We at the Rio Grande Foundation certainly did not and do not support the so-called stimulus bill. Of course, with the fear factory in Washington working at a feverish pace and President Obama still in his honeymoon period, Congress caved in and gave him the nearly $800 billion in spending he wanted.
Of course, this did not stop the legislation from passing. But that doesn’t mean that all is lost. Money is going to be spent, so New Mexicans might as well benefit somewhat from this debacle. To that end, check out the New Mexico projects at this site called Stimulus Watch. You can then click on your area and individual projects and vote for the ones you think are either critical or not critical. As you can tell by going to the site, the voters seem to have a better grasp on what is important than their elected leaders. For example, the Paseo and I-25 interchange has been labeled a high priority by voters while the Albuquerque arena and streetcar have justifiably been categorized as low priorities.
I don’t know that the politicians in charge of spending this borrowed money will go to the Stimulus Watch website and peruse the results, but they would be smart to do so. Anyway, given the lack of control average citizens will have over how this stimulus money is used, it certainly wouldn’t hurt to try to influence them in this way.

One of the most frustrating aspects of working in public policy is the vast number of policy advocates out there who advocate undertaking policies on behalf of some public good (like attracting more doctors to New Mexico), but fail to realize that their preferred policies, if enacted, would have the exact opposite effect from what they advocate and wish. One recent example of this is the policies advocated by Frank G. Hesse, M.D., Chairman of New Mexico’s Health Policy Commission who wrote about the need for more doctors in New Mexico in the Albuquerque Journal.
While going through all the dire numbers about the absence of doctors, dentists, and other providers in New Mexico, he concludes saying, “There is a great hope that a universal health insurance program will be adopted, improving health care.” This sentence certainly made me do a double take. As we pointed out in a policy paper, “Governor Richardson’s Health Care Plan:
Enslaving Physicians and Destroying Private Health Care” which analyzed Governor Richardson’s original “universal” health care proposal, his plan contained price controls, including strict controls placed on doctors’ salaries, which would simply chase more providers out of state.
It is true that a socialized health care scheme enacted on a national basis might not have the immediate impact such a plan would have were it enacted in New Mexico only, but it seems hard to believe that working for the federal government is an attractive option for most doctors and those students now exploring making a costly investment in medical school.

If you read this blog regularly, the postings on the topic of education will begin to sound like a broken record. Unfortunately, the key word is “broken” as our educational system is. More evidence was provided recently b the findings of the American Legislative Exchange Council, the limited government-oriented national legislative umbrella organization based in Washington, DC.
That organization’s recent study, the 15th edition of their “Report Card on American Education,” shows that New Mexico’s K-12 government-run education system is not only behind other states, but is falling further behind as time passes. According to the New Mexico-specific pages of the study which can be found here, The Land of Enchantment has fallen from 43rd to 48th since 1998 in ALEC’s overall ranking. This, despite a more rapid increase in per-pupil spending than was found in other states (42% to 36.6%). Of course, this has not deterred New Mexico’s educational establishment from demanding still more money to pour down this rat hole.
One would think that beating out only Hawaii and Mississippi among the 50 states would be enough to encourage New Mexico’s political establishment and citizens to demand immediate change, but so far this session, SB 355 which would establish a system of education tax credits, has languished without so much as a committee hearing. Hopefully this changes quickly before another lost generation of New Mexico children is failed by the government school monopoly.

The Federalist Society for Law and Public Policy Studies in conjunction with the University of New Mexico School of Law are hosting a lecture by Antonin Scalia Associate Justice, United States Supreme Court Tuesday April 14, 2009 3:00 pm at the Albuquerque Convention Center
Registration is free and available here.

