I really haven’t blogged about the government’s “Cash for Clunkers” program in which federal taxpayers give purchasers of certain automobiles from $3,500 to $4,500. The program is based on such transparently bad economics that it really didn’t merit any mention. Of course, politicians, those who take money from one group of people and give it to others, have justified the program based on its popularity. Dropping money our of airplanes would be popular as well, at least if you are one of the lucky people standing on the street as the planes fly over.

But, as is so often the case with government, what they say and what they do are two different things. This report from Maryland explains that fewer than 2 percent of claims for reimbursement in Maryland have been paid by the feds. Of course, government officials are blaming dealers for “submitting incomplete claims, which in turn cause delays.”

It is no surprise that car dealers, most of whom until recently were not experts in filling out government paperwork might not dot all the i’s and cross all the t’s required by the bureaucrats. I’m not sure how this situation will play out, but it seems quite likely that many dealers will lose out on thousands or even millions of dollars while the government reimburses other people who take advantage of the system.

The real story is that this is the way government works all the time. It’s not just health care, but “cap-and-trade,” Social Security, Medicare, and nearly all programs administered by the federal government that are not found in the US Constitution.

We have just confirmed that Rio Grande Foundation president Paul Gessing will be included as a member of Rep. Martin Heinrich’s health care panel at his upcoming town hall meeting this Saturday, August 22, 2009. The event will be held from 3:00 to 4:30 p.m. at the UNM Continuing Education Building which is located at 1634 University Blvd. NE, in Albuquerque. If you plan to attend, it is highly recommended that you arrive early as space will be limited and those who support an increased role for government in our health care system will be out in force. In fact, some are concerned that supporters of the government takeover are being told the event starts at 2:30 rather than 3:00 in order to get more of them to show up.

Nonetheless, this is bound to be one of the most important health care related events in Albuquerque in some time.

Gessing will represent the Rio Grande Foundation on the panel and will be a voice for market-based health care reforms. He’ll also show how government is not the solution to all of our health care problems. While he’ll undoubtedly be outnumbered, his inclusion on the panel at all is a clear sign that proponents of additional government intervention in American health care are starting to realize that other opinions must be recognized in this important public policy debate. See you there this Saturday!

If you’ve driven around town recently, you have probably seen the campaign signs for Mayor Marty that have popped up like so many weeds after a monsoon storm. The signs which tout the Mayor’s “Leadership, Vision, and Results” are mostly located in open fields and other “public property” locations. But, as I was driving downtown the other day I noticed a sign in a rather unusual place, especially for an incumbent Mayor. I saw a sign in front of a boarded up hotel, the “Silver Moon Lodge” which is just west of downtown on Central.

Certainly, a boarded up hotel would seem like poor location for an advertisement for the economic policies of the incumbent administration (I’m sure the Silver Moon Lodge would be doing just dandy if taxpayers were forced to expand the downtown convention/events center as the Mayor has previously proposed). Worse, and I didn’t notice this until I stopped to take pictures, the Mayor’s sign has been tagged. One photo of the sign and the hotel sign is below, but photos are also here and here.

Lastly, the Mayor has not filled out the Rio Grande Foundation’s candidate survey. He is the only candidate running for Mayor not to have done so.

On this week’s episode of “Speaking Freely (available here),” I interview Sen. Mark Boitano regarding New Mexico’s budget shortfall, the upcoming special session, and “tax lightning” as it relates to property taxes.

In today’s Albuquerque Journal business section Dale Lockett of the Convention and Visitors Bureau and Charlie Gray of the Inkeepers Association continue their push for a downtown arena and convention center expansion.

Said Lockett, “The overall lower occupancy numbers also reveal increased competition for convention and meetings business. We’re going to be challenged until the need for an (much larger) event center is realized. “The competition has a better product for convention centers. The impact is more than just dollars and cents, it’s who’s coming in. It’s business people, it’s buyers.”

Charlie Gray, executive director of the Greater Albuquerque Innkeepers Association, said a lack of availability at Downtown hotels hurts Convention Center bookings. He said there are about 400 to 450 rooms available between Downtown hotels on any given night — not enough to house a large convention in one area. If there was more availability Downtown, the ACVB would have the tools to work with.”

Do these guys not read the numbers relating to their own industry? Are they not aware of the 41 percent decline in bookings related to convention center events in 2009 relative to 2008 here in Albuquerque? This is hardly an argument for pouring additional taxpayer money into a bigger convention center and additional hotel space associated with the convention center.

Take Atlanta for starters, that city’s Georgia World Congress Center recently reported a $1.3 million loss. Then there is Las Vegas, another big convention town, where many of the big casinos are reporting revenue losses of 30 percent over last year.

