This week the Albuquerque Journal is holding an online debate over the various health care issues now being debated in Congress. I was asked to participate along with Brian Colón, the Chairman of the Democratic Party of New Mexico, Todd Sandman of Presbyterian Healthcare Services, Dr. Vicki L. Perrigo, and lefty blogger Barbara Wold.
Check out the first round of questions and answers here. Check back at the Journal’s “City Seeker” blog site to follow the debate all week long.

There are so many stories out there about rail systems that over-promise, under-deliver, and go way over budget. Denver is one major city that unwisely passed major tax hikes (with voter approval) to pay for a train system. In that city’s case, the train is called FasTracks. Unfortunately, although not unpredictably, as was written up recently in the Denver Post, the system is costing way more to build than originally anticipated — or at least what the politicians were willing to tell the voters to get the system approved.
According to the article:

Voters approved a $4.7 billion FasTracks plan in 2004, agreeing to pay an additional 0.4 percent sales tax for RTD to build 119 miles of rail throughout the metro area by 2017. RTD says it needs an additional 0.4 percent sales tax — which would bring its total to 1.4 percent.

Also, as I mentioned earlier, unrealistic assumptions were integral to getting voter approval:

RTD used relatively aggressive projections for long-term growth of sales-tax revenues in its 2004 FasTracks plan. Lower revenue forecasts might have forced RTD to scale back the project or seek a bigger tax increase, hurting its chances at the polls. The Post found that RTD’s revenue growth projections were among the highest of eight transit and planning agencies in the West and Midwest. Only planners in Phoenix used a higher average long-term growth projection.

Thankfully, at least to date, Albuquerque has not followed Denver to streetcar hell. Hopefully stories from Denver deter politicians and voters alike from going down the same track.
HT: Harold Morgan

Have a great Independence Day (while remembering the principles that made America a great nation in the first place) and a successful tea party.

Obama and the other advocates for massive new taxes and regulations on energy usage are claiming that their legislation will result in the creation of millions of new “green jobs.” Unfortunately, the reality is not so rosy.
As our friends at the Property and Environment Research Center (PERC) write in their report “7 Myths of Green Jobs,” there is no agreed upon example of “green jobs,” many supposedly “green” jobs are simply clerical positions that are necessary only to handle the red tape and regulations associated with dealing with government rules, regulations, and subsidies. There are several other myths associated with the supposed creation of “green jobs.” Hopefully all 100 members of the United States Senate read a copy of this report before voting on Waxman-Markey.

I’ll give him credit, John R. Hall, writing in today’s Albuquerque Journal, knows how to push people’s buttons in support of universal health care. His argument goes something like this: Obama supports it, doctors support it, the American people support it. The only ones who don’t support “universal” health care are the big, nasty insurance and drug companies, not to mention the media. Oh, and by the way, our current health care system is killing us and our babies and free market capitalism is a failure.
Hall has his polling data correct as far as I can tell. Of course, if enough people sell a given product (even socialized health care!) as a cure for all our problems, large numbers of people will begin to believe. Especially when they never see the drawbacks to the system they are being sold. But, Hall is flat out wrong when he says “America’s statistics on life expectancy and infant mortality are approaching Third World standards.” According to this table, we are on par with Ireland, Denmark, Finland, and several other decidedly 1st world nations when it comes to life expectancy and our infant mortality is rate is far better than third world nations, especially when you account for the fact that there are significant differences in the way the nations collect this data which make the US look worse than it really is.
But these two data sets are largely irrelevant when it comes to socialized medicine and the system proposed by Mr. Hall. Can capitalism work in health care? Hall argues that it cannot, but he does not provide a single shred of data as to how socialized medicine will improve our current system. We at the Rio Grande Foundation always provide real, specific, market-based solutions to our problems.
Socialized medicine’s advocates seem to think that the government has magical powers to allocate resources in an ideal manner that will make everyone happy and will do this all in a more efficient manner than exists now — or could possibly exist were we to pursue market-based reforms. Fortunately, even Obama realizes that reality is in conflict with that fantasy. Hopefully political reality finishes the job in killing a drastic move towards further socialization of our health care.

As I blogged recently, New Mexico’s government employees are suing the state in an attempt to head-off reduced pension benefits and longer work requirements prior to retirement. The Rio Grande Foundation has previously exposed New Mexico’s bloated state and local government bureaucracy. I pull the items together in this new opinion piece.

The Rio Grande Foundation has introduced a new study from prominent transportation expert Randal O’Toole who has analyzed the limited positive impact high speed rail will have on Americans and New Mexicans in particular in terms of mobility and the tremendous impact such “investments” will have on taxpayers. Read more in the study release here.
The full study is available here.