New Mexico may be facing a major budget crisis, but pet projects die hard. In December, the Rio Grande Foundation published our 2008 Piglet Book which discussed dozens of ways in which New Mexico policymakers might trim spending when facing a $600 million deficit.
Some of the projects mentioned in the Piglet Book have been debated. First, there was the $22.3 million equestrian facility for which half of the money was cut out to fund last year’s deficit. Now legislators are discussing whether to eliminate taxpayer funding for the $1.4 million recital facility the Santa Fe Opera plans to build. While cutting such frivolous spending would seem to be an easy decision and perhaps unconstitutional, Speaker Ben Lujan has defended the project saying it will “benefit the state.”
While New Mexico families — especially those recently laid off by Zangara Dodge and Eclipse Aviation — New Mexico legislators refuse to make even the most basic cuts in wasteful spending projects. Do we really have an economic crisis in this state or do some of our legislators simply not understand?

Recently, I blogged about the arrogant and ignorant comments made by Ellen Bernstein, the head of the Albuquerque Teachers Federation. Basically, Bernstein told the business community to “sit down and shut up” if they don’t support higher taxes for education.
While New Mexico’s beleaguered and small business community, particularly the Albuquerque Chamber, has repeatedly sold out over the years, perhaps they are turning over a new leaf under the leadership of car dealer Don Chalmers.
The most important example of this turnaround is the fact that the Albuquerque Chamber was among the groups criticized by Bernstein and the fact that, at least to date, the Chamber has remained firm in its opposition. A recent op-ed in the Albuquerque Journal by Chalmers and Cole laid out the Chambers’ very good reasons why the business community should have a tremendous say in our educational system and how it is funded.
Here’s hoping the business community remains engaged and opposed to these unnecessary and economically-harmful tax hikes.

While it has been little-reported in the press, at its meeting on Wednesday the 18th of February, the Albuquerque City Council will be discussing a ¼th cent “tax increase.” The bill which numbered and called “Transportation Infrastructure (O-08-63)” would extend the ¼ cent Gross Receipts Tax surcharge , which is set to expire in a few months, for an additional 6 months.
While an additional 6 months may not seem like a very big deal to some, the fact is that voters only narrowly approved the ¼ cent “temporary” tax back in 1999. Of course, once government gets a hold of a new source of taxpayer money, they are loathe to give it up, so it certainly appears that supporters of this effort are planning to make the tax permanent without going to the voters. Passing a six-month extension at a time of tremendous economic difficulty and without going to the voters would seem to be simply the first step in that direction.
If you can’t attend the meeting on Wednesday and tell your councilors what you think, get in contact with them here.

As if there were not enough reasons to be concerned about the so- called “stimulus package” (you can read it here) now being consideration in Congress, the legislation contains “Buy American” provisions that could start a trade war. Check out this article on the reaction from Korea.
Stifling free trade — and potentially igniting a trade war — would be a great way to extend the current malaise. As one economist pointed out in the aforementioned article, “If we only buy American, we’ll probably pay more for inferior goods.” That may create some jobs for Americans in the short-term, but it will hurt our standard of living even more than the current downturn has.
The Great Depression was ignited in large part by Smoot-Hawley tariffs which imposed the highest tariff increase in US history. I hope our political leaders are smart enough not to repeat that mistake in this spending package.

It never ceases to amaze me how frequently articles get published in the Albuquerque Journal on particular issues with little or nothing in the way of empirical evidence for that particular point of view. You may disagree with the Rio Grande Foundation perspective, but at least we back up our arguments with facts and examples rather than mere conjecture. The article, “Health-Care Reform the Best Stimulus,” which appeared in the paper on Monday is a perfect example.
The article approaches the health care issue in a rather conventional way talking about the cost of care and the number of uninsured, but that’s about it as far as the problems and causes of our current health care system are concerned. A quote from President Obama is then trotted out:

“Obama himself has acknowledged the need to reform health care and invest in publicly funded programs to help alleviate the financial crisis. “The time has come — this year, in this new administration — to modernize our health-care system for the 21st century; to reduce costs for families and businesses; and to finally provide affordable, accessible health care for every American.” He added that health reform, “has to be interwoven into our economic recovery program…This can’t be put off because we’re in an emergency. This is part of the emergency!”

