If you have ever seen the excellent film “Commanding Heights,” you are probably familiar with the “Permit Raj” which held India’s economy back for more than 50 years.
A story in today’s Albuquerque Journal (subscription required) reminded me that the “Permit Raj” is alive and well here in our own over-regulated city. First, “an unexpected city requirement triggered a two-month delay in the water park project at what is now the Park Plaza Hotel and Conference Center.” Apparently, the issue related to an “unexpected regulation” from the city that forced the developer to increase the number of public restrooms and showers. This may not seem like a huge deal to those who don’t understand major construction projects, but a two month delay can be costly. Whether the regulation is justified or not, it would seem that the City’s building codes should be clear enough that this doesn’t happen.
In another example of out-of-control regulation, the City has put a hold to renovation of the Wyndham Hotel at 2910 Yale SE. The 276-room Wyndham sits on land owned by the city as part of the Albuquerque International Sunport campus. As a result, the hotel operator must lease the land from the city. In and of itself, this is not a big deal, but now the developer has been told that the City wants to assume the roles of lender and hotel franchiser in the ground lease, neither of which was included in the letter of intent. The relationship requires the owners to provide detailed financial reports on the hotel’s operation, thus bringing problems of proprietary information and competition.
The City of Albuquerque needs to stop playing ridiculous games and instead work to promote and support business development, not scare it away. Otherwise, why not just move to Rio Rancho?

It’s been 15 years since the North American Free Trade Agreement became law and, while the agreement has been extremely helpful for Canada, Mexico, and the US alike, political opposition has stalled a few key provisions including the legalization of Mexican truckers in the US. While there is a lot of ongoing angst about immigration, the fact is that opposition to Mexican truckers is a function of the political muscle of the Teamsters and other labor unions who want to avoid competition and thus keep their wages artificially high. Unfortunately, the US Senate recently decided to allow the Teamsters to preserve their protected market.
As Dan Griswold of the Cato Institute pointed out regarding the recent Senate vote to again postpone implementation of the NAFTA provision legalizing Mexican truckers:

“The Senate majority claims to be protecting highway safety, but the amendment passed yesterday is really just a bald form of discrimination against our Mexican neighbors. The U.S. government can and should hold Mexican trucking companies to the same safety regulations we impose on American and Canadian truckers. But the Senate bill will exclude even qualified Mexican trucking companies from helping to bring goods to U.S. markets. The Senate amendment sends the message that our international agreements mean nothing in the face of political pressure from the Teamsters. The problem the Senate majority has with Mexican trucks is not that they are unsafe but they are driven by Mexicans.”

Albuquerque Journal columnist and former Richardson advisor Ned Farquhar wrote an article recently in which he argued that western cities (including Albuquerque, Denver, Phoenix, and Salt Lake City) need to “pump up” their transportation networks. It may not have been a direct response to my recent article in which I argued against extending the Rail Runner to Santa Fe, but it might as well have been. That said, I’ll pick his arguments apart from the beginning.
First, Farquhar laments $3 per gallon gas and its impact on poor and low-income people. These crocodile tears are amusing for any number of reasons, but I’ll name just a few:
1) It is environmentalists like Mr. Farquhar (and his associates at the National Resources Defense Council) who want to keep most of our domestic oil supply (ANWR for example) out of production;
2) The Legislature is looking to raise the gas tax to pay for roads in part because the Rail Runner is eating up revenues that would otherwise have been allocated to build and maintain roads;
3) Gas prices are not that high by historical standards.
The rest of his article basically laments “inadequate” public transportation systems in the West and argues that it should be tougher to build roads. While he makes a few valid points about politicians preferring to build new roads than maintain existing roads, Farquhar is barking up the wrong tree if he thinks transit is really the solution.
While a genuine “free market” transportation system is a long way off, the fact is that people are willing to use roads — even toll roads — but mass transit has never come anywhere close (page 4) to sustaining itself financially. I’d like to see something approaching a “free market” transportation system in which the government role is minimized, but until that day, it is important to stop wasting taxpayer money on expensive rail projects like the Rail Runner and Mayor Marty’s trolley.

