Everyone wants a bailout these days. Once Congress and the Bush Administration made the misguided decision of bailout out AIG and the banking industry, every other industry — not to mention governments and individuals — decided that they deserved some money from the federal government.
In yesterday’s Albuquerque Journal, Christine Trujillo
President, American Federation of Teachers-N.M, made the case for a government “bailout” of education. While I couldn’t disagree more with her overall point, the truth is that she makes no factual argument for the “bailout.” Rather, she makes some pointless statements about societal changes that she argues make educating children next to impossible.
The biggest red-herring is that education suffers from inadequate spending. This is the argument some are making for a major gross receipts tax hike for additional education spending, even in these tough economic times. As Dr. Harry Messenheimer has pointed out, education spending per-capita has increased dramatically in recent years. Check page 6 of this study.
There is no need to bail out education with a tax hike of any kind. Instead, like the Big 3 automakers, education will be forced to improve and become more efficient with competition and by giving consumers greater freedom of choice.

At least that is what the folks over at the blog Urban ABQ believe. Apparently, we’re also intellectually lazy. But is it true?
Yes, we at the Rio Grande Foundation oppose the taxpayer-financed Albuquerque streetcar, the taxpayer-financed Rail Runner, and the taxpayer-financed Albuquerque arena. But does that mean we oppose “everything?” I believe the evidence points elsewhere.
For example, we support the Heritage Marketplace development which has been killed by the City of Albuquerque. Also, we’d support the parishioners at St. Francis Xavier Catholic Church who were outlined on the front page of today’s Albuquerque Journal. It turns out that the churchgoers would like to cook home-made food (tamales, menudo and homemade goodies like bread pudding and bizcochitosfor), but the City health regulators are forcing them to buy food instead.
The fact is that we at the Rio Grande Foundation support private sector efforts and realize that those who use and abuse government power by forcibly taking other people’s hard-earned money via taxation are pushing ideas that would otherwise not garner financial (as opposed to political) support from enough people to be viable.

Lobo football fans awoke this morning to find that their head football coach of the past 11 seasons, Rocky Long, had resigned. While the losing 2008 season was definitely tough on the coach, he made a point of stating that New Mexico football will never flourish until the fans decide to turn out in greater numbers to support the program. What does this have to do with public policy in New Mexico?
Well, Albuquerque’s political establishment is considering the construction of a brand new taxpayer-financed arena in downtown Albuquerque. Possible anchor tenants include an arena football team and a WNBA franchise. While studies are done with an eye towards justifying the expenditure, despite difficult economic times, the real question is “If you build it, will they come?” After all, Lobo Football is a Division I, “major league” product. If fans won’t support them, will they support women’s professional basketball?
The record is mixed. Fans turn out for the Isotopes and Lobo basketball, but not for the Thunderbirds minor league basketball, not for Lobo Football (at least not enough to make the team as successful as its <a href="<a href="http://themwc.cstv.com/"/”>Mountain West peers, and not for the Scorpions hockey team.
It is hard to say what makes the teams that succeed do so and why other teams lack fan support, but I don’t trust our City Council and Mayor to spend a bunch of our money to figure it out, do you?

Recently, I appeared on a special on Channel 4 called “The Climate Case” to discuss global warming and what, if anything, should be done about it. The show lasts 30 minutes and can be found below:
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Also, if the current fiscal crisis has any silver lining it is that Congress, according to New Mexico Sen. Jeff Bingaman, Chairman of the Energy Committee, says that Congress will not act until 2010 on global warming legislation. At least Congress recognizes that the American people view purported climate change as far less of a problem than the economy. Of course, whether government at any level has the right solutions is an even better question.

Regardless of how you feel about the results of the recent election, it would seem that taxpayers of all stripes should be concerned that government officials are able to tilt the balance of ballot elections by using tax money to advertise on behalf of those ballot measures. Opponents of higher taxes, like the Rio Grande Foundation, must rely on donated funds and are given no free resources or media platform to argue against these tax hikes and bond measures.
I wrote about this problem in this week’s edition of The Taos News.

According to KOAT TV:

The Albuquerque Downs are moving to Moriarty, and the city’s major hopes extra funding will come with it.
Mayor Adan Encinias is asking the state for $4.5 million to help cover infrastructure costs for the new racino. Plans for the track are complete, and this is the only issue standing in the way of breaking ground. The Downs president hopes to begin racing by the summer of 2010.