But that’s it. The authors recommend that New Mexico create a supposedly “independent” Health Care Authority as the solution, but make no mention of the exact policies that would save money and insure larger numbers of New Mexicans (or Americans for that matter). Rather than empowering an authority imbued with mythical powers and the ability to remain independent of political considerations despite the fact that literally billions of dollars are at stake, here are some real solutions for our health care problems that, if adopted, would improve our health care system.
Of course, the authors of the article give no specifics about how their plan would stimulate the economy, but at least our proposed solutions are limited to health care, not solving our entire economic situation.

Economist Scott Moody recently analyzed state and local government employment for The Rio Grande Foundation. An opinion he wrote on his findings is available here.

The New Mexico legislature has announced that it will be decreasing government funding across the state, which will effect spending on public schools. This has created an uproar among many people who believe that the solution to our education problem here in New Mexico is to give more money to schools. Toward the end of last year members of the New Mexico education board proposed a so-called solution, a one percent gross receipts tax increase to help aid public school funding.
Unfortunately, the only thing that the tax increase will do is create more of a tax burden on New Mexicans and New Mexico-based businesses during difficult economic times. Despite the money which the state plans to spend on government schools, study after study has found little to no correlation between better education and more government funding.
It’s easy to understand why it would be popular to increase education funds; more money should mean more books, better teacher pay, better facilities, and an overall better education. The problem within New Mexico’s education system cannot be solved by an increase in taxes. Certainly a cracked desk or a leaky roof has never caused a child to under-perform. Change must come from somewhere other than an increased supply of government money. It must come from a school’s drive to improve its quality and the realization on the part of parents and students that the educational product being provided is extremely valuable. This is not currently the case.
One option for improving this situation is to offer tax credits to students in low-income families. Parents can utilize tax credits when they decide to place their child in a school that is either private or outside of their district. Although this means that a child may have to travel longer distances to get to school, the benefits outweigh the losses. In the end the child gets a better education. After all, parents would not make the extra effort to get their kids out of the government-run school (and pay a portion of the new school’s tuition) if they were not receiving a superior education.
This tax credit proposal, which has been introduced in the Legislature as SB 355 by Sen. Pete Campos (D), is a more optimal solution than the proposed increase in sales tax. Tax credits affect only those parents who are paying the school fees. Furthermore, it creates competition without privatization. Schools will have incentive to improve, because parents have more options. Although tax credits will not solve all of our public school’s problems, they are a step in the right direction without wasting still more tax dollars.
New Mexicans must shift away from the belief that more money necessarily means better education, toward the idea that a smart use of resources and planning can guarantee better results.

I just love New Mexico’s education bureaucracy and the people who defend it. Now, as I’ve discussed previously, the education establishment is pushing for a massive tax hike to fund even more wasteful spending — this despite the fact that the educational system is set to receive a massive cash infusion from the federal stimulus package.
Anyway, as the tax hike bill (in its current form it would increase both the gross receipts and personal income taxes), HB 346, began moving through the Legislature, New Mexico’s usually acquiescent business community showed signs of life and opposed the tax hikes. That is when things started to get interesting.
According to this article from the ABQ Journal, the head of the Albuquerque Teachers Federation said of the business community “They have no business in the education business…they either need to support the kind of funding education needs or they need to be quiet.” There are so many things I could say about this extremely arrogant statement:
1) Given New Mexico’s near 50% dropout rate (second worst in the nation), it would seem that the teachers’ unions and education experts aren’t exactly doing the job;
2) New Mexico has dramatically increased per-pupil education spending over the years, so money may not be the answer (check out page 6 of this study);
3) Since businesses and their consumers will foot the bill for higher taxes, shouldn’t they have a say in whether they are raised?;
4) When did we decide that teachers’ unions were the final authority on education anyway? After all, unions don’t run United Parcel Service and it certainly seems that the unions have not done much for GM, Ford, and Chrysler. When did we abdicate the education of our children to a union that is primarily concerned with increasing teacher salaries, increasing their own membership, and preventing non-union competition?
5) If there are lawsuits over the supposed “adequacy” or lack thereof of New Mexico’s educational offerings, shouldn’t we at least objectively define “adequacy” first? Perhaps choice would make New Mexico’s schools more adequate? Why is more money the only answer (see question 4 for the real reason).
Hopefully the business community stands its ground. We’ll be there providing intellectual ammunition to opponents of this incredible boondoggle.