According to the Kaiser Family Foundation, the nationwide average premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007. While that is slower than in recent years, in New Mexico (according to the Albuquerque Journal subscription required), prices increased by about 8 percent.
Among the factors cited as raising prices in New Mexico is “upward price pressure from physicians” who are being squeezed by declining Medicare and other public-payer reimbursements. This is undoubtedly a big part of the problem, especially since New Mexico’s reliance on public programs (table 1) for health insurance is the third-highest in the nation.
Of course, the state’s high number of mandates — New Mexico added four this year — must take part of the blame as well.
With health insurance rates rising and Governor Richardson pushing for “universal” health care with little in the way of needed reforms, things don’t seem likely to improve for New Mexico health care any time soon.

No, Richardson is not accused of any of the antics of Larry Craig…but I found this article over at Reason interesting in its use of Craig and Richardson as foils for very different visions of the relatively libertarian interior West stands for.
As the author points out, these differing perspectives are much better played out and against each other in a genuinely-federalist government (as the Founders intended) where as many decisions as possible are made at the state level than in Washington.

New Mexico has a statewide smoking ban and both cities and states around the nation have adopted similar bans (Albuquerque banned indoor smoking in 2003, while New Mexico was the 17th state to do so). But what are the economics of these bans? In 2004, two economists, Benjamin Alamar and Stanton Glantz produced a paper which argued that legislated smoking bans are actually beneficial to the bars and restaurants that must ban smoking.
Although we at the Rio Grande Foundation have not done extensive research on smoking bans, the findings seemed to be counterintuitive. After all, if banning smoking was really good for business, you’d think more restaurants and bars would be doing so in order to attract customers in a very competitive industry.
Well, an economist named David Henderson, writing in Econjournalwatch, has poked holes in the argument that smoking bans are good for business. It turns out that Alamar and Glantz based their research on faulty assumptions like comparing the sale price of restaurants both in and outside banned areas to sales and assuming that the ratio had some bearing on the impact of a smoking ban. The authors also failed to account for bars and restaurants that closed their doors after bans took effect, thus lessening competition.
Alamar and Glantz respond, but their arguments just don’t hold. It only makes sense that legislated smoking bans would hurt bars and restaurants — after all, owners of those establishments, not politicians should know best what customers want.

The Rio Grande Foundation is hosting John Fund of the Wall Street Journal for a lunch talk in Albuquerque at noon on September 27.
Mr. Fund is one of the most insightful commentators on today’s political scene. In addition to writing for the Journal itself, he is a regular contributor to the Journal’s web site OpinionJournal.com. He has just been hired as a contributor to the Fox News Channel. His articles have appeared in Esquire, Reader’s Digest, Reason, The New Republic, and National Review.
Fund’s recent book, Stealing Elections: How Voter Fraud Threatens Our Democracy described the U.S. system of elections as “a haphazard, fraud-prone election system befitting an emerging Third World country rather than the world’s leading democracy.” He has written on New Mexico’s experience with voter irregularities.
The event will be held in the auditorium of the Albuquerque Museum which is located at 2000 Mountain Road NW, adjacent to Old Town Albuquerque. Cost per attendee is $25 and reservations may be purchased ahead of time through the Rio Grande Foundation (www.riograndefoundation.org) by check or with a credit card through our secure website. Boxed lunches will be available to all who reserve ahead of time. Pending availability, admission is $30 at the door.

There has been a great deal of talk recently about New Mexico’s supposed transportation funding “crisis.” Of course, only time will tell if our politicians do the right thing by canceling the Rail Runner or if they continue the train all the way to Santa Fe.
What is it about transit that draws politicians like moths to a flame? As Reason policy analyst Ted Balaker points out, when it comes to politicians, “transit’s primary use isn’t transportation but a backdrop for photo ops: Cut the ribbon, huddle around the others who fought for funding, smile and then jump back into your SUV.”
I wonder how many times Bill Richardson — when he is in New Mexico — or Mayor Chavez for that matter, rides the rails?