While I am completely agnostic as to whether or not the Downs should move, I find it hard to believe that Moriarty deserves $4.5 million of our tax dollars for the privilege of hosting the Downs. After all, isn’t state-sanctioned legalized gambling and horse racing supposed to be an economic boon for the area?
Rather than asking taxpayers in the rest of New Mexico to foot the bill for Moriarty’s infrastructure, perhaps they could leverage some of those future tax revenues in the form of bonds in order to pay for the needed roads etc. In the best of economic times, Moriarty’s case for $4.5 million of our tax dollars would be on shaky footing at best. In current, tough times when cutbacks are being made across the state, Moriarty should be asked to come up with something a bit more creative than fleecing the rest of us for their Racino.

It is no secret that cities all over the country including our own Albuquerque are facing mounting budgetary problems. Chicago just received $2.5 billion in exchange for leasing the airport to a private company. Once debt is paid off, Chicago is expected to receive $1 billion from the privatization.
Albuquerque’s Sunport is owned by the City of Albuquerque and receives taxpayer funding. There is no doubt, however, that a private, profit-making company could do a better job while also providing resources in the form of lease payments to the City. With impending belt-tightening including recent cuts of $15 million, Albuquerque’s elected leadership should consider painless ways to access needed funding.
The win-win for taxpayers is that they get a better-run airport and save money at the same time.

It is good to have fans. Check this letter out from yesterday’s Albuquerque Journal:

I FIND THAT the blatant bias of Leslie Linthicum’s (columns) is becoming more and more intolerable. Her editorial comments do not belong on the front page where a portrait of the (columnist) becomes more noticeable than the actual content. …
“Run on Guns,” was full of tongue-in-cheek gloating. She selected to scold the fringe of conservative thought such as religious bigotry and gun loving. She does not take into account the heart of conservatism that has been broken by people who “just don’t get it.”
Then she closed by preaching to us worried conservatives to stop wasting our time by being sore losers, closing with the admonition for us all to get along. Who selected her to be the conscious of the public?
I know she once said she could do as well as Sarah Palin, but I would like to see her credentials before I take her front-page grandstanding seriously.
I humbly recommend that you either put her on the editorial page where she belongs or you give equal front page time to Paul Gessing, who is one of the most thoughtful expositors of conservative thought that I have read in your newspaper.
SONJA BAUM Albuquerque

The Albuquerque Journal has apparently been receiving feedback to the effect that they have been carrying too much of our work. I’d like nothing more — and I think it would be great for the paper — if we did regular pro/con pieces with leftist organizations. Until then, keep those pro-RGF letters coming!

It looks like the endgame may finally be near for Albuquerque-based Eclipse Aviation. According to KOB TV, Eclipse employees found out that they won’t be receiving paychecks from their past two weeks of work. With no money to pay employees, it would seem doubtful that the company can go on much longer — how long would you keep showing up for work if you weren’t being paid?
As Jim Scarantino has pointed out, if/when Eclipse goes under, taxpayers will be out $20 million. Nonetheless, I sincerely hope that Governor Richardson and our “economic development” gurus don’t decide to double-down on this taxpayer loss by bailing out the failing company.
While it is sad that so many people will likely lose their jobs and New Mexico’s economy will take another body blow, the lesson learned must be that government’s role in economic development should be to create an economically-viable and equitable tax structure rather than attempting to pick and choose “winners” of government largesse. Those “winners,” like Eclipse, often are engaged in risky businesses that would otherwise not attract private investment and when times are tough, they are unable to survive.
Perhaps Eclipse will pull through on its own. It would be great if it does. Unfortunately, it is not looking good right now.

Now that he’s moving to Washington, DC, Barack Obama and his wife must choose where to send their girls to school. One might think based on his strong advocacy for government-run public schools and opposition to choice, Obama would put his children where his ideology is by sending his kids to DC public schools. Not surprisingly, that is not the case.
Rather, Obama is thought to be leaning towards sending his girls to a tony private school, perhaps the same one that the Clintons sent Chelsea to. It would be nice if all Americans had the same (or at least some) choice over educational opportunities.