Has the current economic crisis been caused by “an unregulated free market” as some in the media would have us believe? To a libertarian or small-government conservative, the answer is clearly “no,” but specifically listing the many ways in which government policies have led us down the current, destructive path is another matter. This is a great posting that explains how we got here and the myriad ways in which the supposedly “unregulated free market” has been undermined and twisted by government policies.

Recantly, the Albuquerque Journal, New Mexico’s largest newspaper, included a letter to the editor from a reader who decried the “failure” of our “free market” health care system. To anyone famililar even in passing with American health care, this concept of a freewheeling, un-regulated health care marketplace might seem to be in stark contrast to the heavily-regulated system now in place.
I pointed out these simple facts in a published response to the letter which can be found below:

In a letter to the editor, Richard Mason recently labeled our health care system “an unregulated free market.” He argued that legislation introduced in the 2008 legislative session that would have created a New Mexico Health Care Authority that Mason argues would solve our problems. Unfortunately, he doesn’t explain exactly how this system would lower costs and improve access to care.
The assertion that our health care system is “free market” is baffling. I don’t have enough time and space to list all the ways in which government intervenes in health care, but here are a few of the big ones: Government spending via programs like Medicare and Medicaid to name just two, accounts for 46 percent of all health care spending. 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. States also regulate care, thus piling on costly mandates. New Mexico has 51 of them.
On the supply side, licensing and other regulations enacted at the behest of the medical profession have constricted the supply of doctors and other health-care professionals. Many states also require “Certificate of Need” permission from the government prior to construction or expansion of certain health care facilities.
The fact is that while we don’t face a truly “socialized” health care system as seen in many other countries our health care system is not a “free” market. Before using government to “cure” our health care system, it would behoove all of us to become educated on the ways in which current government policies increase costs and reduce the availability of care.

Recently, our investigative journalist Jim Scarantino reported on the State Investment Council’s misguided investment in the Small Smiles dental chain. I also published on op-ed on the subject.
In his follow-on report on the State’s investment in Small Smiles, Scarantino dug deeper and even requested emails from New Mexico’s top investment officers in which these highly-compensated officials express complete ignorance of how they are investing taxpayers’ money. This is just the tip of the iceberg. The SIC has not adequately tracked its investments on behalf of New Mexicans’ and the problems are beginning to bubble up. Stay tuned!

A few weeks ago the Rio Grande Foundation and CARE hosted global warming expert James Taylor at events in Albuquerque and Santa Fe. The event was a great success, but if you were unable to attend (or even if you attended, but you want to view it again), you should take 5 minutes to check out Taylor’s powerpoint presentation.
As Taylor makes clear, wind and solar are quite heavily subsidized while nuclear, coal, and oil receive relatively few subsidies (our belief is that most all subsidies are bad). Ultimately, as Taylor clearly shows in his presentation, government policies that force the economy to create “green jobs” will come at a heavy price in the form of lower living standards and increasing poverty. Unfortunately, as I wrote recently, President Obama doesn’t seem to realize this just yet.

