorrow to hear one-minute updates on various important policy issues.

Remember the silly Copenhagen Climate Conference last year? Perhaps you remember the impassioned plea of the Tuvalu delegate to the conference on behalf of radical restrictions on fossil fuels in order to stop the supposed destruction of his tiny island?

Well, it is all bunk. According to Earthweek: A Diary of the Planet which runs regularly in the Albuquerque Journal (and is available online), Pacific coral atolls, once feared to be disappearing due to rising sea levels, are about the same size or actually larger than they were 60 years ago.

It turns out that predictions that global warming would create rising seas that would inundate low-lying islands are just wrong. In fact, 43 percent of the islands remained stable in size while another 43 percent grew. Sounds like pretty dramatic expansion to me! Oh well, you know what Queen said “Another one bites the dust!”

Recently, Bob Samuels wrote on Inside Higher Ed that one way for colleges to close their budget holes would be to open their doors wider:

If public universities are really committed to promoting access, affordability, and quality, they should consider increasing their funding by accepting more undergraduate students instead of raising tuition and restricting enrollments. While many would argue that higher education institutions are already unable to deal with the students they currently enroll, in reality, it costs most public research universities very little to educate each additional student, and the main reason why institutions claim that they do not get enough money from state funds and student dollars is that they make the students and the state pay for activities that are not directly related to instruction and research.

The basic idea is that universities aren’t maxing out their revenue because they don’t let everyone who is willing to pay the tuition attend. From an economist’s perspective, this is a fascinating suggestion, but also puzzling: why would schools fail to maximize their revenue? Afterall, if by letting in some extra students they could further support research activities and all the other fun stuff, why wouldn’t they do this? Why shouldn’t they do this?

Samuels suggests that the universities are not eager to do this since they would have to come clean about the true marginal costs of educating those students:

…I believe the main reason is that universities do not want to admit to the public that student dollars and state funds are spent on other things than instruction and related research.

William Patrick Leonard, Rio Grande Foundation’s Higher Education Advisor, responding to Samuels, suggests that letting more students might solve the budget problem, but it doesn’t necessarily help the students:

Bob Samuels’ argument is clearly aligned with the American ideal, that a college education should be available to all. His argument is flawed and serves only to benefit his constituency. I am not an elitist. Higher education should be available to all who can benefit. The question is determining these additional students’ ability, and I might add the disposition, to benefit. The problem is that our metrics for accurately identifying students with the minimal ability to benefit are grossly inaccurate. In our egalitarian society, many institutions have already pushed the limits of the left tail of the normal distribution in their pursuit additional tuition revenue. Ultimately, institutions have two choices when it comes to increasing revenue, increase tuition or admit more students.

The cynic in me suggests that Samuels is offering a self-serving rationale to ward off a potential reduction in force among his constituents. The more students enrolled the more revenue is earned under the guise of a core national value. On the surface, the institutions will do good, by doing good. These additional students, however, will likely be drawn from normally distributed populations. I suspect that more applicants from the left trail rather than the right will be enrolled. As more less capable and ill disposed students are enrolled, our already dismal retention and completion rates will sink even lower. Tuition revenue may increase and delay staff cuts but at the expense of ill prepared or disposed students.

I don’t think it is simply a matter of more or fewer students. I think that Samuels is wrong that state universities could simply admit more people because of the non-uniformity of students ability levels, as Pat Leonard suggests. The value of the education, in so far as a degree is a signal to employers, varies depending on how many people possess it as a credential and what kind of students are holding it.

In New Mexico, we need more clarity about what the inputs and outputs of higher education are, and what strategy is likely to increase the total welfare of the state’s population and its economy. As Pat Leonard says, increasing the universities total funds is not in and of itself a proper goal of state policy. It is only a means to an end.

The above chart by Mercatus Center senior research fellow Veronique de Rugy uses data from the International Monetary Fund’s Cross-Country Fiscal Monitor to compare projected 2010 structural deficits across the G-20. These structural deficits reflect each nation’s long-term attitude toward deficit spending, with the effects of business cycle fluctuations removed. When taking into account entitlement and all other obligations, America’s structural deficit as a percentage of our GDP is far bigger than almost any other country’s; it is, in fact, worse than Greece’s.

The United States’ high level of structural deficit means that our level of debt is projected to grow into the future. This massive deficit reflects a baseline level of spending that is not feasible at current levels of taxation. Even if no new spending increases are enacted, we will still be required to borrow; in turn, this borrowing will continue to increase our level of debt.

The increasing level of debt, when coupled with the fact that our current debt has a far shorter maturity than that of most other countries, means that our country is spectacularly vulnerable if the market suddenly decides it doesn’t want U.S. debt. The short maturity of U.S. debt means that even if it the level of borrowing weren’t growing, we would still have to refinance large amounts of debt over very short periods of time. Any change in investors’ attitudes towards the riskiness of United States’ debt will cause our costs of maintaining debt to skyrocket. Throughout the financial crisis, investors have viewed U.S. debt as a relatively safe asset; it doesn’t mean that things won’t change.

