Richard Branson and his company, Virgin, may someday launch spacecraft from the New Mexico desert and yet, he can’t own an airline that flies within the United States because he’s a foreigner. Aside from the fact that such regulations are unfair, they are harmful to American travelers. Competition is reduced and the variety of services provided is constrained. In fact, a study by consulting firm Campbell-Hill Aviation Group argued that Virgin America would save travelers $786 million per year.
So, what special interest might be behind such a misguided policy….why, labor unions of course! How typical of the labor movement. Instead of welcoming competition and the new jobs that would be created by additional airlines, the labor unions would rather stifle competition and stick travelers with the bill. And they wonder why union membership is collapsing.

The Governor’s office sent out a press release this morning, “Governor Bill Richardson Appoints Linda Roebuck as
Behavioral Health Czar” that caught my attention. No, the Rio Grande Foundation hasn’t taken a particular interest in behavioral health and as far as we know, Ms. Roebuck is a fine person…the problem is the job title “Czar.” According to our friends at Wikipedia, Tsar (same meaning as Czar) means “is a contraction of the earlier tsesar, derived from the Roman title Caesar. Great, so now we have an “emperor” of behavioral health. Not only is the name derived from an imperial title, but if you’ve read any history you’d know that Russia’s Czar’s were not exactly a successful bunch and they eventually gave way to the Lenin and the Soviets…not exactly a great track record if you ask me.
My intention here is not to poke fun at Governor Richardson. After all, we have a federal “Drug Czar” and various groups are constantly lobbying for one czar or another. I just hope that before more czar’s are named that more people understand that we shouldn’t want a “czar” in the first place.

It is no secret that Governor Richardson plans to boost education spending dramatically in 2007. But will his big-spending ways have any positive impact on kids’ educational attainment? Not according to a recent study by the American Legislative Exchange Council. As Matt Warner explains “After two decades of failure and almost twice the price, it’s time to give parents the power of choice.”
Hopefully, Governor Richardson will throw his support behind some educational reforms that are likely to have a positive impact, like tax credits.

Thomas Sowell adds another fine article to his series on “dangerous obsesssion.”

Headline in Friday’s Albuquerque Journal:
“Gov. Details Plan to Cut Emissions”
HT: Robin

We have over 14 inches of snow in the East Mountains. Enjoy:

With Democrats in control of Congress, global warming is bound to become an even bigger issue in 2007. New Mexico, apparently, will be leading the way as Governor Richardson recently outlined his plan to strictly regulate industrial emissions of so-called “greenhouse gases.”
Given all the talk of limiting industrial and automotive emissions, I was surprised to learn that the real cause of global warming is not cars and factories after all, but cattle. This article by Mr. Peters appeared in the Albuquerque Journal on Thursday and I’m still not sure if the author was joking when he wrote that we should be mandating catalytic converters to be fitted to the rear-ends and mouths of cattle….
As if the catalytic converter idea isn’t nutty enough, Mr. Peters then advocated placing heavy taxes on beef and bans on the serving of meat products. It is close to New Year’s, but nowhere near April Fool’s day. I hope the author was joking, but if you think his rationale will never be employed to restrict your freedom, you are sorely mistaken.

Thomas Sowell does a great job of teaching us economics in four recent, short articles (one, two, three and four).
The articles explain sources of value and knowledge in human interaction and how values and knowledge translate into wages, prices and progress. I won’t attempt to summarize Sowell here, since he is one of the best economics teachers on the planet. If you are a bit puzzled about how economists think you should read them all carefully — he provides lots of examples of the functioning of markets and politics familiar to our daily lives.
Many of us think by casual observation that some prices or incomes are too high (low) or grossly unfair or unjust. Since most of us cannot make sense out of prices or incomes, he urges us not to make matters worse by “doing something” about what we cannot comprehend in the first place. For that reason he entitles his articles “dangerous obsession.”
Sowell is author of two superb books accessible to anyone who can read: Basic Economics and Applied Economcs. I highly recommend them.

Walter Williams can always be counted on to provide insightful analysis into current events and his economic acumen is second to none. While Rep. Charles Rangel is busy making the political case for restoring the military draft, Williams picks his arguments apart by clearly illustrating that the draft would only shift the financial burden of military operations from taxpayers onto the backs of our soldiers. Not exactly what Rangel intends, I’m sure.