All across America the convention industry has been in a sustained decline for the better part of a decade. Check out this study from the Brookings Institute (by no means a right-wing think tank). If some entrepreneur felt that the trend was going to change suddenly and wanted to invest their own money in such a venture in downtown Albuquerque, I’d be all for it. Surely, however, the dying convention industry is not worthy of a bailout courtesy of Albuquerque taxpayers!

“Tax Lightning” is a situation in New Mexico dealing with property taxes in which someone who buys a new home experiences a dramatic increase in property tax burdens because the property they are purchasing is no longer covered under the state’s 3 percent annual assessment increase. This situation was overturned yesterday by a judge who said that such unequal treatment was illegal. Read Albuquerque Journal article here .

The judge’s decision is definitely a double-edged sword. On one hand, taxpayers who stay in their homes for longer periods of time definitely benefit from the 3% tax cap which has now been ruled to violate New Mexico’s Constitution. So, doing away with the cap could increase all of our property taxes. On the other hand, if the Legislature places a 3% cap on all property, this could be a very good thing for New Mexico taxpayers. On the other hand, New Mexico faces a $300 million budget shortfall. Are legislators really going to forgo another source of revenue at a time of constrained budgets? Only time will tell.

If you want to know more about the demise of “tax lightning,” tune in to the Rio Grande Foundation’s radio show “Speaking Freely” from 9am to 10am tomorrow (Saturday). We’ll be discussing the issues with New Mexico’s foremost legislative expert on “tax lightning,” Senator Mark Boitano.

John Mackey the CEO of Whole Foods is one of my favorite businessmen. His company may cater to the left (and others who like organic/free range food who are not necessarily on the left or politically-motivated at all), some of whom are really angry at him although they can’t refute his arguments, but he is an unabashed free market-believer. In yesterday’s Wall Street Journal, Mackey outlined a great solution to America’s health care problem that is based, not on bigger government and higher taxes, but instead upon individual freedom and choice.

Mackey’s reform ideas, many of which have been supported by the Rio Grande Foundation, are outlined below:

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

A note to Republicans, while opposing Obamacare is a start — at least they are no longer actively expanding the federal role in health care as they did under President Bush — you need to adopt these as your legislative priorities. Sure, legislative being pushed by Rep. John Shadegg and Sen. Jim DeMint would allow for insurance companies to compete across state lines.

In case you have been hiding under a rock or left the country for vacation recently, you are probably aware that Congress has heard an earful from the American people on the issue of health care and President Obama’s move to vastly expand government control over Americans’ health care. In light of these outbursts, Members of Congress are being very careful about how they handle their town hall meetings.

Rep. Martin Heinrich is not alone. He has one town hall scheduled on health care. The event is scheduled for Saturday, August 22, 2009, 3:00 to 4:30 p.m and will be held at the UNM Continuing Education Building which is located at 1634 University Blvd. NE, Albuquerque, NM 87131. From talking to his staff, the idea is to have a panel of experts on hand to explain Obamacare.

Since we at the Rio Grande Foundation have done a great deal of work in the field of health care, we offered our services to appear on the panel and provide an alternative perspective. Unfortunately, we were told that although the panel for the 22nd was not full, our services were not needed (don’t expect to hear anyone who doesn’t think Obamacare is a good idea or that government should not see a much larger role in Americans’ health care decisions).

So, I followed up with Heinrich’s office offering to host a discussion of the topic in which free market voices are added to the discussion. Our letter is block-quoted below and we’ll definitely keep you posted if anything develops (I’m not holding my breath).

August 10, 2009

The Honorable Martin Heinrich
United States House of Representatives
20 First Plaza, Suite 603
Albuquerque, NM 87102

Re: Health Care Debate

Dear Representative Heinrich:

In the interest of giving the First Congressional District the full and open debate it deserves on the President’s proposals to change our national healthcare insurance and delivery systems, the Rio Grande Foundation is pleased to offer to convene for you a panel of experts and concerned citizens who favor free market approaches to the issue.

We understand your health care town hall meeting on August 22, 2009, will include a panel of experts who favor the President’s plan, but will not include any critics or proponents of free market alternatives (including representatives of the free-market oriented Rio Grande Foundation which is based in your home district in Albuquerque). We believe the citizens of your district deserve more than that, and that is why we make this offer.

We would be glad to schedule this panel discussion any time convenient to you. We look forward to working with your staff to arrange this educational event, and advance the public debate on an issue so important to your constituents.

We hope you will accept this invitation.