Professor Allen Parkman is a Professor of Management at University of New Mexico. In a recently-published opinion piece that appeared in the Albuquerque Journal, he explains in simple, clear detail, why health care costs have spiraled out of control over the years. As he puts it with regards to Obama’s proposed reform of our health care sector, “History suggests that any cost reductions will be hard to obtain and expanded coverage will be very expensive.”
Parkman rightly points to the tax treatment of health care and how it influences consumer behavior as the single most-important flaw with America’s health care system:

On closer scrutiny, the problems with this industry should be viewed differently, as purchases of health care are often inefficient with unnecessary transaction costs. Let me explain. They can be inefficient because consumers are not exposed to the true cost of the services they are receiving and, consequently, the benefits may not justify the costs. In addition, there are unnecessary costs associated with each transaction. In contrast to a simple credit card purchase at a grocery store, health care expenses covered by insurance require additional paperwork for the provider and then administrative scrutiny from the insurance company.
Both of these problems exist because of the inappropriate use of insurance with regard to health care. Normally, we buy insurance to convert uncertainty into certainty. For example, we pay a predictable premium for fire insurance with the understanding that we will be reimbursed if our house burns down. We have converted an uncertain event (the burning of our house) into a predictable event (a premium and reimbursement if there is a fire). Fire insurance is fairly inexpensive — because it is seldom used.

As Parkman concludes, “With more realistic prices, some of the problems facing the working uninsured will be reduced. There still may be a role for the government providing catastrophic coverage for those individuals and families…real health care reform does not come from promising cost reductions and expanding coverage. It comes from making processes more efficient.”

All too often, those who want to increase the amount of regulations and level of government in the health care sector are considered to be “reformers,” a term generally associated with improving on the flaws of a current, broken system. Several recent articles and letters appeared in the West Side edition of the Albuquerque Journal arguing on behalf of such policies. In my response to these big-government advocates, I argue that moving toward a free market in health care would represent a set of “reforms” that is far more likely to address the flaws inherent in our current system.

This week on “Speaking Freely” on AM 1550 from 9am to 10am on Saturday, Jim and Paul will be interviewing the leaders of the Albuquerque Tea Party movement about the July 4 tea party being planned. In addition, we will be discussing this new study which I recently blogged about on New Mexico’s difficult climate for those who would like to drill for oil and gas within the state’s borders.
Also up for discussion is renewable energy and the “cap and trade” bill moving through Congress. Call in at 505-265-1550 and make your voice heard. As usual, the podcast will be available in podcast format on Monday if not sooner.

Rio Grande Foundation board member and commercial real estate expert Vic Bruno recently presented his thoughts on the intersection of public policy and the Albuquerque commercial real estate market. His presentation focused on the current economic situation as it is affecting Albuquerque and how past events and policy decisions led us to where we are today. He also addressed how we move forward and ways that policymakers and individuals acting in the commercial real estate market can thrive in this new paradigm.
The slides used in Bruno’s presenation can be found here
Video of the presentation is posted below:

As oil and gas prices rise, theoretically, New Mexico’s oil and gas industry should be booming and bringing a great deal of revenue to the state. Unfortunately, with an ever-increasing regulatory burden, the industry is moving elsewhere (particularly to Texas) where taxes, regulations, and corruption do not place such a heavy burden on those attempting to do business. Finally, a study has been undertaken to prove what operators in New Mexico’s oil and gas industry have been saying. The Canada-based Fraser Institute has done an international, provincial, and inter-state analysis of the barriers to investment in oil and gas exploration and production. The report is available here.
New Mexico fares poorly in the study beating out only Colorado, California, Alaska, West Virginia, and Pennsylvania in terns of the overall Extent of Investment Barriers (chart on page 30). Since the study relied on survey data, comments from those who actually do business in the various jurisdictions were a part of the data. Comments about New Mexico included:

Corrupt government. Furthermore, politicians want to stop development but they still want the income.
The state should rely on one agency to police the oil and gas industry rather than every agency,
county, and city, having a separate permitting procedure.
State government is extremely ‘anti-oil’; very hard to make a profit.

The study is an interesting read. Even more interesting will be the impact New Mexico’s increasing regulatory burden will have on one of the state’s most important industries and tax revenues over time.
Jim Scarantino and I will be discussing the findings of this study with its author Gerry Angevine on Saturday’s show at KIVA AM 1550 starting at approximately 9:15.

There have been several opinion pieces in the Albuquerque Journal recently on the issue of health care (such as this one from New Mexico Sen. Jeff Bingaman or this one). That is why it was so refreshing to see this article in today’s paper from a doctor who explains why nationalized health care is doomed to failure.
Writes Dr. Torre Near:

We, as individuals, can do more to improve our lives, but the way the current system is set-up, we have no incentive. The person who exercises every day, is in the normal weight range, doesn’t smoke, has less than two drinks a day and sees a doctor once every two years pays the same as the person who is fat, smokes, drinks, (who’s) exercise is working the remote and (who) sees the doctor every two weeks and is in the ER four times a year.
It doesn’t make sense. We have to change the system, and a national health care plan won’t do that. There have to be incentives to be healthy, just like there are incentives in car insurance to buy a lower cost car, avoid tickets and stay out of accidents.

