To you and yours, enjoy the tidings of the season. And, enjoy this from the Mises Institute about Christmas movies and bad economics.

Tom Molitor writes over at NMPolitics.net about the urgent need to end earmarks in Congress.

My family is planning to head up to Santa Fe (from Albuquerque) to witness the Inauguration ceremony of Governor Martinez which is scheduled for the Plaza in Santa Fe at 10am on January 1. We might stick around for lunch and check out one of the museums in town.

Figuring that parking and traffic would be a zoo, I decided to check out the Rail Runner schedule to see if it would get us there by 10am. This would be impossible on a typical weekend and even on a weekday we’d have to board a 7:23 am train to get to Santa Fe in time for the event, but I figured that traffic and parking might make it worthwhile. But then I looked at the Holiday Schedule and saw “NO SERVICE.” on January 1.

Needless to say, I am stunned. I realize it is different, but when President Obama was inaugurated in January, 2009, Washington’s Metro Rail system had its heaviest traffic ever. Obviously, even on a heavy traffic day, taxpayers are still subsidizing each and every trip on the RailRunner, so I guess in a way I’m pleased with their fiscal restraint, but if you can’t use the train on what is bound to be a busy day of travel between Albuquerque and Santa Fe, then what’s the point of having the train in the first place?

(Albuquerque) Governor-Elect Martinez faces a multitude of problems when she takes over from Bill Richardson, not the least of which is New Mexico’s struggling educational system.

Said Rio Grande Foundation President Paul Gessing, “Martinez’s pick of Hanna Skandera, who served as the deputy commissioner of education under Governor Jeb Bush, to head the PED, is a strong indicator that the successful reforms Florida enacted under Bush over the past 10 years will be emphasized under the Martinez Administration.”

“The fact that Martinez has named a strong reformer with ties to Jeb Bush is a good sign for New Mexico children and parents who are stuck in failing schools, yet face an ever-more competitive global economy,” continued Gessing.

The Rio Grande Foundation has been a leading proponent of education reform in New Mexico and brought the “Florida Model” to New Mexico during a series of events during the summer of 2010 and a policy paper entitled “Florida’s K-12 Lesson for New Mexico.”

As Gessing noted, “Florida’s students have seen dramatic improvements on tests like the National Assessment of Educational Progress (NAEP). Back in 1998, before Bush’s reforms, New Mexico 4th graders performed at about the same level as Florida’s 4th graders on the reading portion of the test. As of the most recent NAEP test, Florida’s 4th graders outperform New Mexico’s by approximately two grade levels.”

“Florida’s Hispanics,” noted Gessing, “have seen particularly dramatic improvement with poor Hispanic 4th graders seeing the equivalent of three grade levels of improvement on the NAEP from 1998 to 2009. In fact, poor Hispanics in Florida now outperform New Mexico’s general student population.”

“New Mexico faces a long way to go just to bring student performance up to even the national average, but Martinez’s pick of Hanna Skandera to head up PED shows that she is serious about making needed reforms to our K-12 system. This is an early Christmas present to New Mexico parents and students.” concluded Gessing.

The US health care system certainly has its problems. It is expensive, fragmented, and contains within it a multiplicity of perverse incentives and misguided policies. It is NOT capitalistic at all with more than 50% of health care expenses paid directly by governments and only 1 of every 8 health care dollars paid directly out of pocket (there is usually a middle-man).

Nonetheless, as a recent report from the respected RAND Corporation points out, Older Americans are not as healthy as their English counterparts (due to lifestyle), yet they live as long or longer. While RAND doesn’t come out and say it, the difference seems obvious: the US health care system still has capitalist, free market impulses while the English system is totally socialized.

While ObamaCare does not move us completely to the English model, it does move us dramatically towards greater government control. Hopefully ObamaCare is either repealed or overturned and we don’t have to find out if American seniors’ life-spans are shortened under the new, more socialist ObamaCare model.

I enjoyed the article in this morning’s Albuquerque Journal on the students at the Southwest Learning Center who are learning to fly through their charter high school. First and foremost, good luck getting this kind of innovative learning opportunity through a traditional charters school. But that isn’t why I liked the article so much.

Buried in the article was a nugget that explained so much of what is wrong with American education (and what is right about this particular charter school). The relevant information is:

Students pay an additional $50 per hour for flight time, which covers most of the cost of instructors.

Greg Roark, director of the schools’ aviation program, said the steep cost to families encourages students to take the program seriously and to work hard.

“There’s value in them paying, because there’s a lesson to be learned that this costs money,” Roark said.

What a novel idea! Students and their families take education more seriously if they have some skin in the game. Having an obvious, direct financial interest in one’s own education would solve many of the major problems we face. Tax credits and other “choice” mechanisms moves the debate in this direction, but our state constitution makes a major shift in this direction difficult.