So far I have not noticed any local mention of Saturday’s New York Times article featuring greedy, villainous, predatory payday lenders in New Mexico. At least that is the impression you get from reading the article that is not on the editorial page (“Seductively Easy, Payday Loans Often Snowball”):

While such lending is effectively banned in 11 states, including New York, through usury or other laws, it is flourishing in 39 others. The practice is unusually rampant and unregulated in New Mexico, where it has become a contentious political issue. The Center for Responsible Lending, a private consumer group, calculates that nationally payday loans totaled at least $28 billion in 2005, doubling in five years.
The loans are quick and easy. Customers are usually required to leave a predated personal check that the lender can cash on the next payday, two or four weeks later. They must show a pay stub or proof of regular income, like Social Security, but there is no credit check, which leads to some defaults but, more often, continued extension of the loan, with repeated fees.
In many states, including New Mexico, lenders also make no effort to see if customers have borrowed elsewhere, which is how Mr. Milford could take out so many loans at once. If they repay on time, borrowers pay fees ranging from $15 per $100 borrowed in some states to, in New Mexico, often $20 or more per $100, which translates into an annualized interest rate, for a two-week loan, of 520 percent or more.

I have no doubt that some of the borrowers get into the kind of trouble such as that of Mr. Milford of Gallop:

Mr. Milford is chronically broke because each month, in what he calls “my ritual,” he travels 30 miles to Gallup and visits 16 storefront money-lending shops. Mr. Milford, who is 59 and receives a civil service pension and veteran’s disability benefits, doles out some $1,500 monthly to the lenders just to cover the interest on what he had intended several years ago to be short-term “payday loans.”

But the article raises a lot of unanswered questions:
Specifically with regard to the situation of Mr. Milford’s seeming dilemma, why doesn’t he get a bank loan to extricate himself from his “ritual?” Someone with a stable income (civil service retirement and veteran’s disability payments) should easily qualify for such a loan. Why wouldn’t the reporter dig a little deeper? It looks like there may be something else going on here.
Did Mr. Milford and others like him encounter some kind of fraud on the part of the payday lender? Was there something about his side of the voluntary transaction that was misrepresented? After all, it is a government function to protect us from fraud.
Economists always want to know about the road not traveled. What would have been the consequences had Mr. Milford not gone in debt to the payday lender? What did he need the initial loan for in the first place? It seems to me that would be a logical question for the reporter to ask.
With regard to the bigger picture:
If some 90 plus percent of these borrowers are responsible and do not get into trouble, then why do we want to penalize them for the irresponsible behavior of New Mexicans like Mr. Milford? Would we rather have them bouncing a check for a much higher fee? Would we rather have their heat turned off. Would we rather have their car repossessed? Would we rather they enter the black market for loans when they are desperate?
If the rates charged by payday lenders are so outrageous, then why don’t entrepreneurs enter the market and charge lower rates? This would be a great opportunity for Diane Denish and her feel-good comrades to show their concern without having to legislate more New Mexico style government coercion. They say that payday loans should be capped at a 36 percent annual interest rate. That means she should be able to satisfy the demand for these loans for a fee of only one dollar and thirty-eight cents for a two-week loan of $100. That is quite a saving over the $15 to $20 (or “sometimes more”) currently charged by these lenders.
People tend to do much better when they make decisions for themselves even if, in retrospect, a mistake may have been made. The New York Times is obviously pushing for government to keep us from obtaining payday loans. They think the government knows better for us what we need (or don’t need) than we do.
To the contrary, prosperity results when government does not snowball, because people tend to make much better decisions for themselves (even accounting for all the mistakes we make).
Here is something that really annoys me about this whole thing:

He said the association supported “fair regulations,” including a cap on two-week fees in the range of $15 to $17 per $100, a level now mandated in several states, including Florida, Illinois and Minnesota. This translates into effective fees of about a dollar a day for those who repay on time, which he said was reasonable given the risks and costs of business.