Sincerely,

Paul Gessing,
President

The Rio Grande Foundation hosted David Boaz in Albuquerque a few weeks ago and Bob Clark had us both on the air. The interview is now available online.

I have often written on the myth that America has a health care system that resembles a “free market.” Here and here just to name a few recent examples. Well, I was up to my old tricks again in a recent letter that appeared in Albuquerque’s alternative weekly, The Alibi. The letter is copied and pasted below:

[Re: News Feature, “Health Care on Life Support,” July 16-22] Simon McCormack did a reasonably good job of discussing some of the problems currently facing American health care and some of the “reform” options now percolating in Congress. But, as is too often the case, the story aligns “free markets” with the status quo. Dr. Jason Cohen in particular is quoted in the story saying that certain doctors, insurance companies and the pharmaceutical industry support the current “privatized model.”

While I’d like to give the media the benefit of the doubt in confusing the current health care system with a free market system, one would think that it would be hard to overlook the fact that government spending on health care accounts for 46 percent of all such spending. That hardly sounds “free market” to me.

Additionally, federal tax policies favor third-party-purchased coverage by allowing employers to purchase coverage tax-free, thus taking cost decisions out of the hands of individuals and reducing the incentives for average workers to be cost-conscious consumers when it comes to health care. As if that is not enough, states also regulate care, thus piling on costly mandates. New Mexico has 51 of them.

America’s health care system is by no means perfect, but the supporters of “reform” have not shown how still more government intervention in health care will result in higher quality, less expensive care.

An additional example, that I have not previously used is that Congress could mandate that insurance companies take “all-comers” by passing a regulation called “guaranteed issue” and it could also add on an individual mandate (I’m describing the basics of the Massachusetts plan and parts of Obama’s). Given these regulations which would dramatically alter (for the worse) the health care system, it is worth noting that these do not result in “socialized” medicine or even government taking over an increased level of government spending. Needless to say, numbers can be deceptive, but Americans should not labor under the misperception that we have anything close to a free market health care system.

On Saturday’s show, AM 1550 KIVA station owner Don Davis hosted. We discussed the Rio Grande Foundation’s recent study on the financial condition of the Rail Runner and an opinion piece I wrote on the train which included analysis of the potential expansion of the train. Listen to the show here.

Using “feel-good” rhetoric and positive words to sell legislative ideas is nothing new. Remember the PATRIOT Act? Who could vote against the PATRIOT Act, especially right after 9/11.

Anyway, at least with the health care bill now moving through Congress, at least we still have time to stop bad things from happening. The National Taxpayers Union has put together a great one-page flier illustrating how often President Obama and those in Congress who want to further expand government control over health care use positive rhetoric about choice, freedom, and competition while in a count of the actual words contained in the bill, words like taxes, regulation, and penalty are used far more frequently. That’s a fairly succinct illustration of the rhetoric vs. reality on the health care issue. Might be something useful to print and bring/hand out at town hall meetings.

With the Albuquerque Journal focusing like a laser on New Mexico’s poor education results recently (and justifiably show), I questioned Richardson’s credentials as an “education governor.” Thankfully, we at the Rio Grande Foundation are not the only advocates of real education solutions. Our friends at Educate New Mexico are just one of several groups that have been working on proposals that would improve educational opportunities in New Mexico.

Late last week, Daniel Ulibarri, the Executive Director of Educate New Mexico wrote an excellent opinion piece explaining and making the case for tax credits. It can be found here.

We at the Rio Grande Foundation have long been critical of the Rail Runner. But Governor Richardson calls it a “success” and politicians around the state want the train extended to their communities. The ultimate plan seems to be to run it south to El Paso and north to Denver.

Unfortunately, as Jim Scarantino points out in his new report for the Rio Grande Foundation, “Red Ink Express,” and I point out in my article “Reports of Rail Runner’s success greatly exaggerated,” the Rail Runner is not a success, at least when it comes to operating with minimal government subsidy (and that doesn’t even include the massive $400 million taxpayers invested to build the system).

Governor Bill Richardson is all over the morning paper talking about his education reform ideas. He claims his “bold plan” will result in 10,000 more high school grads. I love it when politicians claim they can sway the actions of multitudes of individuals with the wave of a hand or a simple policy change. Of course, his new-found concern is education is a result of the state finally admitting that the real graduation rate in New Mexico is 54 percent.

This data is not “new.” Similar data has been available for years stating that only 50 percent of New Mexico high schoolers graduate. The difference is that the political establishment is finally admitting it. Unfortunately, Richardson’s “reforms” which at best replicate the better aspects of No Child Left Behind (testing across all ethnic groups) and at worst simply hide behind politically-correct pandering (creation of an Office of Hispanic Education) will do nothing to improve graduation rates.