Some of the figures below are truly shocking. According to the Institute for Truth in Accounting:
Since May 30, 2008, less than six months ago, the United States has added a stunning $1.2 trillion dollars to its already bloated public debt. Total debt now stands at $10.6 trillion while that portion held by the public and foreigners is up 20.6% in less than half a year.
“Since the time George Washington was president until Bill Clinton assumed the office, we had managed to accumulate $4.2 trillion in debt. President Clinton added $1.6 trillion and George Bush has increased the total by another $4.8 trillion” said Sheila Weinberg Founder of the independent Institute for Truth in Accounting.
“Beginning in the middle of the year, the federal government’s existing annual deficit has been increased by bank bail outs, insurance company rescues and by coming to the aid to automobile manufacturers and their unions.” Weinberg continued. “For the sixty million households that pay taxes, these government programs add more than $20,000 in future liabilities.”
Weinberg reminds us that the public debt is only a small part of the fiscal challenges that face Americans. “The real problems are the promises we have made to ourselves without a way to pay for them. These unfunded obligations are a consequence of Social Security and Medicare entitlements, primarily and they are nearly five times larger that the “official” debt. The total combination of debt and promises is a whopping $57 trillion or more than $188,000 for every man, woman and child. For taxpaying households, this is an obligation of nearly $900,000!”
For more information about the Institute please visit: www.truthinaccounting.org and www.truthin2008.org

Our elected officials have a way of taking advantage of Americans’ poor memories. As Robert Higgs points out, it seems like only yesterday that executives from the oil and gas industry were hauled before Congress and berated for supposedly “gouging” consumers. Fortunately for American motorists (and other energy users), prices continue to drop and, not surprisingly, Congress hasn’t thanked the industry.
Perhaps Exxon and BP will get a bailout too if prices continue their recent declines?

Over at Reason, there is a tally of the various federal bailouts — total damage about $2 trillion. Interestingly, the Washington Post recently ran an article quoting several economic experts who believe that the AIG bailout was ineffective. This latest news is not surprising considering that another major government intervention in the markets, the ban on short-selling, has been called ineffective by a range of experts as well.

We at the Rio Grande Foundation have been quite critical of the powers that be when it comes to economic development in Albuquerque. While some projects like the streetcar, Winrock Mall, and the downtown arena/convention center (to name just a few projects) receive special treatment in the form of tax breaks and taxpayer subsidies, other projects (like the Scientologists’ proposed building downtown) are given the runaround.
Now, SunCal, a company that has been involved in the fights over TIDD’s, has experienced the wrath of an Albuquerque government that seems to not care about jobs or economic growth at a time in which both are at a real premium. The New Mexico Business Weekly has an interesting article about SunCal’s Heritage Marketplace project, a 12-building, 20-acre, mixed-use development at Ladera and Unser NW.
According to the article:

SunCal and said two anchors were lined up for the project as designed by SunCal. To make the changes the city requires, it will add 15 percent to 20 percent to the project’s construction costs.
City planners had a different vision. They wanted the plan to conform to the city’s design guidelines, which call for open plazas with pedestrian and bicycle amenities in new shopping center developments. Strip center development is viewed unfavorably. The commission saw a more urban project with less parking and didn’t want the center to face heavily trafficked Unser Boulevard. SunCal argued it couldn’t attract retailers if their stores didn’t face Unser. Unser is a state road, Route 435, and new turn lanes are an issue.

So, we have a company, SunCal, that is looking to invest millions of dollars (without demanding subsidies) by building a new commercial development in Albuquerque and the City says “thanks, but no thanks” because the development doesn’t fit the hopes and dreams of a few bureaucrats….don’t you just love government?