That is a quote from Don Gayhardt, president of the Dollar Financial Corporation, which owns a national chain of lenders called Money Marts. Mr. Gayhardt is also a board member of the Community Financial Services Association of America, a trade group that represents about 60 percent of payday lenders. Mr. Gayhardts’ freedom to contract voluntarily is under attack. Yet, rather than defending his freedom, he kowtows to the seductive big-government snowballers by supporting “fair regulations” that amount to price controls.

Thanks to the Citizen for recognizing RGF President Paul Gessing and other deserving individuals as “community heroes.” I wholeheartedly agree. The evidence for Paul is here.

Thanks to Walter Bradley for his fine opinion piece supporting defense of our precious property rights in New Mexico.

We discovered that local governments could use New Mexico’s incredibly broad condemnation authority to take virtually any property in the state and hand it over to developers.
Most people recognize the need for eminent domain to accomplish traditional public uses, such as roads and utilities. But, 99 percent of the public comments to the task force made clear the overwhelmingly predominant position of citizens: New Mexico should respect the rights of individuals to keep what they have worked so hard to own, and should protect its citizens from eminent domain abuse.

One of the great things about living in New Mexico is the New Mexico Symphony Orchestra. I was reminded of that this morning when Robin brought me this:

Will he bring the cat? Find out May 24, 2007.

The New York Times today reports on the latest release on population trends from the Census Bureau:

Measured by rate of growth, Arizona was first, followed by Nevada, Idaho, Georgia and Texas, Utah, North Carolina, Colorado, Florida and South Carolina. For 2005-6, Colorado and South Carolina displaced Delaware and Oregon. Arizona’s estimated population grew by 213,311 to 6.2 million, an increase of 3.6 percent. Most of the increase was driven by more people moving in from other states than leaving — most from California. But immigrants also contributed to the growth, as did more than twice as many births as deaths. (By comparison, in West Virginia, deaths outnumbered births.)

Despite the exodus of population from high-tax California, the West leads the nation in population growth. But how does New Mexico fit into the picture? Estimates for all states may be found here. New Mexico and the region look like this:

One year is not long enough to discern a clear trend. Nevertheless this one-year change is consistent with New Mexico’s prior, consistently poor standing for migration trends. People tend to move where they face a brighter future; and New Mexico is not the destination of choice in the West. Only another high-tax state (Oklahoma) does worse than NM in the region.

Amidst all the snow and holiday hustle and bustle, I almost missed the fact that City Council wisely decided not to impose a moratorium on so-called “big-box” shopping centers. Although the regulations on the location and appearance of these stores could be problematic depending on which direction Council decides to go, at least they have avoided imposing an unnecessarily harsh moratorium. Although the Rio Grande Foundation did not take the lead role in opposing these restrictions (we did go on record as opposing them ahead of the vote), it is our hope that their rejection may be a sign that Albuquerque’s Council is beginning to realize that heavy regulatory and tax burdens will harm Albuquerque and push even more economic development out to Rio Rancho and beyond.

To cap on Harry’s blog regarding the encouraging news on eminent domain, the Governor’s announcement is very good news because, should the legislation he has outlined pass, the protections for property owners will be far better than they would have been under the bill he vetoed last year. If you are curious, the final recommendations are available here.
Don’t think that the fight is over, however. The Municipal League has already come out and said they will fight hard against these reforms.

According the the Albuquerque Journal this morning Governor Richardson is proposing to “ensure that government cannot take private property for economic development.”

Richardson’s proposal, which incorporates recommendations from a governor-appointed task force, would repeal the state’s Urban Renewal and Community Development laws.
It also would remove eminent domain power from the Metropolitan Redevelopment Act, a comprehensive economic development statute, said Richardson’s Deputy Chief Counsel Vincent Ward.
The proposal will not limit governments’ traditional use of eminent domain to condemn property for the public use, such as widening roads or to build schools, Ward said. But it would bar the taking of private property for economic development. Many viewed last year’s ruling by the nation’s top court as creating an additional use for eminent domain.

Thanks to Paul and the Institute for Justice for their effective work on the eminent domain issue.

The Environmental Working Group has just published its database in which you can find exactly who is receiving federal farm subsidies. Past recipients of federal largesse have included media mogul Ted Turner and NBA star Scottie Pippen. Who are the top recipients in New Mexico?