Most of the focus on the recent federal tax deal centers around the need to extend the Bush tax cuts. This posting focuses on the unemployment extension for 13 months starting January 1, 2011. It would seem that Obama is trying to keep the nation’s unemployment rate elevated well into his re-election campaign. This is one instance of bad economics and bad politics being one and the same.

After all, in spite of the financial crash, in spite of Obama’s (and Bush’s) over-spending, and in spite of our nation’s horrible financial condition, the economy is bound to start growing and thus creating jobs over the next year. Obama’s unemployment extension (some will now have gone more than 3 years without working and yet receiving unemployment under this compromise) would seem to be a great way to keep the unemployment rate well over 9.0% (it is now at 9.8%) well into his bid for re-election in 2014. Is this really what he wants?

Rather than a blanket extension of unemployment, Obama (and Congress) could have added requirements that workers pay back some portion of their “unemployment insurance” once they find work, but no such requirement seemed to receive serious consideration.

There has been so much going on that I have seen several interesting and important articles that I simply haven’t had the time or space to discuss in this space. One of those excellent articles comes from Greg Jorgensen a Rio Rancho-based dentist. Jorgensen poo-poos the notion that New Mexico needs to spend $30 million to start and $6 million annually to subsidize a dental school.

Jorgensen makes several salient points, but the basic idea is that the market should be allowed to work. Rather than simply supplying more dentists through a heavily-subsidized dental school, if there is a demand for dentists, prices will rise and more dentists will come to New Mexico to ply their trade. This makes complete sense to me. In fact, the same concept needs to be applied to our higher-education system as a whole. Despite a $400 million deficit, taxpayers continue to funnel money into higher ed with little or no discussion of what exactly the public at large is receiving for that massive investment.

Kudos to everyone from Diane Denish to Sen. Sander Rue, New Mexico’s Department of Information Technology, and the Albuquerque-based RealTimeSites which actually created the site. New Mexico’s Sunshine Portal is now live (6 months ahead of schedule). When’s the last time you heard that about New Mexico government?

Anyway, there is a trove of interesting information. Just one nugget I found is that five staffers in the Office of the Governor make more money on an annual basis than does the Governor: Brian Condit (Cos), Janis Hartley (Deputy Cos), Eric Witt (Deputy CoS), Gilbert Gallegos (Deputy CoS), and Daniela Glick (Special Director).

As far as I’ve seen, The Sunshine Portal is one of the best in the nation. I hope it generates a lot of heat on the political class by shedding some light on state budgets. That said, it needs to be expanded. Let’s start with adding the public schools to the portal!

Recently, RGF and our work has been the target of a few opinion writers on the pages of the Las Cruces Sun-News. The articles by Michael Hayes and Gerry Bradley are here and here respectively.

I responded in an effort to clear up some of the misperceptions of what the Rio Grande Foundation does and what policies we are advocating with an article in the Sun-News here.

The Rio Grande Foundation has joined a national group of conservative leaders including Newt Gingrich, Ed Meese, and Grover Norquist to work together to solve crime and criminal justice issues in the United States. A mission statement from the group can be found here.

The site which can be accessed here is full of ideas on ways to make our cities and homes safer, while saving taxpayers money. The Rio Grande Foundation has previously put out some recommendations relating to criminal justice reform.

President Obama made a Clintonian lurch to the Republican side when he agreed to extend nearly all of the Bush tax cuts. But what to make of the deal?

In the sense that Obama has exhibited a willingness to abandon the left on tax matters, this is good news for his presidency and for the US as a whole. One might think that I’d be a huge fan of the agreement.

You’d be wrong. I strongly believe — and the data back me up on this — that out-of-control spending is the main problem facing our nation. I’d rather have seen Republicans in Congress have abandoned the tax cuts in favor of serious spending restraint. Instead, Obama has successfully used the tax cuts to keep spending.

The tax deal certainly makes future spending restraint more politically-difficult as Democrats and large swaths of the population will view the Republicans as hypocrites on closing the deficit (they are, but not because of the tax cuts, they are hypocrites because they have not been serious about slashing spending). The Democrats are the really sad case here, however. As columnist Jeff Jacoby notes, the left’s extreme reaction to extension of “tax cuts for the rich” clearly illustrates their reliance on the politics of envy and their basic misunderstanding of money and property rights.

If I were in Congress, I’d hold my nose and vote for the deal, but I’d be darn sure that Congress tightened the reigns on spending and did so immediately.

Update: interesting points made counter the agreement by Charles Krauthammer who I don’t always agree with.

Recently, a federal judge in Virginia struck down portions of federal ObamaCare legislation. This is a good first step, but there are multiple suits and the fight will continue — probably all the way to the Supreme Court.

As Tom Molitor writes over at NMPolitics, there are many reasons for incoming New Mexico Governor Susana Martinez to add New Mexico to the list of states suing the federal government.

