Recently, on the pages of the Albuquerque Journal’s business section, some students from the Anderson School at UNM made some salient points regarding the recent federal bailouts. While their points were largely accurate, they concluded by arguing that Congress should dump money that went to the automakers into “green energy” instead.

In a letter to the editor that was published in Monday’s Business Journal, I express my disagreement with the idea that Congress should pick winners and losers, regardless of their future prospects (as foreseen by politicians):

Picking winners a loser

Reading the “Executive’s Desk” column from the various business students at UNM’s Anderson School (April 5) renewed my confidence in the next generation of business leaders. They made a compelling case against government intervention in the U.S. economy on behalf of specific industries and connected it directly to taxpayers’ pocketbooks and lower living standards. These are the inevitable fruits of massive government intervention.

Better still, the students went on to discuss the concept of “comparative advantage” which explains that the U.S economy can continue to thrive regardless of its prowess – or lack thereof – in specific industries and sectors like manufacturing because U.S. workers and companies do other things quite well.

Unfortunately, the students undermined their own case toward the end of their article by asserting that taxpayer dollars that were allocated to the auto bailout should instead be directed toward promotion of so-called “green” jobs. The idea that government schemes to create jobs are worthy of support is every bit as specious as the idea that saving auto industry jobs is worthy of massive infusions of taxpayer dollars.

If Congress wishes to build wealth and grow the U.S. economy, the best policy is to leave entrepreneurs and the marketplace as a whole, free to allocate resources. Picking winners and losers is both corrupting and a road to reduced standards of living.

Paul J. Gessing
President
Rio Grande Foundation

Our friends at the National Taxpayers Union regularly put out useful information on the state of America’s economy and the burdens our government puts on taxpayers and future generations of taxpayers. For a startling view of the debt burden, check out the chart below:

Rio Grande Foundation research has previously pointed to higher education as an area of tremendous bloat in terms of employment. According to the findings of this study, higher education in New Mexico is the most bloated of any state in the nation.

Where there is smoke, there is often fire. So, in today’s Albuquerque Journal, our adjunct scholar Kevin Rollins explained that there are wide disparities in terms of higher education costs among both State universities and community colleges. Efforts by legislators and the Higher Ed Department should focus on figuring out why such broad cost differences exist and what can be done to reduce costs. After all, with $80 million in potential annual savings, we could do a great deal to reduce or even eliminate state budget problems.

New Mexico government has gotten more transparent in recent years. The Rio Grande Foundation can take some credit for this, but the efforts of individual legislators like Sen. Sander Rue, Janice Arnold-Jones, and even Lt. Governor Denish cannot be discounted.

Nonetheless, there is still much to do and over at the Independent Forum this week, the panelists (including yours truly) offered their thoughts.

I did not always see eye-to-eye with Heather Wilson when she was in Congress. She was never fiscally-conservative enough for my tastes and was one of the worst-scoring Republicans year after year in ratings like NTU Rates Congress.

Nonetheless, I was thrilled to see her come out swinging in the Albuquerque Journal regarding the passage of ObamaCare and New Mexico Sen. Jeff Bingaman’s strong support for the “reform.”

Wilson writes convincingly of ObamaCare’s lack of any real cost controls:

The biggest problem with health care that Americans want addressed is spiraling cost. Year after year of cost growth at two or three times the rate of inflation makes it difficult for any business to offer insurance. One of the biggest reasons take-home pay hasn’t increased much over the past decade is that health care benefits are absorbing what would otherwise show up as pay raises.

The law passed does virtually nothing to address the escalating cost of health care. In fact, health insurance premiums will continue to rapidly increase under the new law, particularly for younger Americans. The law is based on an assumption that greater government control will put a brake on costs. But experience with both Medicaid and Medicare shows this just doesn’t work.

Consumer-driven care and more choices can help control cost growth. The cost growth for medical procedures where the consumer makes a decision — like elective plastic surgery, dental care, chiropractic care, LASIC, hearing aids and eye glasses — are much closer to the regular rate of inflation.

Although Wilson seems to have no plans to run for office in the near future, it was good to see her jump into the health care policy debate on the side of those who opposed even greater federal intervention in Americans’ health care.

Clinton was a fiscal moderate; Bush was a big spender. Unfortunately, Obama has taken Bush’s big-spending ways, expansion of government’s role in health care, and foreign policy and either locked it in or expanded it. If, by some chance, Obama reads the Albuquerque Alibi, I hope he reads my article this week.

So, to answer the question, no, I don’t miss “him” yet. I do miss this Democratic Party president though.

The folks over at Publius Blog have done some nice analysis of Mayor RJ Berry’s recently-unveiled budget and the prognosis is good. By way of summarizing, the budget “does not raise taxes and minimizes cuts in services.”

