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.

Politicians like Bill Richardson usually view “economic development” as the practice of taxing the rest of us in order to provide incentives and direct payouts to favored industries like solar and film. As Joe Bast at the Heartland Institute writes in this excellent article, real economic development means providing certain economic conditions that are favorable to ALL industries that might wish to locate in a particular place, not just those that have the best lobbyists or are the most sympathetic or even “cool.”

So, what does Bast recommend (more information on each is contained in the article itself)?

1. Keep total tax burden low.

2. Keep taxes on businesses low.

3. Avoid corporate welfare.

4. Remove privileges enjoyed by labor unions.

5. Lower minimum wages.

6. Reduce workers compensation costs.

7. Keep housing affordable.

8. Reduce the burden of regulations.

9. Discourage lawsuit abuse.

10. Attract members of the creative class.

Last night, Channel 7, KOAT, reported on our efforts to obtain public payroll and vendor information from various school districts. The well-done story is available here.

The truth is, you would probably be a millionaire right now if it weren’t for the government. Instead, all Americans are struggling under the ever-increasing burdens of taxes and government regulations. Our friends at the Independent Institute have put together a website that attempts to calculate for each person, based on detailed (but anonymous information) exactly how much government is costing you.

The site is interesting and informative. It can be found here.

I happened to be watching the local news last night when a story ran about the ongoing scheduling debacle at Rio Grande High. It has been more than two weeks since the APS school year started and the school doesn’t even have student schedules worked out.

Heading into the first commercial break was this lovely ad from Diane Denish:

Apparently, the fact that hundreds of students have wasted more than two weeks of school due to an entirely avoidable blunder is a clear indicator to Denish that we should make sure that “no resources should be diverted” from these failing government-run schools. Heaven forbid that these kids receive a voucher or “opportunity scholarship” that gets them out of this failing school, but that might involve diverting some resources from the clearly-incompetent folks at Rio Grande High.

If we were talking about her kids, Denish would use her personal wealth to pull her own kids out of a failing school, but not everyone has her resources. So those kids remain trapped, waiting for the bureaucrats to get a schedule together.

An astonishing $7.1 billion was lost nationwide during 2009 in unemployment benefits fraud. Our Capitol Reporter, Rob Nikolewski found the story, followed up on it, and has found that New Mexico ranks third in the nation in terms of percentage of unemployment overpayments, with some 28.68 percent ($97.8 million) of the total benefits sent to New Mexico unemployment recipients should not have been delivered. Only Louisiana and Indiana had a worse percentage.

The full story from Capitol Report New Mexico can be found here.

Today saw the unveiling of Albuquerque’s $7 million stimulus-funded bike bridge over the Rio Grande. Being a West-Sider and something of a bike enthusiast myself (although I have been and remain a critic of the bridge), I decided to ride over to witness the ceremony.

Aside from the cost, one big problem with the bridge is that the trail to it ends in a Wal Mart parking lot:

Of course, if you are riding the trail along the river and get hungry, there is also a Chili’s: Considering that those two establishments are the most likely to gain from the trail, I wonder if they put up any money? I doubt it.

As I said, I rode my bike over, but as the photos below illustrate, plenty of folks drove to the illustrious occasion: Some of them blatantly disregarded “No Parking” signage:

Dignitaries in attendance included Rep. Heinrich who clearly did not ride his bike over, Mayor Berry, Councilors Dan Lewis, O’Malley, and Benton (he did ride his bike), and former Gov. and Stimulus “Czar” Toney Anaya. Most discussed the wonders of the new bridge and the quality of life aspects of it and how wonderful it is for the City. I don’t blame our Councilors for this as it is largely stimulus money that funded the project.

But, one thing did catch my eye and that was some of the run-down mobile homes at the bottom of the bridge like this one:

I have to say that I think that folks like those living in this trailer could have used the $7 million dollars more than the wealthy yuppies who will benefit in some small way from this expensive new bridge (you can get to the Bosque Trail from the Montaño Bridge Bike Trail already). Oh well, such are the economics of our federal government’s failed “stimulus” policies.

With Albuquerque Mayor Richard Berry having recently announced the City’s transparency site, ABQ View, transparency in government has taken center-stage. We at the Rio Grande Foundation share concerns about open government and transparency and are pleased to launch NewMexicoSpending.com. The site includes payroll data and vendor transactions from several of New Mexico’s school districts. Unfortunately, some school districts like APS, Santa Fe, and Las Cruces were less than cooperative.

More information on the site can be found here.

Like, the US-based Heritage Foundation does its annual Index of Economic Freedom (Canada ranks higher than the US nowadays), the Canada-based Fraser Institute — a free market think tank based north of the border — ranks economic freedom of the states and provinces of North America.

Not surprisingly, New Mexico performs rather poorly on this index being tied for 47th out of 60 jurisdictions studied (see the chart on page 2). This ranking leaves New Mexico economically freer than only the US states of Montana, Maine, Mississippi, and West Virginia and most Canadian provinces except for Alberta.

What nearby states perform very well? Not surprisingly, Colorado and Texas rank highly. Utah and Nevada also perform well, but all states in the region significantly outperform our own.

It seems that other Albuquerque leaders are finally speaking out in opposition to the idiotic idea of wasting $400 million tax dollars (or more once cost overruns are factored in) on a convention center expansion. I’ve written about it before here and more recently here, but this week saw hotelier Jim Long call the project “an economic albatross” among other unkind things.