Rep. Jeff Flake a Congressman from Arizona is one of the most intelligent and principled members in the United States Congress. He wrote an article in the Washington Post that appeared in the Albuquerque Journal today in which he laid out a plan for Republicans to re-take Congress by adopting principles of fiscal responsibility. Among Flake’s cures for what ills conservatives:

At the top of that list has to be a recommitment to limited government. After eight years of profligate spending and soaring deficits, voters can be forgiven for not knowing that limited government has long been the first article of faith for Republicans.
Of course, it’s not the level of spending that gets the most attention; it’s the manner in which the spending is allocated. The proliferation of earmarks is largely a product of the Gingrich-DeLay years, and it’s no surprise that some of the most ardent practitioners were earmarked by the voters for retirement yesterday. Few Americans will take seriously Republican speeches on limited government if we Republicans can’t wean ourselves from this insidious practice. But if we can go clean, it will offer a stark contrast to the Democrats, who, after two years in training, already have their own earmark favor factory running at full tilt.
Second, we need to recommit to our belief in economic freedom. Adam Smith’s “The Wealth of Nations” may be on the discount rack this year, but the free market is still the most efficient means to allocate capital and human resources in an economy, and Americans know it. Now that we’ve inserted government deeply into the private sector by bailing out banks and businesses, the temptation will be for government to overstay its welcome and force the distribution of resources to serve political ends. Substituting political for economic incentives is not the recipe for economic recovery.
Most House Republicans opposed the recent bailout and will be in a strong position to promote economic freedom over central planning as the Obama administration stumbles from industry to industry trying to determine which is small enough to be allowed to fail and which is not. Since timetables will be in vogue, perhaps Republicans could even insist on a timetable for getting the government out of the private sector.

Republicans here in New Mexico and nationally should heed Flake’s call for real change towards fiscal responsibility. Otherwise, they’ll be in the wilderness for a long time.

Around New Mexico we’ve had some interesting weather variations this fall. Well above average temperatures have been followed quickly by temperatures that are far below normal. Of course, unpredictable weather is nothing new. Interestingly enough while Obama, who has embraced Al Gore’s views on global warming, is going to be President, the planet seems to be experiencing cooler weather.
According to Investors’ Business Daily:
* In October, the Swiss lowlands received the most snow for any October since records began; Zurich got 20 centimeters, breaking the record of 14 centimeters set in 1939.
* In the United States, Ocala, Florida, experienced its second-lowest October temperature since 1850, October temperatures fell to record lows in Oregon and Boise, Idaho, got the earliest snow in its history.
* In the Southern Hemisphere, Durban, South Africa, had its coldest September night in history in the middle of the month, some regions of the country had unusual late-winter snows and New Zealand’s Mount Ruapehu had its largest snow base ever.
* The International Arctic Research Center reported in October that there was 29 percent more Arctic sea ice this year than last.
These are indeed anecdotal examples of a potential cooling trend, but those who are skeptical about warming should not have to bear the burden of proof. Rather, those who believe that global warming is a crisis need to prove: 1) that warming is taking place; 2) that it is a crisis of epic proportions; 3) that humans have caused it and human action can resolve it. Anything short of proving those three hypotheses should lead objective observers to question whether we need to abandon Western Civilization as Al Gore would have us do.

Are you feeling down? Honestly, after last night, my feelings are mixed. At the national level, the Republicans got what was coming to them. They increased the size of government (No Child Left Behind, Medicare Prescription Drug Bill, out of control defense spending, to name just a few examples) and governed with more hubris than I’ve seen in a long time….and that’s saying something for politicians. So, I fully expected Obama’s victory and tough sledding for Republicans running for Congress, regardless of their personal merits.
It is unfortunate that Republicans in the Legislature and in local offices were also swept away in the tsunami because “change” in New Mexico would require a shift to the right, not the left. Instead, New Mexico’s big-government majority has been strengthened and emboldened with primary victories over moderate Democrats and an Election Day shift to the left as well. We’ll see what happens with Governor Richardson more than likely leaving for an appointment to the Obama Administration.
Regardless of yesterday’s results, we know that free markets and limited government work and have worked around the globe and throughout history. If you are discouraged about the direction we are heading as a nation, read the following from Larry Reed, formerly of the Michigan-based Mackinac Center, now of the Foundation for Economic Education.