While my Grandparents on my mom’s side moved to New Mexico after World War II and my mom went to Pius (when it was on the East Side of Albuquerque), my father’s side of the family was from Cincinnati. That’s where I grew up. I actually grew up in Reading, OH in the same town as new House Speaker John Boehner. We also went to the same high school, the Catholic Moeller High.

All this relates to a 60 Minutes interview of Speaker Boehner that aired yesterday which included a discussion of his upbringing and life in Reading. I wish Boehner was a stronger advocate for limited government, but hopefully he is willing to make the tough (and often unpopular) decisions necessary to get America back on the right track. Check out the interview here:

Last week on New Mexico In Focus, I appeared on the panel of experts (which included former Rep. Dan Foley). Check out the video below and see if you agree with the issues and how they were discussed:

Watch the full episode. See more New Mexico In Focus.

Other states are waking up to the fact that film subsidies simply don’t bring in enough jobs and revenues to justify the massive expenditures of taxpayer dollars. According to this article from Businessweek:

Kansas and New Jersey have suspended their tax credits. Rhode Island has capped subsidies at $15 million annually, and Wisconsin’s are set at a measly $500,000 a year. Arizona’s program is set to expire on Dec. 31. Larry Brownell, head of the Association of Film Commissioners International, which represents 41 of the 42 states offering credits, predicts half the states will shelve their programs within a decade.

Given our $400 million deficit, it would seem that it is high time for New Mexico to at least cap its film program.

There has been a lot of talk around town about the football coaches at La Cueva, HS who have been disciplined for allowing some members of the La Cueva football to drink on a team bus come back from a state-playoff game. Whether this was a mere oversight or a purposeful decision is unknown at this time.

In the private sector, the coaches might be put on unpaid leave while the matter is investigated and would be fired if the allegations prove to be true. In this case, the coaches have been placed on paid leave and transferred.

Now, I’m not sure how transferring a “problem” teacher or coach makes any sense, but it is being reported that the Albuquerque Federation of Teachers has filed a complaint against APS on this point. Does the union oppose ANY sanctions against the coaches or just the transfer? If the coaches are found to have been neglectful in this case, will the teacher stand in the way of the firing of these coaches?

Unions CAN play a valuable role in society by representing the interests of their members, but it would certainly seem that these coaches — with their paid administrative leave — are getting a pretty good deal.

UPDATE: Is the leave for these coaches paid or unpaid? In an article in Saturday’s Journal Hailey Heinz states that it was unpaid leave. The Channel 13 article says it is paid….will get to the bottom of this.

UPDATE 2: I have confirmed with Heinz that indeed the coaches are on unpaid leave. I actually agree with the union that transferring “troubled” employees is not wise, so I guess that is that!

In case you haven’t heard already, the City of Rio Rancho has finally given up on its Green2V venture/debacle.

Our own Jim Scarantino (formerly of New Mexico Watchdog) had blown the whistle on Green2V months ago, so I am glad to see Rio Rancho finally catching up to reality. Scarantino had uncovered the fact that Green2V was not a viable enterprise and that Rio Rancho would be wasting taxpayers money be offering incentives for the “company” to set up shop in the so-called “The City of Vision.”

No word on whether Jim has received so much as a basket of fruit from the City. It’s the least they can do considering how much he saved them.

You have more than likely heard reports about the Transportation Security Administration’s (TSA) controversial procedures at the Nation’s airports. The sad truth is that without Congressional action or internal decisions by TSA, the new “backscatter” machines and gropes at the security line will not go away anytime soon.

But that doesn’t mean that we can’t do anything to improve airline security and Councilor Lewis should be commended for his new legislation R-172 and Albuquerque voters and taxpayers should express their support to their City Councilors via email or at the upcoming Council meeting on December 20.

Why? Although procedures would not be changed immediately, if Lewis’s measure to opt the Sunport out of TSA and hire private screeners is adopted, the Sunport’s security would likely be improved. That’s because TSA, as transportation analyst Bob Poole writes:

TSA is both the provider of airport screening and the regulator of all aspects of aviation security. TSA regulates itself and has hidden its mistakes in the past. It suppressed a report in 2007 showing that private security companies were at least as effective as TSA screeners and that if more careful accounting were done, were probably less costly, too. TSA never released that report, but the Government Accountability Office blew the whistle on TSA’s attempted coverup.

TSA has a monopoly over regulation and a near-monopoly in terms of actual security provision, how effective and efficient (not to mean customer-friendly) are monopolies? Nonetheless, a dozen or so airports across the nation have opted out of TSA including Kansas City and San Francisco, so this is not uncharted territory. While immediate cost savings are unlikely because TSA dictates the wage scale even under the “private” model, costs will certainly not go up.

