Recently, on the pages of the Albuquerque Journal, there has been a debate over whether or not the law school at the University of New Mexico is biased to the left of the political spectrum. Asserting that there is rampant bias at UNM was Christina Hoff-Summers of the American Enterprise Institute while the Dean of UNM’s law school weighed in to assert that there is no bias at the school.
Unfortunately, conservatives who complain about bias at NPR, on PBS, and in the universities should realize that bias is inevitable at institutions that depend on government largesse for their existence. These people are not going to bite the big-government hand that feeds them and when it comes down to it, unless they say or do soemthing truly outrageous as the University of Colorado’s Ward Churchill did a while back, these people are pretty secure in their rather cushy jobs.
Perhaps then, libertarians and conservatives should agree to work together not to change the party identifications of those who are hired and fired at these government-supported institutions, but to privatize them entirely. Michigan and Virginia law schools are de facto privatized and even Berkely is considering the idea. How about it UNM?

We at the Rio Grande Foundation have had our share of problems with some of Governor Richardson’s economic policies, but we wholeheartedly agree with his recent assertion that tax cuts are in order here in New Mexico. That said, however, if the purpose of cutting taxes is economic growth, his narrowly-targeted proposal will have a negligible impact.
Instead, we suggest, as we have in the past, that Governor Richardson continue reducing the state income tax to the point of complete elimination. Blanket rate reductions are always better than narrowly-targeted tax cuts and reducing the top rate further would have a significant, positive economic impact.

The Rio Grande Foundation of New Mexico today published a study that once-and-for-all shatters the myth that Bill Richardson is a fiscal conservative and makes the case for Colorado-style tax and spending limits.
Among other facts brought to light:
Governor Richardson is not just a bigger-spender than former-Governor Gary Johnson, but he is the biggest spender relative to the growth of inflation and population among the last four New Mexico governors (2 Republicans and 2 Democrats);
The average personal income of a New Mexican is approximately $10,000 less than that of the average Coloradoan;
New Mexico not only receives more taxpayer dollars from Washington relative to what its citizens pay in taxes than any other state (yes, we even beat out Alaska), but New Mexico also has more state and local employees per capita than any state but Alaska and Wyoming.
Only by giving taxpayers greater control over tax and spending decisions can New Mexico achieve its full potential.

A tip of the hat to Arwynn Mattix with the Goldwater Institute for this posting.
According to the National Education Association (NEA), “A pure voucher system would only encourage economic, racial, ethnic, and religious stratification in our society.” One wonders how the NEA could reach this conclusion when both the Milwaukee and Cleveland voucher experiences show otherwise.
Rather than encourage stratification, these voucher programs lead to even less segregation, according to two recent reports by the Friedman Foundation. Private schools participating in the programs were found to be 13 to 18 points less segregated than their public school counterparts.
Because students are assigned to public schools based on where they live, there is a significant risk that schools will reflect the racial and economic segregation of neighborhoods. But, “Private schools have more potential to break down geographic barriers, drawing students together across neighborhood boundaries,” explains Greg Forester, author of the reports. And, with the help of vouchers and tuition scholarships, private schools become affordable for more families, eliminating the financial obstacle to private school.
If “America’s success has been built on our ability to unify our diverse populations,” as the NEA claims, then doesn’t their anti-voucher position block the way to an even more successful America?

Check this video on eminent domain out. The sad thing is that gangsters’ views of our property rights are little different from those of our political leaders. Worse still for New Mexicans, while this video was made by a Nevada group supporting an initiative that will be on the ballot to protect property owners this fall, we don’t have the citizen initiative and must rely on Governor Richardson and others to pass necessary protections.

In citing David Henderson’s fine book The Joy of Freedom: An Economist’s Odyssey, George Leef explains why our national economy is doing so well despite our failed school system.
Wake up, New Mexico! You, too, can join in the prosperity.