The headline in today’s Albuquerque Journal (subscription required) says it all, the panel of legislators and other community leaders is going to recommend an increase in New Mexico’s gas tax. While any tax hike is completely unnecessary, the fact that the panel’s recommendation will likely be to raise the tax by 6 percent a year— or about 1.3 cents a year for the first decade, is especially troubling. The last thing New Mexicans need is tax hikes on autopilot, thus enabling our elected officials to reach their hands deeper into our pockets every year, but without having to put themselves on the line as having voted for higher taxes….a “win-win” if you are a weak-kneed legislator, but a “lose-lose” if you drive a car, run a business, or care about limited government.
No other state has an open-ended, ongoing tax hike like what this task force is proposing. After all, when is enough, enough?
The fact is, as I pointed out in the Journal yesterday, any effort to resolve this so-called “crisis” must begin with scaling back the Rail Runner. I offer a few additional ideas like private toll roads and repeal of New Mexico’s little Davis-Bacon law as well.
Ultimately, with spending increasing rapidly in recent years, any crisis is the result of fiscal irresponsibility and our elected officials must take responsibility for their fiscal mismanagement.

Congress is back from its August recess and is ready to do more harm to the American economy. Specifically, the issue is energy taxes, some of which were killed in the Senate before they left for recess, but which are expected to rear their ugly heads again once the House takes up the bill. A brief analysis of the issue by RGF appeared in today’s Farmington Daily-Times. Details on the current version of the House bill (absent some of the big tax hikes mentioned in my article) are available from the Heritage Foundation.

In case you missed it, Trip Jennings of the Albuquerque Journal had an interesting article (subscription required) outlining what New Mexico’s political leaders are calling “a road funding crisis.” Of course, if you listen to Richardson’s transportation people, shifting scarce funds away from the Rail Runner is beyond the pale despite the fact that:

-operating cost for the Rail Runner — above and beyond the $400 million needed to construct it — will rise from $9.5 million to $20 million a year;

-the state needs to make up $75 million in federal funding that hasn’t come through for Rail Runner construction and start-up costs.

Of course, when legislators like Tim Jennings and Lucky Varela (both Democrats) even discuss the possibility of using Rail Runner money for roads, S.U. Mahesh of the Department of Transportation accused them of “having a horse-and-buggy mentality” (whatever that means). The fact is that if New Mexico legislators are at all serious about closing the funding gap, eliminating the Santa Fe Rail Runner expansion is a must.
That is not to say that stopping the Rail Runner extension will solve all of our problems. Tolling is another idea but there is a right way and a wrong way to use tolling. The wrong way is to set up government tolling authorities as was done along the Eastern Seaboard. Anyone who has traveled by car between Boston and Washington, DC can attest to long lines and poorly-maintained roads that can also be quite expensive.
The right way to do tolling is to work with private firms that build and maintain toll roads as an investment. Similar roads have been constructed in Southern California and elsewhere and rely on innovative technology to eliminate toll booths while maintenance and landscaping standards exceed those of other roads.
Lastly, while the task force has not considered it yet, any effort to improve New Mexico infrastructure should include a close look at repeal of our “Little Davis-Bacon Act.” These “prevailing wage” laws drive construction costs up as much as 10-15 percent. Repeal of this law in New Mexico would allow the market, not the unions, to set construction costs.
Maintaining and improving New Mexico’s infrastructure is very important to the state’s economy. While no single solution will solve our problems, implementing the solutions listed above would be a good start.

We at the Rio Grande Foundation have been critical of the Albuquerque-Bernalillo Water Authority’s ongoing takeover of the private New Mexico Utilities Inc. for some time now. Thus, I read with interest a recent article in the Albuquerque Journal which showed that while the private company pumped about 14.9 million gallons less water this year than it did last year, the government-run Water Authority pumped 3 million gallons more water than it did during the previous year. Worse, in the usual heavy-handed manner of government, the Water Authority has threatened to impose water restrictions on residents despite the fact that precipitation for the year is well above average.
Considering that one of the leading arguments for condemnation of the private water company has been and continues to be “conservation,” it would seem that we might want to sell off the government run authority to a private company rather than the other way around. This is especially true considering that customers of the private NM Utilities Inc. already use less water than their counterparts with the the government authority.
The whole debate about water conservation here in Albuquerque and in all of New Mexico’s cities is really just a tempest in a teapot anyway. After all, by even the most conservative estimates, agriculture uses 75 percent of New Mexico’s water. It would seem that if New Mexico is going to solve its water problems, we need to focus on making sure a real market for water exists so that water is allocated to those who are willing to pay for it.