Lastly, opting out of TSA will send a message to TSA that the citizens of Albuquerque are not pleased with the “service” being provided and that Congress needs to reform TSA or abolish it entirely and allow the airlines and airports manage security themselves. Lewis’s effort is not radical and it won’t solve our problems right away, but it is a big step in the right direction. Drop your Councilor a line and let them know what you think.

Recently, the Rio Grande Foundation published this report detailing several specific, significant spending cuts that could help Governor-Elect Martinez and the Legislature close the budget deficit (currently estimated to be $400 million). Now we need your help!

Take this quick survey which will allow you to choose the cuts you’d prefer to see and preserve the programs you feel are worthwhile. We will make the final results of this survey available on our website when the results are in (after the New Year). We will also submit the results to the incoming Martinez Administration.

Take the survey and pass the survey link along to your friends and other contacts!

This useful chart illustrates how federal spending and taxing levels have varied over the last few decades.

Clearly, federal spending has risen dramatically in recent years, while the economy has hit tax revenues. The chart is taken from an article written by Veronique de Rugy at the Mercatus Center who puts a few big-picture ideas on the table for balancing the budget.

As de Rugy notes “Since Bill Clinton left the White House in 2001, total federal spending has increased by a massive 60 percent in inflation-adjusted 2010 dollars. In fiscal year 2010, which ended September 30, the federal government spent $3.6 trillion, or 25 percent of Gross Domestic Product. That’s the most spending, in terms of percentage of GDP, since 1946. Likewise, last year’s $1.5 trillion deficit, as a percentage of GDP, was the largest deficit since 1945.”

Most people didn’t think the federal government was “too small” when Clinton left office. It would seem that some tough decisions on spending should be all that we need to eliminate the deficit and that significant tax hikes as outlined in the federal debt commission would be unnecessary if Congress and the White House get serious about cutting the federal budget down to size.

It was known by those “in the know” at the time of purchase, but with a front page report in Sunday’s Albuquerque Journal, it became public knowledge that New Mexico taxpayers are on the hook for a lot more than they bargained for with the Rail Runner. With track being purchased that may never be used and annual maintenance costs in the millions of dollars annually, we are being RailRoaded. Read more on this sordid story from Rob Nikolewski at Capitol Report New Mexico.

I love it when our friends on the left feel threatened (now is one of those times). In flush economic times, our friends on the left support massive spending for the Rail Runner, Spaceport, and unlimited expansion and zero accountability for wasteful and incompetent programs like K-12 education, film subsidies, and Medicaid. When the economy turns south and fiscal conservatives like the Rio Grande Foundation (and elected officials) start looking for cuts, suddenly it would appear that all government does is provide roads and fire departments.

For a little detail on this, check out our recent opinion piece and the response from Gerry Bradley of Voices for Children. Bradley and his allies on the left seem to think that we at the Rio Grande Foundation simply hate government and want to abolish roads and fire departments. This is simply not the case and, if government limited itself to “the basics,” we’d be the happiest people around.

Unfortunately, government does way too much and diverts resources away from the basics. As you can see from this document, roads and highways form a small fraction of the state’s budget.

Bradley also fails to see that in the absence of a government role, the private sector would probably provide infrastructure that is far more focused and well-maintained than what the government provides. In Europe, for example, where gas taxes and gas prices are much higher than they are here — and are not dedicated to roads — toll roads are the norm.

The fact is that our society (both New Mexico and nationally) is simply not able to pay the bills for government at the size it is now. Cuts are needed. Ideally, politicians will cut the fat and leave the bones and core functions of government intact.

How do I know someone is either lying or doesn’t understand basic economics? There are a lot of ways to do it, but use of the term “multiplier effect,” particularly when associated with government spending, is one of the best ways to root out economic ignoramuses and liars. For more details on why the “multipler” doesn’t work, check out this excellent article on the Obama “stimulus.”

So, it was no surprise that half-way through an opinion piece in this morning’s Albuquerque Journal, the author (who defended the film industry and its subsidies), cited a mysterious three to one multiplier.

Then there is the issue of extending federal unemployment benefits — an issue that Congressional Republicans seem willing to capitulate on in order to continue the Bush-era tax cuts. Some seemingly credible economists claim that extending such benefits has a “multiplier effect.” Of course, the only “multipler” I’ve seen from expanding unemployment benefits is that we have multiplied the number of folks who have been unemployed for more than a year. It also multiplies the deficits of state unemployment funds.

How do we know that the multiplier effect is bogus? Economics is about creating wealth with limited resources. The use of government force to take resources from one person or group to another person or group does not confer upon that money any greater power than it had before. In fact, as humans, we have a proven track record of caring less about things that we don’t deserve and receive through inappropriate means than we do about what we have worked hard to gain ourselves.

In the meantime, keep your eyes out for the mythical “multiplier.”