Given New Mexico’s poor track record on K-12 education, it is no surprise that many of the students entering New Mexico colleges and universities are ill-prepared. But, as the Albuquerque Journal editorialized on Wednesday, it is shocking just how unprepared students are. According to the editorial, “High-performing states have 64 percent of students in upper-level math classes and 40 percent in upper-level science, New Mexico has 35 percent and 21 percent.” The study, which includes a table indicating that New Mexico students receive an “F” in preparation and “D” in completion of their college educations is available here.
The problem here is two-pronged, but in both cases it is caused by government: 1) The simplest way to address student unpreparedness is to reform the K-12 monopoly and put parents back in charge of their child’s education. Only this accountability will cause educational outputs to improve because nobody cares as much about kids as their parents. 2) Rather than using oil and gas revenues to subsidize college tuition for New Mexico students, our colleges and universities need the freedom to adopt real standards and be able to go after the best-qualified students. A merit-based system, not gussied up welfare, will make our higher-education system world class and will force New Mexico’s students that want to go to college to improve their achievement.

After last year’s much-publicized battle over Referendum C and Colorado’s Taxpayers’ Bill of Rights, the conventional wisdom among the media was that the movement to create constitutional protections for taxpayers was dead.
Nothing could be further from the truth. In fact, voters in Maine, Montana, Nebraska, and Oregon, will decide this November whether to adopt their own versions of Colorado’s Taxpayers’ Bill of Rights. Although New Mexico does not have the initiative and referendum process available to its constituents as these other states, the Rio Grande Foundation is working to start the discussion on a similar measure for New Mexico in the upcoming legislative session. Check back soon for information on the need for such taxpayer protections.

It’s not just the governor. Now Bernalillo County is considering a new minimum wage law:

The county proposal, calling for a minimum wage of $6.75 per hour on Jan. 1, will be formally introduced Tuesday at a County Commission meeting.
It will be sponsored by Alan Armijo, chairman of the commission. He said it makes sense to have the same minimum wage beyond the city limits.
“We’re part of this community and need to be consistent,” he said.
After starting at $6.75, the minimum-wage figure would increase to $7.15 the following year, and to $7.50 on Jan. 1, 2009— just like in Albuquerque.

In response to a similar proposal in Missouri, David Neumark (a leading scholar in the field of labor economics and professor of economics at Cal-Irvine) has recently discussed the minimum wage debate in terms non-economists can understand. Here is part of his summary:

The evidence from a large body of existing research suggests that minimum wage increases do more harm than good. Minimum wages reduce employment of young and less-skilled workers. Minimum wages deliver no net benefits to poor or low-income families, and if anything make them worse off, increasing poverty. Finally, there is some evidence that minimum wages have longer-run adverse effects, lowering the acquisition of skills and therefore lowering wages and earnings even beyond the age when individuals are most directly affected by a higher minimum.

It would be nice if our wishful thinkers would consider these economic realities.

Here is my LTE to ABQ Journal in response to yesterday’s LTE by Chuck MIttlestadt:
Chuck Mittlestadt’s letter to the editor of October 4 alerts us to the big oil—Bush administration “conspiracy” to drive down gasoline prices just before the election. After this “political ploy to influence your vote,” according to Mr. Mittlestadt, you should not be “upset when it zooms back well over $3 a gallon right after the votes are counted.”
As I reread Mr. Mittlestadt’s letter I wonder if it is meant to be satire. But assuming it is not, let me point out how Mr. Mittlestadt and others confident of the “conspiracy” theory of gasoline prices can profit at the expense of the conspirators and their fellow travelers. The December contract for unleaded gasoline futures is currently trading at roughly $1.50 per gallon on the New York Mercantile Exchange. All Mr. Mittlestadt needs to do is max out a long position in December unleaded gasoline futures. The exchange limit is 5000 contracts, and each contract represents 42,000 gallons. Do the math: Mr. Mittlestadt can go long for 210 million gallons of gasoline (all that is required is that he put aside little margin in case of an unexpected price drop). If the post election price zooms up by a mere 50 cents per gallon, he will be $105 million richer!
I eagerly await the arrival of December to hear Mr. Mittlestadt and other conspiracy theorists crow about their new riches and the lesson taught to those greedy conspirators.
HARRY MESSENHEIMER, Ph.D.
RIO GRANDE FOUNDATION
Update 10/6/06: Check out Coyote Blog for more insights. There is a nationwide letters-to-the-editor campaign being put on by the economic ignoramuses.