While the specifics recommended by Dr. Near are somewhat lacking in specifics, there are plenty of ideas in New Mexico and nationally. Hopefully, Congress will kill proposals for government-run or socialized health care and then focus on recommendations that increase individual freedom and personal responsibility in health care.

The Rio Grande Foundation’s investigative journalist, Jim Scarantino, continues to uncover problems at New Mexico’s State Investment Council. The tale of Earthstone and the SIC’s $9 million investment in that company — in part the taxpayer investment was supposed to be used to build a factory in Santa Theresa, New Mexico that was never built (Scarantino reported on this here).
The unique aspect of Scarantino’s latest article, “Friends in High Places,” Anatomy of the SIC’s Bad Investment in Earthstone International” (which is available here) is that the SIC’s analysts actually tried to stop this investment from happening, but they were overruled by the Governor who had a strong desire to get the owners of Earthstone (well-heeled political donors to the Governor) some significant funding. As Scarantino reports:

The SIC knew that Earthstone was a bad bet. But only two months later, on January 27, 2004, the SIC announced that it would extend Earthstone $9 million in a convertible loan. What happened?
Documents in the SIC’s files reveal that promptly after being turned down by the SIC, Earthstone’s representatives began contacting other members of Richardson’s administration, particularly Rick Homans, who was then Richardson’s Economic Development Secretary. So, Governor Richardson, who exerts total control over the SIC, an entity that manages billions of New Mexicans’ taxpayer dollars, forced the SIC to go along with the Earthstone investment.
Unfortunately, as Scarantino reports, the story does not end with the loss of 9 million taxpayer dollars. Despite having not built its factory and not providing any new jobs for New Mexicans, Earthstone recently received another $3.5 million from the SIC.

New Mexico Sen. Jeff Bingaman, the only member of the Senate who will have a seat on both committees that are dealing with President Obama’s health care reform plan (Finance and Health, Education, Labor, and Pensions), had an article in Sunday’s Albuquerque Journal in which he laid out what he sees as some of the problems of our current health care system and solutions that he and his Democratic allies in Washington would recommend. So, what of the Bingaman plan? I’ll cite passages and analyze below:
1) “Health care costs are out of control because our system rewards more care, not better care.” Sure, resources in our current system are not allocated in an optimal manner, but Hayek pointed out the information problem more than 60 years ago. Will government do a better job at allocating resources than our current system under which more than 50 percent of health care spending is already done by the government?
2) “Uninsured rates are high, especially in New Mexico.” So, how about reducing mandates or allowing consumers to purchase care across state lines?
3) “We must clearly define what a basic insurance plan must cover. We must also end the practice of insurance companies denying coverage for pre-existing conditions.” I’m not sure where Bingaman gets off telling the rest of us what kind of health insurance options we should be able to choose from, but that mentality seems to pervade Washington and has for years. If I’m a college kid who wants just a catastrophic policy, is that “acceptable?” How about health savings accounts? Also, “guaranteed issue” will dramatically increase prices.
4) “Part of reform is making sure younger and healthier people are buying coverage.” Of course, guaranteed issue will force these younger, healthier people to subsidize those who take less good care of themselves and are older. How do you force these people into the system and is it really fair?
5) “The bill we send to Congress should shift us from a system that emphasizes ‘sick care’ to one that emphasizes prevention.” Of course this is a good idea. Perhaps if we deregulated the system so doctors and patients could contract with each other as one doctor tried in New York, we could achieve some of these laudable goals, but with insurance companies playing such an outsized role, this is not going to happen under any of the plans now under consideration.
6) Bingaman then argues for “Evidence-Based Medicine” but Twila Brase has demolished the case for that particular form of social control under which doctors are nothing more than assembly-line workers taking orders from the state.
7) Lastly, Bingaman argues that we need a “public option” to compete with private health insurance. This simply means that we will move quickly to fully socialized medicine over time. After all, government, subsidized with taxpayer dollars, does not “compete” on an even playing field with industry. Like Fannie Mae and Freddie Mac, the taxpayer-subsidized option has many advantages and will ultimately “crowd out” the competition.

Tea Partiers across the nation and here in Albuquerque are gearing up for the 4th of July Tea Party. While the Rio Grande Foundation will not be broadcasting live as we did on April 15 we will be supporting the efforts in spirit.
As the Tea Party movement grows and continues, organization will be key. To that end, our friends at the Michigan-based Mackinac Center have created a “Tea Party Activist Toolbox” which is full of helpful ideas for maximizing the effectiveness of the Tea Party movement. We at the Rio Grande Foundation stand ready to assist the Tea Parties throughout New Mexico in formulating policy and organizing to maximize their effectiveness.