For all of us who believe in liberty, yesterday’s ballot offerings all over the country were hardly inspiring. Predictably, the results this morning may be more than a little dispiriting. Just in case you might be feeling somewhat “down” at the moment, let me offer what I hope will be some cheerful thoughts.
Eternal optimist though I am, I admit that when I looked at the morning papers the pessimist temptation briefly had me in its grip. Then I asked myself, “What good purpose could a defeatist attitude possibly provide? Will it make me work harder for the causes I know are right? Is there anything about liberty that yesterday’s election disproves? If I exude a pessimistic demeanor, will it help attract newcomers to the ideas I believe in? Is this the first time in history that believers in liberty have lost some battles? If we simply throw in the towel, will that enhance the prospects for future victories? Is our cause so menial as to justify deserting it because of some bad news or some new challenges? Do we turn back just because the hill we have to climb got a little steeper?
I think you know the answers to those questions.
This is NOT the time to abandon principles. I can’t speak for you but some day I want to go to my reward and be able to look back and say, “I never gave up. I never became part of the problem I tried to solve. I never gave the other side the luxury of winning anything without a fight. I never missed an opportunity to do my best for what I believed in, and it never mattered what the odds or the obstacles were.”
Let’s remember that we stand on the shoulders of many people who came before us and who persevered through far darker times. I think of the brave men and women behind the Iron Curtain who resisted the greatest tyranny of the modern age, and won. I think of those like Hayek and Mises who kept the flame of liberty flickering in the 1930s and ‘40s when the whole world must have seemed mad for statism in one form or another. I think of the heroes like Wilberforce and Clarkson who fought to end slavery and literally changed the conscience and character of a nation in the face of the most daunting of disadvantages. I think of the patriots who shed their blood for American liberty and suffered through unspeakable hardships as they took on the world’s most powerful nation in 1776. I think of martyrs of the Reformation. And I think of the Scots who, 456 years before the Declaration of Independence, put their lives on the line to repel English invaders with these stirring words: “It is not for honor or glory or wealth that we fight, but for freedom alone, which no good man gives up except with his life.”
As I thought about what some of those great men and women faced, the obstacles before us today seemed rather puny. I’m ashamed that for a moment I let a little election get me down.
If you want my advice, we should not squander a second feeling bad for ourselves. This is a moment when our true character, the stuff we’re really made of, will show itself. If we retreat, that would tell me we were never really worthy of the battle in the first place. But if we resolve to let these tough times build character, teach us to be better and smarter at what we do, and rally our dispirited friends to new levels of dedication, we will look back on this occasion some day with pride at how we handled it. It’s already past 9 am. Have you made any calls to cheer anybody up yet?
Believe me, the folks who for the moment are basking in victory and salivating for the opportunities they may soon have to deploy more force and coercion in our lives are not divinely-inspired geniuses. They are not going to be the first bunch in the history of the planet to figure out how to make big government work. They are far more likely, in fact, to give those who believe in liberty some unique opportunities to drive home our arguments with more eloquence and effect than ever before. When they flop, will the right ideas be lying around, ready to go, to make change for the better? That depends on us. Will we rise to the occasion?
Use this time to think about how you can do more for liberty and do it better, reaching larger audiences in ways that turn lights on people’s minds. Support others who are working full-time on liberty’s behalf. INspire, don’t EXpire!
So in the course of a few hours, I’m happy to say I’ve traversed from a moment of despair to a smile and a sunny optimism, to an eagerness to accept the challenge and get down to work. To all those out there who are hoping people like you and me will go quietly into the night, just keep thinking that. You’re in for some unexpected surprises.

I’ll be discussing the election results on Albuquerque’s KUNM public radio station 89.9 FM and Artesia’s KSVP 990AM. Tune in!

I appeared on Channel 7 News last night on the 10pm broadcast to discuss reasons why voters should oppose the 1/8th cent tax hike to fund a portion of the Rail Runner’s operation costs and some new bus service. An article on the tax hike is available here. Not sure when/if video will be posted on their site. I believe that the vote will be quite close.

Still wondering what to think of the myriad ballot measures on the ballot this Election Day? Check out this article which discusses the measure and the concept of raising taxes in the current economic downturn. The article appeared in both the New Mexico Free Press and the Roswell Daily Record.