Certainly, it would make sense to eliminate or at least dramatically reduce the payouts for unused sick days. This is the kind of thing that should be addressed regardless of the budgetary climate.

Of course, the Mayor’s budget has a long way to go before it becomes law and there are policies like the unused sick days issue or, say, contracting out garbage collection, that might be helpful additions. Anyway, tell your Councilor what you think.

Sen. Steve Fischmann had an interesting piece in the paper today on education. The basic point is that there are too many people and entities with policy making power, there are too many standardized tests, and education dollars are not being spent wisely.

These are nice ideas, but our schools are not designed to effectively educate children. They’re socialistic in nature and seem to exist for the benefit of the teachers’ unions and bureaucrats. Fischmann’s fixes, absent serious structural reforms, will not be implemented and the system will continue to founder, failing thousands of New Mexico students at the same time.

We do have a model for success that has resulted in serious educational improvement, but Fischmann (and the rest of the Legislature, for that matter) are not seriously considering systematic reform.

Small investors in Vanguard’s Wellington fund are beating the high-priced professionals running over $30 billion of state investments.  Our latest report at New Mexico Watchdog.  Translate these competitive differences into dollars and you’ll see how New Mexico has been losing out on billions of dollars in investment returns.  Maybe it would be better to convert this hoard into no taxes and then support the state off the diverse, vibrant economy that would follow.  Just a thought.

I just love Rep. Mimi Stewart’s transparently-ignorant political stances. Her latest is a defense of the WARN Act, HB 180, which, in summary, would make it much more difficult for employers to let go of employees.

Of course, if all you look at is the visible consequence of a new policy, that being giving workers more time to prepare for unemployment or their transition to another job, then Stewart’s idea is hard to argue with. But, of course, policies have both obvious and not-so-obvious results. If you are an employer, say Gardunos, and you know that you are struggling to make it, you will be more likely to either not hire or start to fire workers, even if this is not the best thing for the company.

So, Stewart, in her infinite wisdom, would seemingly rather push Gardunos and others towards bankruptcy — including by not hiring needed workers — rather than allowing Gardunos and other companies that might be struggling to do their level best to keep going even in tough times. I’m sure Stewart and other backers of ill-advised rules and regulations would rather see unemployment north of 10% in New Mexico.

Jon Barela is running for Congress against Rep. Martin Heinrich, who, since the early days of the health care debate has been a strong supporter of a bigger government role in health care. Of course, Heinrich supported the recently-passed health care bill.

Thankfully, this November, residents of District One will have a stark choice to make when it comes to health care. Barela outlined his concerns about health care in an excellent opinion piece in today’s Albuquerque Journal. Among the many critiques that I and others have made regarding the legislation, I was most interested in Barela’s solutions. After all, it is one thing to stop Obama’s ill-advised expansion of government, but it is another thing to oppose Republican health care boondoggles. He lays his vision out towards the end of the article:

There is a better way to offer high quality, affordable health care in America, and it begins by discussing proposals that could win bipartisan approval, as well as the support of states, small businesses, and American families. Among other things, these include allowing for the sale of health insurance across state lines, encouraging small businesses to pool together to compete for lower insurance rates for their workers, significant tort reform to reduce the waste that is generated by junk lawsuits and defensive medical practices, and providing tax credits to individuals to use in health savings accounts.

I like what Barela says here, but there is one thing he forgot to mention. That is, ultimately America must replace its third-party-payment system when it comes to health care. Relying on employers for health insurance is just silly, but that is the way our system is set up and Obamacare only reinforces that absurd system. Hopefully, Jon Barela and what I imagine will be a significant majority in Congress come November will repeal Obamacare and go about dealing with this and other core issues.

In case you missed it, New Mexico Sen. Jeff Bingaman recently defended the health care bill that Congress passed in an Albuquerque Journal piece entitled “Health Reform will Benefit New Mexico.” Unfortunately, Bingaman seems ignorant of the bill’s real impacts to the point where he repeats the untrue assertion that “New Mexicans who like the insurance coverage they have can continue to purchase the same insurance in the same way.”

Well, apparently Bingaman doesn’t know that the bill will have dramatic, negative consequences on Health Savings Accounts. As an owner of one of these “consumer driven health care policies,” I know better. The folks at the Heritage Foundation provide a more thorough analysis of the Bill’s impact on HSA’s here. According to Heritage:

The Obamacare law limits these consumer-controlled accounts in two ways: it restricts the types of health products you can purchase with your HSA money, and it reduces the amount of money you’ll be able to put into your FSA.

Unsurprisingly, there’s a price hike, too. It doubles—to a whopping 20 percent—the tax penalty for withdrawing HSA funds to cover non-medical expenses.