To those who know anything about Albuquerque history, the idea of shifting a town may seem logical. After all, Albuquerque got its start at Old Town, but when the railroad came to town, downtown shifted to the current downtown which is known as “New Town.” All of this was done for market reasons, absent government subsidy. But that was the “good old days.”
Nowadays, the federal government — in this instance the Corps of Engineers — is more than happy to come in with hundreds of millions of dollars to move the town of Martin, Kentucky. Read the entire story from the Los Angeles Times here. All this for a town with a population of 633 according to the most recent census data. That is a subsidy of an amazing $138,000 per resident.
I don’t know if anyone has polled these people — wouldn’t be too hard with a population so small — but I’d think the Corps could probably convince them to move for $70,000 per person or less. And Obama wants to put the federal government in charge of health care and all energy-related decisions!
HT: PJ Chavez

Tune in to AM 1550 — New Mexico’s newest talk radio station which now has the call letters KIVA — from 9am to 10am this Saturday morning. Jim and I will be interviewing Richard Romero and discussing his run for Mayor of Albuquerque. Read a recent op-ed from Richard that appeared in the Albuquerque Journal.

With both anti-climate change and socialized health care legislation coming at us at the federal level, it is easy to forget what is happening at the state and regional levels. This is particularly the case with the Western Climate Initiative of which New Mexico is a part.
The Washington, DC-based National Taxpayers Union has written an excellent letter to John Huntsman, the Governor of Utah:

To inquire about the possibility that taxpayer dollars from states not supporting the WCI process, as well as federal funds, were used to underwrite this project against the wishes of several Governors….
These facts raise serious questions about the use of taxpayer funds in this effort from states that did not agree to partner in the WCI project – including Wyoming, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas, Idaho, Nevada and Alaska. In fact, it is difficult to see how this was not the case, given the extent to which WGA time, staff and resources were spent to support the WCI.

No surprise that taxpayer money given to an unaccountable bureaucracy would be used to finance a push for bigger government, but it is good to see NTU on the case.

Yesterday’s Windsor Star (Canada) had this article about a young man with cancer and his struggle to get treatment. Among other problems, the patient, Mark Hunt, had to travel four hours to Buffalo rather than Detroit which is right across the river from Canada. Notice, of course, that his only treatment options are in the USA. Big surprise there since Canada’s socialized medical system makes the cost of developing and offering innovative, high-cost treatments too high.
Hopefully our Congressional delegation takes stories like these into account when discussing and voting on President Obama’s “public option” for government-run health care.

Not surprisingly, much of the so-called federal “stimulus” is being allocated towards “green” projects. One such item here in New Mexico is the replacement of traditional road lighting with energy-efficient LED lights. Reporter Kate Nash of the Santa Fe New Mexican asked me about the merits of this plan and quoted me extensively in her recent article on the topic. Feel free to post your own comments here.

The powerpoint presentation is available here.

The most recent episode of “Speaking Freely” has been uploaded. This week, Jim interviews RGF Board member Vic Bruno regarding his upcoming event on June 24. For the rest of the show, Jim interviews District 5 City Council candidate Dan Lewis.
Lewis who is running against Councilor Michael Cadigan discusses why he is running to represent District 5 and his overall vision for the city.

When I picked up this morning’s Albuquerque Journal, I was stunned to see the headline, “Workers Sue over ‘Wage Tax.’” The story detailed a lawsuit being brought against the state by AFSCME, the American Federation of TEachers, the NEA, and other uniions who apparently feel that their members should be exempted from both economic reality and state law.
Certainly, New Mexico’s budget faces cuts given the tough economic times and the Legislature, aware of this fact and not wanting to raise taxes or lay off large numbers of government workers, decided to increase the amount government workers must contribute to their pensions. Certainly, this would not raise any eyebrows were similar cuts made in the private sector. After all, businesses have limited resources and when the economy goes south, layoffs, wage freezes, and benefit reductions are part of life.
But unionized government workers don’t live in the real world. Rather, they know that governments can be influenced politically — making it doubly impressive that the Legislature chose to place part of the burden for tough economic times on this politically-powerful lobby. Unfortunately, while it seems doubtful that the unions have much of a case, it would seem that their suit is designed to raise the costs, both political and financial, of such legislative actions by fighting the battle in court.
We at the Rio Grande Foundation have done a great deal of work on the issue of New Mexico’s bloated and overpaid government work force. Studies can be found here and here. Hopefully legislators stick to their guns, and realize that New Mexico’s bureaucracy remains bloated and a prime target for future cuts. There can be no doubt that well-financed unions — financed with New Mexicans’ taxpayer dollars — will fight to avoid any cuts and will do so every step of the way because they don’t live by the same rules we do.