Then there was this excellent opinion piece in today’s paper by former Councilman Pete Dinelli. Dinelli recounted from firsthand experience how proponents over-promise and under-deliver with these projects. They’ve done it in Albuquerque and I didn’t even know taxpayers had a stake in a downtown hotel already. Also, it is interesting that Dinelli points to past “urban renewal” projects as having destroyed downtown’s character, thus putting us in the spot we are in today. No surprise there as this has been a recurring theme across the nation: high-minded politicians and politically-connected businesses guide development to conform to some plan and things flop on a magnificent scale.

I do have one quibble with Dinelli’s proposed solutions. While Albuquerque has great amenities for a city of its size, what truly needs to happen to make downtown Albuquerque a destination is for those office buildings to be filled with workers (private sector ones ideally). That is what fuels everything else when it comes to downtown development. I realize the national economy is down right now, but the fact is that downtown wasn’t destroyed overnight and it won’t be rebuilt overnight. We need economic and regulatory policies that will bring thriving businesses (and their financial and human resources) to Albuquerque. Until then, forget being a national or international destination.

Yesterday, I urged voters to get Congressional candidates on the record in favor of appealing ObamaCare. Well (thanks to the Mullins campaign for this), it turns out that the good folks at the Club for Growth have already been doing this.

They have a website set up which displays the names of candidates for Congress that have pledged to vote to repeal ObamaCare. First and foremost, kudos to the Club for Growth for doing this important work. Secondly, I was very pleased to see that all three Republicans running for the House in November have signed on with the Club in support of repeal. This is great news and an indicator that this crop of Republican House candidates is serious about limited government.

Now, how about it Rep. Teague? You voted against ObamaCare twice. Were those just political votes or do you actually oppose the federal health care takeover? If so, how about signing the repeal pledge?

Repeal of ObamaCare won’t happen as long as Obama is President, but that doesn’t mean that it can’t be repealed when he’s gone and that opponents shouldn’t actively push repeal while Obama is still in office.

Currently, the legislative vehicle for repeal is H.R. 4972: Rep. Steve King (R-Iowa) is gathering signatures on a discharge petition that would force a vote on his bill, HR 4972.

H.R. 4972 currently offers the most practical solution to repeal Obamacare. At only 40 words, the language is simple:

“Effective as of the enactment of the Patient Protection and Affordable Care Act, such Act is repealed, and the provisions of law amended or repealed by such Act are restored or revived as if such Act had not been enacted.”

The discharge petition: 170 signatures and counting

As Rep. King notes on his website:

“Efforts to repeal the deeply unpopular Obamacare bill continue to gather momentum. We now have 170 members of the House of Representatives on record calling for full repeal of Obamacare, including Republican Leader Boehner, Republican Whip Cantor and GOP Conference Chairman Pence. I expect these numbers to continue to swell.”

Repealing Obamacare and replacing it with common-sense health reforms that improve health and healthcare delivery, increase access through lowering costs, protect life-saving medical innovations, dramatically reduce healthcare fraud and making effective use of health information technology is the real reform we need.

So, the question is: “Will Tom Mullins, Jon Barela, Steve Pearce, and Rep. Teague who voted against the bill twice in the House, pledge to vote to repeal ObamaCare? Conservatives and other opponents of the federal health care takeover have the most power they are going to have right now. Once candidates turn to Representatives, the pressure will be on from lobbyists to keep the status quo.

If I hear directly from the candidates on this issue, I will post the results here.

Mayor Berry’s Administration has released the city’s new transparency website. This is a great step forward for Albuquerque and Berry deserves praise for getting it done (I know it has been a long push). We have worked with the Mayor’s office and made suggestions and we are pleased to see so many good ideas implemented into the City’s site. But don’t take our word for it, take the word of the transparency experts over at Sunshine Review.

According to the folks at Sunshine Review:

This city website is out-performing most government websites in the US for proactive disclosure of information. In fact, very few local governments have made the effort to be that transparent, and in such detail.
You want it, this site has it. Credit card receipts, lobbying expenditures, campaign contributions, audits, contracts, employee salaries—everything. This website literally achieved not just every mark on Sunshine Review’s transparency checklist, but also nailed all our suggested data as well. Data is even downloadable in different formats.

Again, great job Mr. Mayor. I wish all government entities were as willing to open up to public scrutiny.

Economics, unlike physics or chemistry, is not a “hard” science. In other words, the results are open to a great deal of interpretation. This is largely because economics deals with humans, the long-term actions of which are difficult to re-create in controlled experiments.

Economist Scott Moody who has done a great deal of work for the Rio Grande Foundation on government pensions and other issues, but some research he’s done comparing the economic histories of Maine and New Hampshire shows the power of leaving money in the pockets of ordinary citizens instead of government bureaucrats. New Hampshire lacks both a personal income tax and a sales tax while Maine has adopted both over the years.

These policies have led to higher incomes, greater migration, and fewer job losses during the recession for New Hampshire. I’d love for New Mexico to attempt to compete with Texas by eliminating the personal income tax. That alone would be a boon to the state.

For a sobering, objective look at New Mexico’s real graduation rate and state efforts to mask it, check out the amazing “Diploma’s Count” study for 2010. For example, did you know that APS is one of 25 “dropout epicenters” in the United States?

It is a big district, but not in the top 25 nationally.