Governor, you said when you first ran for Governor you supported education tax credits to provide for school choice. How about advocating for those? How about vouchers narrowly targeted at foster care and special needs kids? How about we use Florida, where Hispanic students perform better than the average New Mexico student, as a model?

The folks at Health Care News are covering the debate over Obama’s health care proposal and state health care issues like no one else. I have been pleased to provide my perspective on various stories that have been published in the paper and online. I have several quotes sprinkled throughout the August edition.

First and foremost, I discuss the strategies that need to be employed by opponents of Obama’s health care plan.

I also weigh in on the Pfizer drug company’s offering free medications to unemployed Americans, discuss efforts in <a href="“>Michigan and Arizona proposal to expand Medicaid, and lastly I comment on Sen. Jon Kyl’s legislation, introduced in the US Senate, to prevent health care rationing.

In case you are not already aware given the debates rampaging in Washington, we are having a mayoral election in Albuquerque this October. There are three candidates, two of whom, Richard Romero and RJ Berry, have been on “Speaking Freely” (I like both of them personally a great deal). Listen to Richard’s show here and RJ’s here. We are working to get Mayor Marty on the show as well now that he is officially in the race.

Anyway, I’ve looked at the visions and policy prescriptions from each candidate. Berry, Romero, and Chavez. Unfortunately for the challengers, it seems that Mayor Marty has spent a lot more time on his vision than they have and he seems to steal their thunder, particularly on the issues of open government and transparency.

The challengers, while I do believe they will shake things up, haven’t used their own issue and vision statements to differentiate themselves from the policies of the current Administration in two major ways: taxes and business friendliness.

As the Rio Grande Foundation has pointed out in the past, Albuquerque has the heaviest tax burden of any city in the state. This is mostly the result of our heavy property tax burden, but the Mayor has been party to several local tax hikes. Also, while the Mayor promotes jobs and small business, he and his Administration makes it more difficult for businesses to set up shop in the City.

The good news is that the Rio Grande Foundation has created a candidate survey for all mayoral and council candidates in the City. The results will be posted soon and our questions may give the candidates yet another opportunity to differentiate themselves. Keep an eye out for that!

As a state and local think tank, we opposed the federal stimulus bill, but did not articulate many of the specific reasons for our opposition — aside from the fact that temporary economic stimuli have never worked. That said, two of our economists on staff, Ken Brown and Micha Gisser recently tackled the stimulus on the pages of the Albuquerque Journal’s Business Journal.

The article, “Stimulus plan too big, too late to help,” can be found here.

The Lewin Group, a highly respected health care policy and management consulting firm, has examined the impact of the American Affordable Health Choices Act of 2009 (H.R. 3200).

In New Mexico, the impact of the health care bill on private coverage, the uninsured, physicians and hospitals, as found by the Lewin Group, is as follows:

– 45 percent of privately insured New Mexico residents would transition out of private insurance.
– 51 percent of New Mexico residents with employer-based coverage would lose their current insurance.
– 82 percent of New Mexico residents in a health insurance exchange would end up in the public plan.
– 49 percent of the uninsured in New Mexico would still lack coverage.
– Physicians in New Mexico could see their net annual income decline by $136.7 million, as a consequence of the new public plan.
– Hospitals in New Mexico could have their net annual income fall by about $314.6 million, with hospital total margins dropping to 1 percent.

While the Washington Post attacked the Lewin Group in a recent story, the story was unable to refute the numbers cited above. More importantly, Lewin’s clients include the government and groups with a variety of perspectives, including the left-leaning Commonwealth Fund.

The numbers above should be a wake-up call to those who think that Obamacare will solve our health care problems.

I couldn’t make this week’s episode of Speaking Freely. I was actually heading to a meeting in Santa Fe (I took the RailRunner and that is a different story). Anyway, earlier in the week Jim asked the Democratic Party which is located next door to the KIVA Studios and they told him they would send someone to discuss the health care proposal making its way through Congress…but they never sent anyone. So, Jim and the producer Double C ad-libbed and took calls on the issue. Listen to the show here.

Recently, one of Governor Richardson’s lead advisors on health care issues argued on the pages of the Albuquerque Journal that the so-called “public option” is the best fix for our health care system.

A national public option is perhaps the most important step in the reform process. What can a public option do to fix the well-identified problems? First, by being a good public option that is national in scope, it will allow for the creation of one large actuarial pool across state lines, thereby dispersing risk and allowing small state like New Mexico to take advantage of large pools.

Second, every American should be able to obtain coverage. This means coverage under a private plan, or coverage under a public plan. Patients should not be turned away because of a pre-existing medical condition and they should not be turned away because they cannot afford coverage.