As I wrote about over the weekend, the so-called economic stimulus now being considered by the Senate is full of waste and pork. This kind of thing is to be expected any time Congress decides to start spending money on a wish list of projects that would otherwise not be funded. Of course, as the folks at the Cato Institute point out, most good economists will admit that artificial government-induced stimulus packages don’t really work.
The stimulus bill would be bad enough if it just wasted money and stalled our economic recovery, but real, harmful policies are being foisted on the American people. One of the most troubling such policies is a provision that would essentially nationalize your medical records.(how this is an economic stimulus is beyond me, nevertheless…) According to the folks at the Institute for Health Freedom, the stimulus bill would require :

* “The utilization of an electronic health record for each person in the United States by 2014.”
* “The National Coordinator shall perform the duties…consistent with the development of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information and that…facilitates health and clinical research…”
The federal medical privacy rule promulgated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) already permits the disclosure of personal health information without patient consent for treatment, payment, and oversight of the healthcare system. The stimulus bill fails to restore patient consent, while at the same time, mandating electronic health records and facilitating the electronic exchange of every American’s health information.

Regardless of the merits (or lack thereof) of electronic health records, your health information will no longer be your own under this plan. Since information is power, is it any stretch to say that this is the first step to nationalized health care?

Most New Mexicans are abundantly aware that the Rio Rancho Star Center has quickly turned into a white elephant. The City of Rio Rancho recently took over management of the facility, in part because the Center has lost an astounding $580,000 since it opened in 2006 (this does not include the $36 million in bonds floated to finance the arena). Not to be outdone, Albuquerque Mayor Marty Chavez wants Albuquerque to build an arena of its own and is looking for a handout from Washington to do it.
As if to symbolize the waste that often results from investment in sports arenas and stadiums, it was reported today that the famous “Bird’s Nest” stadium where the Olympics were held is being abandoned and turned into a shopping complex. So much for China as a role model! Rather than wasting taxpayer money on centrally-planned boondoggles, arenas, like most other projects, should be built by the private sector when there is adequate demand. Otherwise, our governments will waste massive amounts of our tax money ($450 million in the case of the Bird’s Nest)

Professor Allen Parkman over at the University of New Mexico is one of the most sensible academics I’ve ever met. He has an excellent article in today’s Albuquerque Journal discussing the federal stimulus boondoggle now moving to the US Senate.
As Parkman writes: “Under normal circumstances, there are pressures for the federal government to consider the benefits and costs of projects. That is less likely with the stimulus plans. The federal government is going to spend funds on a lot of projects. Some will be highly desirable, some less desirable, and some — in retrospect — probably undesirable in an attempt to stimulate the economy and create jobs. Seldom will efficiency — benefits versus costs — be a concern.”
Congress should abandon this costly and unwise stimulus and instead let the economy recover on its own terms in the absent of additional government meddling.

A few weeks ago, in the wake of Governor Richardson’s “pay-for-play” scandal, the Wall Street Journal contained an article outlining some of the political scandals facing New Mexico and discussing ways in which the state’s open political process has created problems for the state’s political culture.
As part of the Rio Grande Foundation ongoing efforts to promote transparency in New Mexico government, I point out in a letter to the editor, published today, that New Mexico suffers from a lack of transparency moreso than a lack of ethics and that legislators have successfully kept the entire system opaque and citizens’ ignorant through a lack of information.

With the Legislature in session, I plan to use this space from time to time to point out a few crazy ideas out of Santa Fe and a few that I believe are worthy of support. While the two I am listing here should appeal to free marketers, given the current legislative makeup, straight “conservative” bills probably won’t go very far, so I believe these will have a broader appeal.
1) SJR 1 introduced by Sen. Bill Sharer. This resolution would, if approved by the voters, amend the New Mexico Constitution to preserve the right of all New Mexicans to purchase their own health care. This is the ultimate check against socialized medicine. In fact, in Canada where socialized medicine is the law of the land, this right was only recently restored and only in one province, Quebec. As Brian Day, past president of the Cambie Surgeries Corporation, which operates a private surgery clinic in Vancouver states in the article:
“Access to a wait[ing] list is not access to care.” He estimated there are 75,000 people on B.C. waiting lists and more than a million in Canada.
2) The other bill of interest to those who are truly concerned about good and ethical government is SB 334 which has been introduced by Sen. Mark Boitano. As I wrote in the Albuquerque Journal a few months back, allowing governments to use taxpayer money to promote ballot measures (almost always on behalf of bigger government) is extremely dangerous and unfair to those citizens and grassroots groups who cannot suckle at the government teat.
These are just two examples of reasonable proposals to improve the state of New Mexico. I’ll be posting more examples, both good and bad, as legislation is introduced. A great place to track these bills and find out additional information is our legislative tracking site www.newmexicovotes.org.