That hardly sounds like “same insurance in the same way.” Of course, Bingaman’s entire article is full of lies like “the new law more than pays for itself.” That is simply not the case, even if we assume that Congress will make the future cuts necessary to achieve the assumptions laid out in the legislation.

As a member of the Senate Finance Committee, Bingaman is fully aware that this health care legislation is going to drive America into deeper deficits and increase health care costs for average Americans. Unfortunately, to Jeff Bingaman, the truth about health care reform is worth covering up.

On Channel 13’s 10pm news last night, I discussed the problems with, and potential savings that could be had, if Mayor Berry addresses the City’s policy of paying out full equivalent wages for unused sick days. The Rio Grande Foundation has done a great deal of research showing that New Mexico’s state and local work force is both bloated and over-compensated.

Changing this policy would seem to be an easy, if not politically-difficult, way to eliminate $9 million of the City’s $54 million or more deficit. Watch the story here.

The Obama Administration has announced that it would reverse a ban on oil drilling off most U.S. shores. In many ways this is a good thing. It opens 115 billion barrels of oil and 633 trillion cubic feet of natural gas to domestic production. This is all good news and in many ways it is long overdue.

The bad news is that Obama readily admits that he is going to use this decision as a tool to drum up support for his economically-devastating “cap and trade” legislation. While that may be a pipe dream, even this decision by Obama has some hidden negatives. These include pulling other areas from potential production. According to this article from the Globe and Mail, “But while it will provide new access to the U.S. east coast and eastern areas of the Gulf of Mexico – provided such plans are cleared on environmental grounds – the new strategy also cancels one planned lease sale in Alaska’s Bristol Bay, considered too environmentally sensitive, and delays two others.”

So, while it is good to see that Obama is not simply putting his head in the sand and universally opposing all oil and gas production, he has a long way to go before he earns any credibility as someone willing to pursue rational energy policies.

In case you missed it, the results of the most recent National Assessment of Educational Progress (NAEP) in mathematics and reading for grades 4 and 8 which is given every two years to students nationwide, were released recently. The results are not pretty for New Mexico.

According to the data sheet for Fourth Grade reading:

“the average score in New Mexico was lower than those in 43 states/jurisdictions, higher than that in 1 state/jurisdiction, not significantly different from that in 7 states/jurisdictions.” Worse, the all-important 4th grade reading score — studies show that if students don’t know how to read by 4th grade, they will continue to lag in reading-related learning areas — dropped from 212 to 208;

While eighth graders did slightly better in math and reading, New Mexico students were worse than at least 40 other states in both math and reading and typically scored better than only one or two other states. Scores tended to be equivalent to 7-8 others.

Combined with our statewide graduation rate of approximately 50% and the ineffectiveness of more spending, it would seem that policymakers should take a look at Florida where all students (especially Hispanics) are seeing rapid improvement.

The Rio Grande Foundation has been telling the political class for years that a disproportionately large public sector was stifling our economy.  Turns our the Lt. Governor’s–and the Governor’s–own advisers have been saying the same thing.  New report from New Mexico Watchdog.

Some of President Obama’s biggest fans around the world happen to be leftist despots like Cuban President Fidel Castro. Congress’s recent passage of a government takeover of the US health care system provided an opportunity for socialists of all stripes from Castro to our own Jerry Ortiz y Pino to heap praise on the US President’s “momentous accomplishment.”

The fact is that ObamaCare is designed to fail and leftists of all stripes will use it as an opportunity to further spread the tentacles of government through the US economy in order to “fix” the new system’s flaws. The only thing left to do is resist it nonviolently.

President Obama recently announced his so-called “National Broadband Plan.” The supposed goal of this plan is to “make America’s nationwide broadband infrastructure the world’s most powerful platform for economic growth and prosperity.”

Unfortunately, as I pointed out in this piece in the Las Cruces Sun-News, Obama’s efforts to use the federal government to expand broadband are both misguided and in direct contradiction to his other cherished “Net Neutrality” policies which would again increase federal control over the Internet.

Feel free to borrow and send your own.

March 25, 2010

NM Attorney General Gary King
PO Drawer 1508
Santa Fe, NM 87504-1508
FAX: (505) 827-5826

Dear Mr. King:

On behalf of the many citizens of New Mexico who have deep concerns about and will be negatively impacted by the health care legislation, HR 3590, I write to urge you to join the efforts by other state attorneys’ general to challenge the Constitutionality of the Patient Protection and Affordable Care Act, which was recently passed by Congress.

The legislation passed by congress requires individuals to purchase health insurance or pay a fine. Such a sweeping federal mandate has never before been enacted. In fact, when such a mandate was previously considered, a 1994 report from the Congressional Budget Office said, “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.”