Investors judge default risks on a curve. They will assess one government’s risk against other’s (for instance, the United States vs. France, Germany, China, and Norway). When the markets do lose confidence in a government’s fiscal rectitude relative to others, a crisis can arise quite quickly, forcing countries into painful political decisions. And this could very well happen to the United States.

Learn about our dangerous cycle of deficit. If you want to make a difference, take part in the upcoming America Speaks townhall meeting in Albuquerque.

Today’s Albuquerque Journal included an excellent article by Bloomberg writer Joe Mysak on the major problems facing underfunded public pensions. The Rio Grande Foundation has done some work on the issue of underfunded pensions in New Mexico including this policy paper.

The paper on pensions cited in the opinion piece can be found here. The simple truth is that the problem can either be resolved through political leadership while there is still time or in the form of an ugly budget crisis as we are seeing in Greece.

I have been in Chicago over the past several days for meetings and training provided by the Franklin Center for Government and Public Integrity.  Part of the training included lectures on detecting and fighting public corruption.  The speakers were a former IRS criminal investigator (think a CPA with a Glock) and a former high-level FBI agent.  I came away with several ideas and specific suggestions for tackling New Mexico’s corruption epidemic.  You can read the essay over at New Mexico Watchdog.

Colordao’s Legislature (over the strident opposition of teachers’ unions), has passed legislation that, in the words of this article from the Associated Press:

Requires teachers to be evaluated annually, with at least half of their rating based on whether their students progressed during the school year. Beginning teachers will have to show they’ve boosted student achievement for three straight years to earn tenure.

Teachers could lose tenure if their students don’t show progress for two consecutive years. Under the old system, teachers simply had to work for three years to gain tenure, the typical wait around the country.

Colorado took initiative, in part, to put itself in position to receive funding under the Obama administration’s Race to the Top competition, a $4.35 billion pot of stimulus money designed to prod just such changes.

Unfortunately, teachers won’t be at risk of losing tenure until 2015 because lawmakers slowed down the process under political pressure from the teachers’ union. Teachers can appeal dismissal all the way to the state Supreme Court, and school districts have the burden of proving why they should be terminated.

Heaven forbid that teachers who we rely on to educate the next generation be held to the same standards as an average office worker in terms of performance evaluation. Nonetheless, it is a step forward for Colorado and should be an example for New Mexico if our next Governor is serious about turning New Mexico around.

I am not a democrat. That’s small “d,” not big “D.” Why? Simply put, I don’t believe in the effectiveness of majority rule institutions. The Founding Fathers were also skeptical of majority rule. That is why we have the First Amendment to protect minority/unpopular speech.

All of that said, I can at least respect self-professed “democrats” if they are intellectually honest. Unfortunately, our “Democrats” are proving that they are more than willing to undermine democracy when it suits their interests. For starters, in Congress, Democrats seem unwilling to vote in favor of an economically-damaging “cap and trade” scheme, but a vast majority of them (including Sens. Bingaman and Udall) want the Environmental Protection Agency to enact restrictions using the Agency’s regulatory powers.

Gov. Richardson has followed his Democratic colleagues in Washington in abandoning democracy, but in even more dramatic fashion. The issue is again “cap and trade.” In a recent article by Michael Coleman of the Albuquerque Journal. Richardson made a very telling statement when Coleman asked the governor how his preferred policies can be done in a contentious political environment, when skeptics doubt the existence of climate change and fear economic effects of mitigation.

Richardson suggested working around the skeptics. “You move without them,” he said. “My main appeal is for the states to take a leadership role and not wait on the federal government.”

Richardson is doing exactly this by avoiding democracy in the form of the Legislature in favor of the Environmental Improvement Board which is filled with his appointees, and, due to a judge’s recent decision, can move forward on enacting a very strict carbon cap here in New Mexico.

Principles mean very little in politics these days, but it would seem that the supporters of a party calling itself “Democrats” might support their party’s founding principle even if it flies in the face of their perceived self-interest. Hopefully this happen, but I’m not holding my breath.

So much has been written on the oil spill in the Gulf of Mexico. It is indeed a tragedy of monumental proportions and it has given environmentalists and those who seem to despise human economic progress a convenient issue to hammer with on the issues of global warming and pollution, not to mention capitalism in general.

But, as columnist Jeff Jacoby writes, despite the spill, life without oil would be even more tragic than the spill now polluting the gulf.

As Jacoby summarizes:

Of course there are problems created by oil, as the Deepwater Horizon calamity so heartbreakingly demonstrates. But most things of great value come with downsides. There are 40,000 traffic fatalities in the United States each year, but no rational person suggests doing away with cars, trucks, and highways. Airplanes sometimes crash and boats sometimes sink, but air and sea travel are not derided as “addictions’’ we need to break. Deaths due to hospital infections, medication errors, or unnecessary surgery number in the scores of thousands annually, but who would recommend an end to medical care?