It looks like the stars may finally be aligning for improved transparency in New Mexico government. Rep. Janice Arnold-Jones is leading the charge by filming committee hearings in the House. Sen. Mark Boitano too has been a leader on the issue in his chamber where a majority of the body supports filming legislative floor sessions. Of course, as I point out in this op-ed, open government goes beyond filming legislative sessions.

There is an effort underway including legislation sponsored by a bi-partisan group of legislators (led by Sen. Kent Cravens) that would create a searchable, online database of government spending.
Similar legislation, which was championed by then Sen. Barack Obama in Congress, has resulted in the creation of a database of federal spending. Seventeen states have created similar databases with many other states now considering similar legislation.
Enabling average citizens to log on to their computers to find out where their money is going and to whom will not only enhance government transparency, it will allow each of us to become our own government spending watchdog, thus making sure that government is spending taxpayers’ money appropriately and effectively.

While much of the attention on health care has shifted to Washington and the Obama Administration, there is still action taking place in the states. Governor Richardson, having largely failed to impose his original vision of bureaucratically-managed health care on New Mexico, has revised his plans and come up with a new “streamlined” health care plan.
Richardson recently unveiled a series of health care bills that will be introduced during the 2009 session. Among the initiatives he has planned are:

It would require agencies that buy insurance for public employees and retirees to work more closely together to save money, but it would leave the agencies themselves in place;
Increase use of electronic medical records;
Require insurance companies to spend 85 percent of premiums on health care and restrict premium increases over time; and
implement “guaranteed issue” policies that would force insurance companies to insure individuals regardless of medical condition

First and foremost, while they sound like a great idea, forcing doctors to shift to electronic records is not a panacea for our health care system;
Unfortunately for us, Richardson seems hell-bent on increasing costs and degrading patients’ ability to obtain coverage. Demanding that insurance companies spend 85 percent of their premium collections on patients simply reduces the incentives insurance companies have to appropriately administer coverage to their customers.
“Guaranteed issue” regulations are another bad idea. They have been found to increase the cost of insurance by 23 percent in the first year and 50 percent higher during the second. Increasing costs ultimately drive young and healthy people out of the marketplace.

I for one and willing to give Obama a chance. Certainly I have deep concerns about some of the rhetoric he used in his campaign, but given some of President Bush’s relatively pro-market rhetoric which did not result in sound economic policy, I was/am rather willing to take a wait and see perspective. Unfortunately, one of Obama’s first proposals as president is absolutely terrible and, given the economic realities facing the nation and in particular the automobile industry, will go a long way to preventing a recovery, thus pushing more American workers into unemployment lines.
Obama’s proposal is outlined in this article, but to summarize, it would allow California and more than a dozen states to impose tougher auto emission standards on carmakers to fight greenhouse gas emissions and new fuel-efficiency requirements to cover 2011 model year vehicles that would require the auto industry to boost efficiency by 40 percent to at least 35 miles per gallon by 2020. The firm IHS Global Insight estimates that these regulations would drive up the price of a new car by $2,000 to $10,000 per automobile. Driving up the price of a new car by 50% or so hardly seems to be an economic stimulus for America, but given Obama’s radical views on energy and global warming, it is hardly surprising that one of his first proposals is to lash out at a struggling industry.
For more on Obama’s radical views on global warming, check the following short video out from our friends at the Citizens Alliance for Responsible Energy.
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