It appears that congress may be overstepping its bounds by forcing individuals or businesses to buy insurance. I respectfully request that you review the legal issues being raised by these unprecedented federal interventions which I believe violate the following Constitutional provisions.

4th and 5th Amendments violation: The mandated IRS monthly audits to determine if citizens have complied with purchasing satisfactory insurance is unreasonable search of a citizen’s financial accounts and threatens self-incrimination.

10th Amendment violation: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The “Commerce Clause” of Article I, Section 8 does not refer to mandated health insurance.

13th Amendment violation: “Neither slavery nor involuntary servitude…shall exist within the United States…” Punishment by fines and imprisonment for failure to purchase mandated health insurance is definitely involuntary servitude.

As you may be aware, attorneys general in at least 12 states have indicated they plan to file lawsuits to block implementation of the federal health care reform legislation on constitutional grounds. I hope you will join this effort.
Sincerely,

I don’t have to state that the Rio Grande Foundation is and has been opposed to ObamaCare. Now that it has passed, here is a list of 20 ways in which Obama’s health care plan will reduce our freedoms. One of these ways is that ObamaCare eliminates my health care plan (a health savings account) by making it illegal.

At this point, unless the various state lawsuits (which New Mexico has not joined to date) succeed in stopping ObamaCare, Shikha Dalmia of Reason explains that opponents need to take a page from Gandhi and his non-violent resistance efforts.

Among the keys to the effort, Dalmia cites:
1) avoiding Mitt Romney who promoted the individual mandate in Massachusetts;
2) always remaining non-violent in rhetoric and actions;
3) defeat ObamaCare supporters in 2010 and 2012;
4) sue em’;
5) average citizens must refuse to comply with the individual mandate and the associated fines.

It is being reported by the Albuquerque Journal that Governor Richardson has vetoed the food tax while approving, as expected a 75 cent hike in the cigarette tax, a .25% hike in the GRT, and a personal income tax hike for about one-fourth of New Mexico taxpayers. Total approved hikes come to $170 million.

Richardson says he’ll close the budget gap “by dipping into cash reserves, employing $20 million in federal stimulus money and cutting state agency spending as a last resort.” Of course, I’d rather have seen Richardson veto any one of the other tax hikes due to the economic harm (or harm to specific groups) that they inflict. It will be interesting to see how Richardson does in fact “close” the budget deficit. It seems more likely that the issue will have to be revisited either before Richardson leaves office or immediately by the next governor.

After all, according to the Legislative Finance Committee, FY 2010 revenues were down 9.3% over the prior year. The estimates for FY 2011 are for an absurd 6.2% jump in revenue. That 15.3% turnaround seems unlikely at best. Anyway, enjoy your tax-free groceries while you can. As for the rest of us taxpayers, we’re stuck with a worse economy and a more difficult business climate.

The folks at Reason — along with comedian Drew Carey — have put together a series of videos on urban development issues over at Reason.Tv.. One of the videos discusses how cities can and cannot successfully draw people to their downtown areas and make those areas vibrant places where people want to be.

The video below tackles convention centers, an expansion of which is now being considered by Albuquerque Mayor Berry (you can comment here). It also discusses sports arenas and stadiums, zoning, and activist efforts to stop politically-incorrect businesses from locating in certain areas. Enjoy!

Over this past weekend, I was on Channel 7 talking about efforts by a few schools around the state — using a combination of private grants and federal money — to provide full-service health care and a variety of other social services. The concept is called “community schools” and the idea is to further transform K-12 schools from centers of learning to being focused on the mental and physical needs of children and their families. The article and video available here.

You can’t turn on the television or radio these days without being bombarded by ads urging you to fill out and return your census form. This is especially true if you have watched the NCAA Tournament over the weekend where the commercials were played constantly.

One of the most common tag lines is “We can’t move forward til you mail it back.” The idea is that if you don’t fill out your census forms to let the government know you exist, hospitals, roads, schools, government office buildings, and other infrastructure will be inadequate. After all, we need to “get our fair share of federal dollars,” right? All of this loses sight of the one legitimate purpose of the census, that being Congressional apportionment.

This entire exercise clearly illustrates the power of the free market relative to the incompetent and inefficient government. After all, if hospitals, schools, roads, etc. were provided by the free market, then entrepreneurs would add to the existing infrastructure based on need. That need would be expressed as high enough prices and/or crowding that leads one to believe that additional services are necessary and can be supported in the free market.

So, on one hand, we have the free market which allocates all these resources efficiently based on need and for free. On the other hand, every 10 years, the government spends $13.7 to $14.5 billion in a futile attempt to replicate what the market does. I’m sure our new health care system will be just as efficient!