Regardless of what happens on Election Day, New Mexico is facing a tougher economic climate than it has faced in quite some time. We will be front and center with solutions to reduce the budget and ensure that economically-devastating tax hikes are not foisted on already reeling New Mexico taxpayers.
To this end, we have been critical of the state’s giveaways to the film industry. More articles and analysis are available on our website and blog. Recently, I found an analysis from the Arrowhead Center which is the economic research arm of New Mexico State University. Unlike so many other economic “analyses” done in this state, the Arrowhead Center takes a clear and unbiased look at the New Mexico film industry.
Some of its findings are not pretty and, not surprisingly went unreported in the media. Regarding the state’s 25% film production rebate (filmmakers receive 25% of their taxable expenses back as a rebate from taxpayers), meaning if you take your film crew out to dinner after a shoot and spend $1,000, New Mexico taxpayers pick up 25% of the tab. According to the study:

During fiscal year 2008 the NM government granted $38.195 million in rebates. The resulting increase in economic activity generated $5.518 million in revenues. The implied return is 14.44 cents on the dollar. This means that for every one dollar in rebate, the state only received 14.44 cents in return.

14 cents on the dollar? Even if you are not good at math, it is clear that the film industry tax credit is nowhere close to paying. Rather than wasting money on film subsidies, we should have been cutting taxes on all New Mexicans. With a fiscal crisis in the making, the least the Legislature can do is cut this program back significantly.

The story of an 83 year old California woman Ageda Camargo is unbelievable and truly scary for anyone who cares about property rights. She is from La Quinta, CA and has owned her house for years, before La Quinta was even a city. When she bought her house, it had a third bedroom that was originally a garage. Now they are threatening to put her in jail if she doesn’t change the room back to a garage.
Of course, the city is not offering to refund Camargo the additional taxes she’s paid all these years for the additional living space. Thankfully, I haven’t heard any stories like this from New Mexico, but one never knows what government bureaucrats will do next.

Yesterday I blogged about the “study” that was recently released in order to help justify the construction of an arena/events center in downtown Albuquerque. In my posting, I noted that the information in the “study” was not objective, but was designed instead to justify its construction.
Of course, while our arena faces its own unique issues, other cities have also fallen prey to arena/events center boondoggles sold by the convention and tourism industry. Check out this very interesting story from the New York Times about the failed Pyramid in Memphis.
Among the interesting factoids regarding the arena is the price tag of “only” $68 million ($109 million in today’s money according to the Bureau of Labor Statistics). This is obviously far less than the $400 million number being tossed around for the Albuquerque equivalent.
Also interesting is the divergence of opinion between regular people and those who are paid to promote these kinds of projects. Check out the quotes below:

“It’s quite a striking feature on the skyline,” says Ed Frank, the president of the West Tennessee Historical Society. “But as a citizen and as a taxpayer, it was a waste of money to build the Pyramid on low ground there. I have gone to events there, and I can say I’m not that impressed by the feeling inside.”
But Kevin Kane, the president of the Memphis Convention and Visitors Bureau, says the charm of the Pyramid depends on where you stand. Yes, it is a monument to failed dreams. But it also helped to energize downtown Memphis, he says. “From my view, the Pyramid more than paid for itself many times over.”

Perhaps we can just abolish the taxpayer-funded Albuquerque Convention and Visitors Bureau? After all, if they are just going to be shills for taking more taxpayer money, why should we pay them?

In what has to be considered the least surprising news story of the day, one of the myriad studies from consultants hired to sell er…study the downtown arena has been released. The study, done by a firm called Conventions, Sports, and Leisure, found that the market characteristics for the proposed $400 million arena are “very favorable.” I did some googling on this firm and (not surprisingly) found that they are a rubber stamp or cheerleader for taxpayer-financed development.
By no means are they an objective source of information. Check out this report on the proposed Durango convention center. Among other red herrings and factual mis-steps the document states that “the overall convention and trade show industry reflects stability and annual growth.” This is simply not accurate. As this study from the Brookings Institute points out “The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections.” Conventions, Sports, and Leisure is papering over this inconvenient truth.
The Albuquerque study, the executive summary of which can be found here has its share of red herrings as well. My favorite is that the proposed event center’s location near the Rail Runner station would help make it a success. Downtown Albuquerque is such a night spot that according to the schedule available on the Rail Runner website there are no evening Rail Runner trains currently in operation. In fact, the last trains leave at 6:30pm.
Since most sporting events don’t start until 7pm or 7:30, this will have to change. One way or the other, taxpayers will be footing the bill both for the events center and for the Rail Runner to run late into the night. Of course, since the trains only run at one-hour intervals, if you miss your train, you’ll have plenty of time to hang out. The whole thing is a boondoggle on top of another boondoggle!