There are a number of major problems with American health care, but no single problem is bigger or more important than the destruction of the relationship between doctors and their patients. The latest example of this involves insurance companies paying doctors to switch their patients from brand name drugs to generics. A Boston news story on this can be found here.
While there is nothing inherently wrong with generics, there is no question that the fact that insurers stand between doctors and their patients is a big part of the problem here. As I discuss in this article for the Albuquerque Tribune,

Employers contribute no tangible benefit to their employees’ health care that could not be provided without them, employers are little more than “middlemen” that stand between individuals and their insurance providers and doctors. Cutting out this unnecessary layer would give patients greater say over their insurance providers and plans, thus helping to restore the patient-doctor relationship that has become all-too-tenuous in recent years.

Adoption of President Bush’s proposal to give individuals the same tax benefits for health care as their employers get would be good way to start restoring the doctor-patient relationship. Unfortunately, the left seems to be obsessed with replacing insurance companies with government bureaucrats, a “solution” that is destined to only widen the gap between doctors and their patients.

Surprise, surprise….actually, not surprising at all. The Federal Trade Commission has studied the issue and determined that oil companies did not manipulate oil prices last summer. For those who care to read the entire study, it is available here. Of course, we at the Rio Grande Foundation were saying this more than a year ago and, as both the FTC and Foundation writers pointed out, government policies, specifically the ethanol mandate, played a major role in driving prices up.

They say newspapers are a dying industry. Yes, there is no doubt that people have more ways to get information than ever before and some would even argue that blogs like the one you are reading now are helping to kill the industry. All of this may be true and, with the Albuquerque Tribune up for sale with a very real possibility of closure, the point is driven home.
That said, newspapers actually generate healthy revenues and are still a profitable business to be in. The fact is that the sale of the left-leaning Tribune represents a great opportunity for an entrepreneurial, market-friendly, wealthy individual to take over the newspaper and turn it around, preferably while focusing its journalism on investigating the wide range of abuses of power that go on in this state.
Newspapers may not have the circulation they once did, but their impact cannot be denied because people who read newspapers tend to be the best-educated and best-informed members of the population. Regardless of who buys the newspaper, I hope the Tribune survives, but I do think ownership of media outlets represents a unique opportunity for believers in the free market to reach out to the population as a whole.

The Rio Grande Foundation, along with the New Mexico Alliance for Legal Reform, is offering cash rewards for anyone who “turns in” the craziest laws whether they be statewide or city/county here in New Mexico. Bernalillo County Sheriff Darren White is the honorary chair of the contest.
More information including instructions for submitting your entries is available here. Check out this listing of crazy laws in other states for ideas on what to look for.

The fact that health care mandates drive up the costs of health care and help create larger numbers of uninsured is well-known and accepted. Before the 2007 legislative session, New Mexico had a relatively high number of mandates (45), but that was not enough for Governor Richardson and the Legislature. In fact, four new mandates were adopted this year and they are now in effect. The new mandates are as follows:
1) Hearing Aids/Related Services for Children Under Age 21 (SB 529);
2) General Anesthesia and Hospitalization for Dental Surgery (SB 776);
3) HPV vaccine for members aged 9 through 26 (SB 407);
4) Colorectal cancer screening tests (HB 510).
It would seem that driving up health care costs would be counterproductive as a means of achieving Richardson’s goal of providing health care coverage for all New Mexicans, but logic does not always apply to health care policy, especially in New Mexico with one of the highest rates of uninsured in the nation.

We have certainly had our differences with Greg Payne and the Albuquerque Transit Department (about the Mayor’s proposed trolley in particular), but I’ve got to give them credit for their recent deal to add about 100 new bus shelters (subscription required) at no cost to taxpayers.
The key to making this happen is a partnership with the advertising company Lamar. Lamar will provide about $1 million for the shelters and will be able to place billboards on them for five years. This is a win-win in a city that is too often hostile to private enterprise.

We don’t always see eye-to-eye with the ACLU, but it is hard to argue with their standing up for the concept of “innocent until proven guilty.” According to news reports, a truck driver was stopped at a weigh station on U.S. 54 in New Mexico north of El Paso, Texas. He gave police permission to search his truck to see if it contained “needles or cash in excess of $10,000.” While the driver had no needles, he did have $24,000 in cash.
Now, the DEA is holding the driver’s cash unless he can prove that the money was not related to drugs. Now, I’m not sure exactly how anyone can possibly be expected to affirmatively prove their innocence, but so are the inner workings of America’s bizarre asset forfeiture laws.