I recently emailed Rep. Heinrich about the second engine for the F-35 jet engine. Like so many people who write their members of Congress, I used a third-party organization. In this case, the group was Citizens Against Government Waste. But that is all just back-story, what is really important is the response (or lack thereof) from Heinrich’s office.

The letter I got (mailed back) from Heinrich’s office can be found here. In the letter, Heinrich — more likely an intern or low-level staffer — acknowledges the issue I wrote in about, but that’s about it. He doesn’t mention how the Congressman voted, offer any additional information about the issue, or offer any other insights. He simply complains about his workload and admonishes me to contact him through his web page. I worked on the Hill, I know that these letters are “canned,” but these people still represent us. Shouldn’t they cater to our desires, not the other way around? If nothing else, these letters are a great opportunity for Heinrich to help educate his constituents on the issue of at least present his views on the topic.

This is not the first time Heinrich has sent back a letter admonishing me to use his website rather than a third-party site.

Contrast that with Sen. Udall’s lengthy and informative letter I just received (yes, I write these guys regularly and you should too) on the financial reform bill that just passed Congress. Udall’s office emailed me (hey, I’m already online, it’s okay to email, plus it saves taxpayers money) a 13 paragraph, highly-detailed response which even included information on how he voted on various amendments to the bill.

Based on constituent services, it would seem that Udall is the one running for office this November, not Heinrich.

I have been asking over and over again whether New Mexico’s higher education institutions are providing as great a return as they could. I have mostly focused my criticism on the unexplained differences between various schools’ costs per student, implying different policies in school administration might lead to greater efficiency. Another important consideration for the well-being of state’s economy is what the students are learning (and what they are not learning).

We could divide learning into ideas that are personally useful and ideas that societally useful. The first kind directly helps a person operate most effectively in life and business — to correctly apprehend the reality around herself and to make choices according to the most reasonable theory she knows. The second kind contributes to better (worse) democratic outcomes as the wisdom (lack of wisdom) are meshed together. In both cases, if many people have foolish ideas, then society as a whole will be less wealthy, as many mistakes are made in business and government.

It seems reasonable to hope that state-subsidized institutions support wisdom and not foolishness. But, there is evidence that this isn’t the case.

Zogby International researcher Zeljka Buturovic and George Mason University economist Dan Klein recently co-authored a paper in Econ Journal Watch that indicated that college students don’t do any better than the uneducated in answering questions about basic economics. George Leef at the Pope Center discusses some of the explanations for this phenomenon, including:

The most persuasive explanation is the one they offer last: Few students are exposed to economic thinking in their college coursework. Courses in the principles of economics are rarely required and even when students do take such courses, it is by no means certain that the professors will teach them in a way that causes students to grasp such lessons as “price controls cause shortages.” Many economics professors are registered Democrats and are comfortable with government intervention in markets.

The questions are all about the basic economic verities that markets and trade have produced and continue to produce a great amount of wealth for society, and that restrictions on market activity often have negative side effects. Certainly, we would expect to see quibbling with some of the language of the questions, but some of the questions have clear answers, so anyone who gets them wrong is really misled in his thinking. See the two columns for college-attendees and graduates in Table 1 on page 183 (a pdf of that page is here).

Missing one or two of the questions could be due to misinterpreting the wording of the questions, but the large blocks of mistaken answers point to a misunderstanding of price theory and markets. How can 1/3 of college graduates believe that the standard of living is not any higher today than it was 30 years ago? Not knowing GDP growth has been dramatic is like not knowing about the Cold War. Isn’t this one of those things an “educated” person ought to know? Meanwhile, the questions about rent control and minimum wage illustrate students’ non-understanding of the effects of price ceilings and price floors. Such students would probably agree with the proposition that the government can make people’s lives easier simply by changing prices on a spreadsheet. Gee, why can’t we fix prices all the time to make everyone richer?

In thinking about the role of universities in preparing a new generation of leaders to guide society, it is depressing to consider that many of these individuals have not learned the basic tools of economic logic and some elementary facts about our society’s wealth creation processes. Economics has important lessons about structuring incentives and designing institutions to motivate individuals towards cooperative, productive behavior. It is no surprise that in the absence of this learning we see spending policies that lead to pernicious budget deficits even as the heavily funded programs don’t work.

A worse version of this story could be that colleges not only fail to teach economic verities, but actually work against a clear understanding by filling students’ heads with confused prattle about social democracy and other anti-capitalist ideological fetishes. In doing so, the schools are effectively undermining society’s ability to create wealth — a wealth that supports the operation of the academy. I ask, to what degree are New Mexico’s budget problems today, directly linked to a failure of certain college-educated citizens to apprehend basic economics?