Third, a good public option must include coverage of all essential medical services. This includes preventative care, maternity leave, disease management, and more.

Finally, a good public insurance option will enforce transparency and comparative costs across plans and providers, as well as report on benchmarks of quality and outcomes.

By “public option,” Tryon means “Medicare for all.” Of course, enlarging actuarial pools is a nice idea, but allowing patients to wait until they are sick in order to get insurance is like buying auto insurance after an accident. Nice idea, but hardly fair.

As he states in point three, a public option must be very robust. This is means that young people will be forced to pay more for costly insurance plans. No “bare bones” policies will be available and this likely means that my Health Savings Account will be eliminated as an option.

Of course, advocates of “Medicare for All” never mention the unfunded liabilities associated with Medicare. They also love to claim that a “public option” won’t crowd out private insurance because, “if the free market is so efficient, it should be able to compete with a government-subsidized plan.” Of course, they also fail to realize that simply taking money from unwilling taxpayers is, at least currently, very efficient. They don’t seem to believe that the “crowd out” effect (as it relates to demand) matters.

The quote above is from Mahatma Gandhi and it described how his movement eventually achieved victory. Apparently, although we skipped the ridicule part, from reading the pages of the Albuquerque Journal, we at the Rio Grande Foundation must be getting close to victory. After all, our opponents are fighting us and our ideas harder than ever. Why else would readers attack us three times in published letters during just the past week? To me, that seems to indicate a high level of effectiveness and proximity to victory.

First, on Monday, a reader wrote this letter in response to my recent article on “Health Care for All.” Yesterday, I picked up the paper only to see a reader attempt to discredit another organization, CARE, through their association with us. In a letter entitled, “Jimmy Carter Had It Right,” Marita K. Noon’s commentary “Green on the Surface, Dirty Underneath,” is fitting for the executive director of the Citizens Alliance for Responsible Energy — an ally of the Rio Grande Foundation.

Lastly, in today’s paper, a letter writer again decries our opposition to “Medicare for All,” stating:

“Think Tank Needs To Get Real on Need for Health-Care Reform”

THINK-TANK ESSAYS on real-life issues are always interesting to read but are generally lacking in usefulness, and Paul Gessing’s recent op-ed on health-care reform is no exception. He suggests that we limit the government’s role in the health-care industry in order to “ restore the doctor-patient relationship by empowering consumers to shop around for the highest quality care at the best price.”

Where is he? When I had health insurance, the company would send me a list of approved doctors, hospitals and pharmacies that they had already forged working agreements with and that would guarantee their profitability but not my satisfaction.

I currently have no health insurance because the last company I had a relationship with gave me an offer of $800 a month, with a $50 co-pay and a $2,000 deductible. I shopped, but the only others doing business in my area were mysteriously similar in terms and money.

We will get health-care reform. Approximately 48 million Americans have no health care, and millions more have it but can’t afford to use it. I will guess that when the uninsured number reaches 100 million, in say seven years, the medical-industrial complex will realize that they have priced themselves out of the market and that there are no more new customers to be had.

They will then run panic-stricken to the federal government and beg for a bailout. They will then call it health-care reform.

The writer seems to believe that our opposition to government-run health care results from alleged support of the insurance industry as it currently exists and functions. This could not be further from the truth. The key to free market health care and reforming the existing system is to do away with the third-party-payer system which places undue emphasis on health insurance companies. Insurance should play a role that is limited to true insurance and should not be the first place we go when Americans seek health care.

An excellent article appeared recently in the American Spectator. Rather than directly targeting what we know — Obama’s plan will dramatically increase federal control over Americans’ health care — the author, Philip Klein targets an even more important topic, what we know but that isn’t so.

Among the myths that hinder opponents of government-run health care are the “fact” that we have a free market health care system (I have written about this in the past and the “fact” that 46 million Americans are without health care. Many good points made in the article and if conservatives and free market advocates can kill this federal takeover and then work to expand free market health care while educating Americans about the 46 million, we’ll be in a much better position to enact positive reforms in the future.

If you did not attend the Rio Grande Foundation’s “Lights of Liberty” luncheon, you missed out on a truly amazing event (I’m not saying that because I’m the President of RGF). We had 170 liberty lovers gathered at the Marriott Pyramid in Albuquerque to witness several awards being given to the Foundation’s supporters and leaders in the fight for liberty including former Governor Gary Johnson and current Rep. Janice Arnold-Jones.

Also, David Boaz of the Cato Institute gave a powerful talk about “Liberty in Crisis.” The video can be found here: