Congressional Democrats are hoping to pass a tax hike on cigarettes in order to pay for still bigger government. While billions in tax hikes were removed from the Energy Bill by Senate Republicans, the latest tax hike to increase funding by $50 billion for the State Children’s Health Insurance Program , also called SCHIP.
Of course, SCHIP expansion is just another means of expanding government health care at the expense of private health care. Not surprisingly, Governor Richardson has made SCHIP expansion a point of emphasis. The not-so-subtle point here is that the Democrats are using SCHIP expansion as a means of incremental steps to “universal, socialized medicine.”
Perhaps President Bush will veto this massive tax hike and expansion of government as he has pledged in the past?

A few weeks ago I blogged about a David Brooks column in which he claimed that the “free market” is failing to produce enough educated workers for the American economy.
It was good to see John Stossel express many of the same thoughts I did in a recent column. We have enough problems with the teachers’ unions and those who have a direct interest in misleading Americans about the socialist nature of government-run schools, we don’t need so-called “conservatives” doing it as well.

Few cities are so willing to adopt senseless and economically-harmful policies as Santa Fe. Whether the issue is the dreaded toilet exchange program or the incredibly inflated $9.50 an hour minimum wage, Santa Fe is on the loony left.
Now, some city councilors would like to push the city even further down the road to economic foolishness. The latest proposals are for a two cent tax on soda pop and a 1 percent hike in the city’s gross receipts tax. The plan is to use the money for a variety of open space and child development initiatives.
While the soda tax may not be as big or economically-harmful as a 1% increase in the gross receipts, it is patently unfair and unnecessarily targets one group of people – soda drinkers – to pay for something that most of them will never benefit from. Besides, as soon as a soda tax is levied, can taxes on burgers, pizza, and ice cream be far behind?
Of course, raising the gross receipts tax — especially by a full penny — will do more economic harm than the soda tax. Santa Fe already has the heaviest gross receipts tax burden of any major (25,000 people or bigger) city in New Mexico, a one-cent increase would give the city an astounding 8.625 percent gross receipts tax rate. The new rate would be an astounding 25 percent greater than the rate charged in Albuquerque. Check this table for gross receipts tax rates statewide.
While it may not happen overnight, eventually Santa Fe’s economy and even its tourist industry will begin to suffer from these absurd policies. After all, most wealthy people didn’t get that way by carelessly wasting money. Eventually, even Santa Fe’s tax burden may cause tourists and part-year residents to look elsewhere.

This article not only sums up why we celebrate the 4th of July, but explains the ideas behind the Rio Grande Foundation.

An article in the Albuquerque Journal’s Business Outlook section yesterday (subscription required) focused on the Universal Service Fund and the fact that Qwest, which has major operations in New Mexico, has called the Fund “outdated.” In case you don’t know, the Universal Service Fund is one of those line items on your phone bill that turn a $14 bill into a $28 bill.
Specifically, it is a nearly 12 percent surcharge on phone bills to subsidize phone service in rural areas, mountain communities and other places where installing equipment and making a profit would be difficult. Now, I know that New Mexico is one of those areas that have probably benefited disproportionately over the years from this subsidy, but with the fund at $4 billion and few in need of the subsidy, one might think that Qwest would ask for the fee to be dropped entirely since it impacts their customers.
Not so, instead Qwest and some federal lawmakers have proposed using some of the funds to provide hard-to-reach customers with broadband service. Great, now we can all subsidize broadband service for Ted Turner’s house.

Micha Gisser, a senior fellow with the Rio Grande Foundation, had an excellent article on health care in the Albuquerque Journal last week. In his article, Gisser explained that despite a relatively widespread lack of insurance in New Mexico, no hospital denies patients essential coverage. And, while having large numbers of uninsured is less than ideal, nationalized healthcare is not needed to resolve this problem. In fact, Gisser points out, “President Bush’s proposal to cap the tax deduction for employer-sponsored health insurance at $15,000 and give people the same tax break to buy insurance regardless of whether they get it from an employer or elsewhere,” would have a tremendous impact on the ability of individuals to obtain health coverage.
Gisser clarifies once and for all that mandatory health care as Massachusetts has done is based on the absurd assumption that we will criminalize lack of insurance. Gisser writes, “Suppose New Mexico passes a law insisting that everyone purchase health insurance from any of the private insurance companies. Are we willing to enforce the law by sending the ‘disobedient’ head of a nonpoor household to prison?”
As I wrote a few weeks ago, there are no “easy” health care solutions.

waste more taxpayer money!!! Seems like our friends in Sandoval County have admitted their complete and total failure(subscription required) at getting countywide, subsidized wi-fi. Unfortunately, the County’s failure is not a mere matter of “breach of contract” as County Commissioner David Bency claims.
The problem is that governments simply are not efficient managers of services that are either not absolutely essential or rely on being up to date on the latest technology. Hopefully, unlike our friends in Sandoval County, Albuquerque’s elected leaders will understand their limitations.

The US Supreme Court recently ruled against the Washington Education Association’s efforts to levy fees on public employees who choose not to join a union but are represented by the union in collective bargaining. George Will explains that had the Court ruled any other way, it would have allowed labor unions who have been unable to persuade people to join, the option coercing the unpersuaded.
Maybe someday New Mexico will rid itself of its “Little Davis-Bacon” which allows unions to unfairly set prices on construction projects.

In today’s Roswell Daily Times, I had an article denouncing the Energy Bill that passed the Senate recently. While some of the worst provisions, namely a $32 billion tax package that would have increased taxes on motorists in order to fund alternative fuel projects, died, the bill will still harm motorists and taxpayers if it becomes law.
We’d all be better off with NO national energy policy than central planning.

This story is really not a surprise. Private charity has always been more effective at improving peoples’ lives than government handouts and examples of this in reaction to Hurricane Katrina have already been widely reported.
What is surprising is that people are so easily fooled, so often, by government officials who say “we’re going to help.” Things weren’t always this way. In fact, after every disaster, natural or otherwise, we should mandate the reading of “Not Yours to Give,” an excellent Illustration of the way government has usurped and corrupted private charity.

New Mexico is so poor…how poor? It’s so poor that the state’s Human Services Department serves one out of three citizens of the state. You know the worst part of it is that they are so proud of that fact that they put that at the very top of the webpage for all to see. While serving one of three New Mexicans may seem like a lot, if the Legislature passes “universal health care” which Richardson has endorsed, one in three could be just the start.
Hat tip to John LaPlante, Managing editor of the blog State House Call.

Without a doubt, the biggest health care story of the next few weeks will be left-wing filmmaker Michael Moore’s movie Sicko in which Moore lashes out against a variety of problems with the US health care system and makes the case for socialized health care.
Albuquerque hosted a “sneak preview” of the movie and since I was curious, I went over the weekend.
The beginning of the movie is a series of vignettes with people who have been left behind for whatever reason by the American health care system. Although little in the way of hard data are presented, given the role health insurance companies play in denying and limiting patients’ access to health care, he certainly has a point. Unfortunately, rather than criticizing the fact that federal law places HMO’s and other intermediaries between patients and doctors, Moore uses his examples to build the case for Hillary Clinton-style nationalized health care.
Moore then takes on the American Medical Association for their role in limiting the supply of doctors. On this point, although he’d probably be horrified, Moore is in agreement with none other than Milton Friedman. The very goal of professional licensing is to limit supply, thus increasing prices. Doctors are not the only ones who do this within the medical system, but the power of these professional organizations is one factor that drives health care costs up.
Moore then visits Canada, Britain, and France and interviews a number of people who rhapsodize about the wonders of their respective systems — basically, health care is “free” and we can’t imagine how it must feel to pay for health care. Of course, Moore glosses over the very real problems with both the costs and the long waits for service in these countries: Britain, France, and Canada.
Lastly, we embark upon the episode involving the 9/11 workers and the visit to Cuba that has made headlines. I do believe that it was a shame and a travesty that workers at Ground Zero have not received the health care they needed. Surprisingly, Moore did not specifically mention the Environmental Protection Agency’s role in providing a false sense of security to workers and others who were exposed to the dust and rubble of the World Trade Center towers.
While even Moore admits that Cuba is a poor country, he fails to point out that it is the very socialist system that provides ridiculously cheap medical care that makes the place so un-livable. All the viewer sees is grateful Americans who have been ignored by their own government receiving “free ” health care.
There is no doubt that Michael Moore’s movie is part of a coordinated effort on behalf of socialized medicine. Bill Richardson will be making a big push for some kind of “universal” coverage in New Mexico next year and all of the Democrats running for President have proposed some kind of universal coverage.
Unfortunately, what we really need in health care is a good dose of capitalism and reforms that peel away the socialism that has built up over the years in our system. Seems that we need a libertarian/conservative version of Michael Moore to propagandize on behalf of limited government.

From a fiscal policy perspective, the growth of government during Mayor Chavez’s term is easy to quantify and well-publicized. Whether we’re talking about the streetcar or taxes, Chavez is not shy about increasing the size and scope of Albuquerque governmnet.
But another are in which government has grown in troubling ways is in so-called “nanny-state” activities. Simply put, Chavez seems hell-bent on becoming the third parent most Albuquerque residents never had. There are almost too many examples to cite, but red light cameras and regulations on pet owners are two examples.
Chavez also pushed for and got a ban on talking on your cell phone while driving and he singlehandedly banned smoking on all city-owned land save golf courses.
Not to be outdone, the Legislature-passed ban on riding bikes or skateboarding without a helmet if you are under 18 also went into effect recently. Apparently parents and their children are simply not able to make this decision for themselves.
Ultimately, what it all boils down to is that we have put our politicians on such a pedestal that they have nearly unlimited powers to tell us what we must and must not do. While some may agree with one or more of these particular laws, there is unquestionably a trend both locally and at the state level to allow politicians to make more and more decisions for us. With each nanny-state law that passes, New Mexicans will become a little less free to choose what is right for themselves. That is unfortunate.

There is a heavy freight train rolling downhill and New Mexico’s economic future is tied to the tracks. What am I talking about? Just the biggest, most expensive mandate to hit New Mexico businesses and taxpayers in a long, long time: universal insurance (subscription required).
I previously reported the fact that Mathematica, the firm analyzing three different proposals for New Mexico health care, had said that a single-payer system would be cheaper than the system now in place. Now, according to the Journal article today, it is said that all three proposals would save money compared to today’s system. This, despite the fact that the single-payer and “voucher” systems would require new payroll taxes of between 4 and 8 percent!
I’m not buying it. How many times have well-paid consultants and analysts tried to tell us that down was up and 2 + 2 was 5 in order to sell some new government program? The truth is that government intervention in the market has caused most of the problems we are dealing with in health care today and bigger, more ambitous government programs will only multiply those woes.

Investor’s Business Daily bodyslams the Energy Bill for — among other things — levying $29 billion in new taxes on the oil industry in this editorial.
Also, according to an analysis by the Heritage Foundation, “the bill could increase the price of regular unleaded gasoline from $3.14 per gallon (the early May national average) to $6.40 in 2016 — a 104 percent increase.” The analysis includes a feature that allows you to figure out how high gas prices will go in your state.

In case you missed the Albuquerque Journal this morning, there was an interesting story (subscription required) about Ben Luce, a Santa Fe physicist who recently resigned as director of the New Mexico Coalition for Clean Affordable Energy.
Mr. Luce is quoted as saying, among other things, that “The renewable energy policy was structured by the (Public Service Company of New Mexico) to make the governor look good but to have no real impact.” Obviously, this would not be the first time that such a thing has happened in New Mexico, but this time it is a hard-core environmentalist that is complaining. To my mind, what is good to him is bad for the rest of us.
Thus, it is hard to read his comments. Are the renewable mandates and transmission authority ineffective? It is hard to tell, but we certainly hope these onerous regulations will be watered down and toothless. Only time and economic indicators will tell.

Sorry for the massive server troubles over the past week. I believe we are back and expect no further problems.
Steve Terrell of the Santa Fe New Mexican wrote an interesting piece discussing Governor Richardson’s claims of having increased the number of jobs in New Mexico by 80,000 as Governor. A number of economic policy experts (including myself) are quoted throughout the story to determine how much credit the Governor should receive for new jobs in the state and the economic growth that has taken place here.
The ulitmate point of our studies of New Mexico’s economy is that elected officials exert only a limited amount of control over the short-term health of the economy. External factors like oil and gas revenues can cover up the effects of mistakes elsewhere, just as a recession could make a governor look worse than they really are.
Unfortunately, New Mexico’s long-term economic struggles are the direct result of a lack of economic freedom.

According to a new publication from the Institute for Justice, the non-profit law firm that litigated for property owners in Kelo v. New London, New Mexico’s eminent domain reforms passed during the last legislative session give the state an “A” when it comes to protecting property owners.
We knew the reforms were good and we’re happy that both Governor Richardson and the Legislature were able to find agreement on the issue without caving to special interests. For more information on eminent domain and the relative degree of protection in all 50 states, check out the report card here.

David Brooks of the New York Times has never been my favorite columnist. I’ve never really thought that he “gets it” when it comes to limited government and personal freedom. He also made several factual mistakes (the RailRunner is not “light rail” for example and New Mexico is not a “Red State“) in a recent article on Bill Richardson’s run for the White House.
But I’m not going to dwell on those past errors. I’m writing about a current issue. Brooks wrote a column recently in which he called himself a “Hamiltonian.” While I don’t dispute his claim — he’s certainly no ‘limited government conservative’ — another statement has me shaking my head:

If you are reading this column, you’re keeping company with somebody in group No. 2. We Hamiltonians disagree with the limited government conservatives because, on its own, the market (emphasis added) is failing to supply enough human capital. Despite all the incentives, 30 percent of kids drop out of high school and the college graduation rate has been flat for a generation.
Just when it needs a more skilled work force, the U.S. is getting a less skilled one. This is already taking a bite out of productivity growth, and the problem will get worse.

How exactly is the educational system in this country a “market?” The answer is it is not a market in any way, but a government monopoly with only a few inroads having been made by charter schools, private schools, voucher programs, tax credit programs, and home-schoolers. While these groups all are attempting to break out of the top-down, government education model, they are a distinct minority.
In other words, Brooks doesn’t seem to know what the word “market” really means. If Brooks and other “Hamiltonians” want to create a better-educated work force, perhaps we should create a genuine “market” in education. Until then, calling it a market is absurd.

Many credit Byron Dorgan (D-ND) with killing the much hated Senate immigration bill. In his quite animated speeches opposing the bill, he notes his distaste for the guest worker program, which ostensibly takes jobs away from Americans and depresses American wages.
Our own Jeff Bingaman sponsored an amendment to the bill that lowered the guest worker cap from 400,000 to 200,000, proclaiming that the former number as untested and irresponsible. His claims have no basis in reality. Prior to the bill, the government authorized an ulimited number of H-2A guest worker visas, along with numerous other guest worker visas such as H-1B. But for a moment, let us give Mr. Bingaman the benefit of the doubt. What can we expect by lowering the number of guest worker visas offered each year?
The Southwest benefits tremendously from expansive guest worker programs. Texan farmers expressed their dismay at the likely death of the guest worker program. Their comments expose one of the main guest worker fallacies. Contrary to the naysayers, guest worker programs keep businesses in America, thereby keeping tax revenue here as well. When the guest worker program runs dry, businesses pack up and move south of the border, taking both immigrant AND American jobs with them; almost half of this industry has already been lost to Mexico because of the shortage of workers. There goes the money that Dorgan and Bingaman so desparately crave for entitlement programs.
Perhaps what Bingaman and Dorgan should be saying is that guest worker programs take jobs away from labor unions. As someone who goes to school an hour away from Detroit, I highly recommend this course of action.

A few weeks ago the Minnesota-based Center for the American Experiment published a symposium of views from various think tankers and economists on the topic “Should Medicare be Means Tested?”
Perhaps not surprisingly, I said “quite simply, yes.” After all, it seems unfair from my perspective for middle and lower income Americans to pay for wealthy recipients of a federal entitlement program.
The fact is, despite legitimate differences of opinion among such free market and conservative luminaries as Grover Norquist of Americans for Tax Reform, John Berthoud of the National Taxpayers Union, and Congressman Tim Penny, something needs to be done to reform entitlements and soon.

As my bio indicates, I was born and raised in Cincinnati, Ohio. I am visiting Cincinnati right now and, after having picked up a copy of a newspaper laying around my mom’s house, I began to have flashbacks to Albuquerque circa last fall.
It turns out that HDR, the very same consulting firm that nearly succeeded (and continues to try) to push streetcars on Albuquerque, is trying to do the very same thing in Cincinnati. As this article indicates, both the financing plan and justification would have a lot in common with Albuquerque’s proposed streetcar:

The streetcar system be funded mostly with tax increment financing, or TIF – a financial tool that earmarks future increases in tax revenues arising from an improvement project to finance the project that will create those gains – and state and federal subsidies. He said the TIF proposal makes sense because a streetcar system would spawn economic growth along its path and into neighboring areas.
‘It’s not about growing revenue, it’s about economic development for the city.’

Sounds mighty familiar to me! Far from being a solution that is “tailor made” to Albuquerque, it looks like HDR is simply trying to sucker as many cities as possible into buying an expensive streetcar system. The plans are the same down to their media strategies of focusing all attention on downtown and the few isolated areas that may benefit from the streetcar while the economic burden placed on the rest of the city is ignored. Hopefully neither city is foolish enough to fall for HDR’s slick sales pitch.

Jerry Ortiz Y Pino is one of the New Mexico Legislature’s most left-wing members. When he’s not trying to impeach President Bush he writes a column for Albuquerque’s weekly alternative newspaper The Alibi .
In a recent column, the usually “progressive” Ortiz Y Pino struck a somewhat different tone in arguing against Mayor Chavez’s proposal to cut Albuquerque’s gross receipts tax. As I point out in my follow-up letter to The Alibi Ortiz Y Pino needs to understand that the gross receipts tax is regressive — that is it hurts the poor worse than it hurts those of us with more money.
So, unless Ortiz Y Pino is simply a lover of government and not a real progressive who is concerned with the welfare of the poor (a real possibility when you consider this), he should come down in favor of cutting the GRT. Unfortunately, in this day and age, both parties seem to care more about growing government and acquiring power than actually helping their constituents.

Whole Foods recently struck a deal to purchase rival organic grocery Wild Oats. No big deal, right? It is a very big deal actually if you work for the Federal Trade Commission and you believe that consumers must be protected from a “monopoly” in organic grocery stores.
Leaving aside the debate over whether federal intervention to ensure competition in the organic food grocery sector is really a pressing national interest, I find the argument that the merger of these two companies is somehow “anticompetitive” quite unreasonable. If anything, the fact that Wild Oats has been losing money and yet was still able to find an interested purchaser implies that Whole Foods management sees ample room to grow the organics market and for new players to enter and expand their selections of organics.
In fact, prospects for growth and the obvious optimism expressed by Whole Foods might even spur other grocery chains like Kroger and Safeway to start doing even more in the organics sector…and where does Trader Joe’s fit in to the discussion? Aren’t they a competitor of Whole Foods?
The fact is that the grocery industry is highly competitive and (even after the purchase of Wild Oats) Whole Foods is a relatively small player, not a monopolist.
Hopefully the FTC will get a grip on reality before this gets tied up in court. Seems like another case of a bureaucracy looking for new dragons to slay when it might be better just to put down the sword.