A state employee named Charles R. Ferguson had what may be the most courageous opinion piece I’ve ever seen in the Albuquerque Journal today.
The piece is fantastic, but the money quote is “Just think about this: if you walked into a business and demanded money from them, and told them to pay up or go out of business, the district attorney would have a field day charging you with extortion and racketeering. But stick a union label on that scenario and it’s called ‘fair share’ or ‘agency fee.’”
Obviously, a key component of economic freedom is for an employer and employee to agree to determine the terms of their relationship and not to have a third party (unions supported by the government) intervening. If New Mexico is ever to have such policies, known as “Right to Work,” the Rio Grande Foundation will be a key factor in that success. Unfortunately, despite Mr. Ferguson’s courageous words, we are a long way from achieving that freedom here in New Mexico.

Economic literacy is important. It is even more important when you cover one of the most controversial issues for the state’s leading newspaper. Winthrop Quigley covers health care for the Albuquerque Journal and while I don’t have a major problem with his reporting, a recent column (subscription required) of his stood out for its being based on a erroneous assumption.
Tthe headline — which Quigley probably did not write — provides a good summary of the article and my problem with it, “How we pay the doctor just coudn’t matter less.” This is simply absurd. How we pay doctors is actually the key to health care reform. If patients pay their doctors, then patients are viewed as the customer and will be treated as such. If it is insurance companies acting as the agent for employers or the government that has the relationship with doctors and ultimately pays them, then the doctors will respond to insurance companies or the government.
Quigley does point out in the article the problems associated with what he calls “health care’s 19th century business model” and he notes the very real problems posed by a single-payer system, but his argument that how we pay for health care is irrelevant does not hold water.
The fact is that government regulations and cost-shifting have contributed greatly to the inefficiencies and lack of responsiveness we see in today’s health care system. Giving individuals the same tax deduction now given to their employers would be a step in the right direction. So would allowing individuals to shop for health insurance across state lines as a means of avoiding state mandates that drive costs up significantly. Congressional action on market-based Medicaid and Medicare reforms would also help matters a great deal by limiting the problem of cost-shifting from Medicare and Medicaid users and on to paying customers.

Recently, the Rio Grande Foundation released its study of the “local” tax burdens (gross receipts and property) of New Mexico’s 10-largest cities. Carlsbad and Hobbs were found to have the lowest burdens as a percentage of income while Albuquerque and Las Cruces residents faced the heaviest burdens.
To calculate your own gross receipts and property tax burden (assuming a new purchase that is not impacted by the 3 percent property tax cap), go to our website and use the tax burden calculator.

The idea had been around for several months, but last night, Albuquerque’s brain-dead city council decided to impose a far-reaching, 31 page-long set of “big-box” regulations. Sally Mayer of all people stood up for reality by voting against the bill and saying, “The regulations are too detailed. Many developers are already building high-quality designs that match the bill’s goals.” She went on to point out that “the ordinance would make it much harder to redevelop property in older parts of Albuquerque… thus defeating what the council is always talking about, which is infill.”
Of course, the city already has a tremendous degree of control over the so-called “big-box” stores as we witnessed in the recent Wal Mart fiasco involving the proposed store near Vista del Norte. The public meetings and new approval procedures will only make it easier for small, vocal groups of NIMBYists to throw a wrench into store location proceedings. This will only drive costs up and reduce the positive economic impact of Wal Mart and others.
The legislation now moves on for signing or a veto from Mayor Marty.

I’ve discussed the dairy cartel in past blogs, but the Albuquerque Journal ran an excellent opinion piece from a farmer and critic of the House-passed farm bill now moving through Congress. This legislation, as the author points out, would continue Congress’s tradition of hurting family farms while professing to help them. That is nothing new considering that Ted Turner and Scottie PIppen (a former NBA star) have received massive subsidies in recent years.
Unfortunately, the simple fact is that agriculture policy in this nation is set by a handful of extremely wealthy and well-connected people. The rest of us must deal with the consequences of these absurd policies.