I have long felt that the ongoing shortage of body organs for transplants is an artificial result of federal regulations that prohibit any financial incentives for those who — upon death — donate their bodies to save the lives of others. As is so often the case when government policies fail (the United Kingdom and Canada both have similar “no-compensation” policies), additional regulations are adopted. The UK and Canada are now considering rules that would essentially allow the state to “steal” the organs of the dead. The authors of this article suggest we go the other direction by allowing financial incentives for those who choose organ donation.
This seems to me like “Economics 101,” but financial incentives are the only proven way to create desired results while also respecting personal freedom.

On Monday, City Council is expected to vote on a six month moratorium on so-called big box stores. In an opinion piece published on The Citizen I explained exactly why the moratiorium and the placing of additional regulations on big box stores would harm the very low-income residents of Albuquerque that Council normally seeks to protect.

In case you missed it, on Thursday, the Albuquerque Journal reported that New Mexico’s new pre-K program is “falling below national norms in rankings of classroom quality and literacy and math scores.” The full article is available here if you have a subscription.
Although the findings of this study are not conclusive, it definitely demands more study, especially since other studies have found mixed results from these programs as well. Not in New Mexico…Governor Richardson has instead proposed doubling pre-k spending next year. That seems to be the pattern in this state. Start a new program and before effectiveness or lack thereof can be studied, increase its size.

Coyote blog has more interesting commentary on light rail boondoggles here. The rip-off arithmetic he cites is the same relative magnitude as for our Rail Runner and so-far potential streetcar debacles. For example, about LA:

If the core ridership number is 125,000, the highest possible choice, then the total capital cost of the system per rider is $20,000 per rider. This means I was right, that we could have instead bought ever rider a car for the same money. Since the real ridership is probably less than that number, this means we could have bought ever rider a car and had money left over. Concerned about the environment? Then make every car a Prius, which the money would just about cover even without the volume purchasing discount they would likely get.
But what about gas? Well, they say they have a $252 million per year operating loss. This subsidy, which is above and beyond ticket sales, equates to $2,106 (!) per daily rider, even using the higher 125,000 figure. At $2.50 per gallon, this equates to 15.5 gallons of gas per rider per week.
So you can see with the LA numbers, even using the largest possible interpretation of their ridership numbers, the money used for the train could have instead bought every passenger a new car and filled the tank up with gas once a week for life.
Yes, I know, the argument is that the train reduces congestion. Supposedly. I have two responses:
Rail has never reduced congestion in any city. Go see London and Manhattan. In fact, rail seems to encourage urban density that increases congestion.
In Phoenix, where rail will often replace existing lanes of roads, the train will likely carry fewer people than the lanes of traffic used to, so congestion will increase.

Randal O’Toole blogs about the failure of light rail in Portland:

In fact, Portlanders recently learned that their much-praised transportation plans were really nothing more than a scheme by what local reporters call the “light-rail mafia” to separate taxpayers from their money and enrich themselves. Far from relieving congestion or getting people to stop driving, Portlanders are so angry at the congestion and other problems resulting from the plans that they have repeatedly voted against light rail and other projects.
Worst of all, the high cost of these plans has led to a decline in urban services throughout the Portland area. This was illustrated with Dickensian irony in September when a leading member of the light-rail mafia calmly ate dinner at an outdoor restaurant a few feet away from police who were kicking a schizophrenic man to death. The budgets for police and mental health services that could have saved this man’s life had been cut by the city council that continued to subsidize rail transit and high-density developments that enriched the light-rail mafia.
Now, cities such as Albuquerque and Madison are rushing to follow Portland’s example of rebuilding downtown streetcar lines. Yet, despite claims of Portland’s advocates, the streetcar did not get anyone out of their cars or stimulate economic development.

Read the whole thing. You will find some interesting links.
HT: Coyote Blog

Rarely are the cutthroat politics of our nation’s agriculture cartels exposed for average Americans to see, but a recent example of a California dairy man being crushed by the establishment dairy interests clearly illustrates how depression-era federal laws designed to keep the industry afloat in tough economic times are now used to eliminate competition and keep prices (and profits) artificially high.
Agriculture is undoubtedly one of the last great bastions of socialism in this country. Fortunately, groups like the Cato Institute are working to publicize how these policies hurt consumers and taxpayers alike.