As Harry pointed out, New Mexico’s ranking for economic freedom among US states and Canadian provinces is quite dismal. New Mexico always seems to stand out on a map:

Not so pretty, is it?

New Mexico was near the bottom of the recent rankings of states and Canadian provinces:

New Mexico
New Mexico’s climate for economic freedom has worsened steadily over the past
two decades, to the point that, by 2003, its overall all-government ranking was 50th,
while the subnational fell to 47th after five straight years at 44th. Size of government
helped sink the overall ratings, coming in at 56th all-government and 53rd state and
local. Takings and taxation provided no help, coming in at 48th all-government (in
free fall since finishing 13th just three years earlier) and ranked 48th subnational. In
the labor market freedom area, New Mexico was ranked 41st and 40th. At 10.1%, its
state and local tax burden is well above average, unlike the gasoline tax at 17¢, which
is below average. And don’t try drowning your sorrows; all three alcohol-related
taxes are among the highest in the nation.

Today I was doing some research on economic freedom and uncovered this 1970 gem by Leo Rosten:

Fenwick and a friend of mine from Washington, a sociological Meistersinger named Rupert Shmidlapp, were talking about minimum wages, which Congress had just voted to raise from $1.25 an hour to $1.40—and ultimately to $1.60. Fenwick stunned Shmidlapp, whom I had forgotten to brief in advance, by mournfully remarking that the minimum-wage laws would of course create unemployment, and that these particular laws would wreak havoc precisely among those unskilled workers (Negroes, teenagers, Puerto Ricans) they were supposed to help.
“What?” gulped Shmidlapp.
“To begin with,” said Fenwick, “the American wage-earner today gets twice $1.40 an hour, so the bill is not going to affect him——-”
“The bill is designed to help the unskilled and the undereducated,” retorted Shmidlapp.
“An admirable intention,” beamed Fenwick, “because a tragic proportion of that group is unemployed. But if employers aren’t hiring them at $1.25 an hour, is there any reason on earth why they will hire them at $1.40?”
I poured a stiff drink for Shmidlapp.
Fenwick continued: “Surely the unemployed will have less chance of finding a job under the new, higher minimum-wage laws than they had under the old.”
“What?” cried Shmidlapp. “Can you prove that?”
“Yes,” said Fenwick. “Every time minimum wages have been raised, the ratio of unemployed teenagers has risen— and mostly among Negroes and Puerto Ricans, who are the teenagers it seems absolutely insane, if you look at the crime rate, to force onto the streets with nothing to do! … Don’t you agree that every time you raise the minimum, you must push more unskilled or inexperienced or poorly educated or discriminated-against workers onto the unemployment and relief rolls?”
Instead of repairing his fences, Shmidlapp attacked on the flanks. “What about the greedy employers,” he demanded, “who cruelly exploit their workers by not paying them enough to live on?!”
A twinge of pain crossed Fenwick’s boyish features. “Oh, very, very few employers can hold on to their workmen if they pay them less than the workers can get elsewhere.”
“It isn’t what they can ‘get,’ it’s what they’re worth!” Shmidlapp thundered.
“Only God can decide how much a man is ‘worth,’” sighed Fenwick. “Let us consider the best wage a man can get— for his labor, services or talent——”
“Some men just can’t live on that! Or feed and clothe their children! Or pay their medical bills!” This was Shmidlapp at his best.
“We certainly ought to remedy that,” said Fenwick. “No American who wants to work should go hungry because of the objective (and therefore efficient) forces of supply and demand. Let us by all means give and guarantee the poor a minimum income; that does far less economic and political damage than a minimum wage. A minimum income does not discriminate against the black, the illiterate, the inept——”
“Do you mean to stand there and tell me”—Shmidlapp was too agitated to notice that Fenwick was sitting, not standing— “that no workers are actually helped when Congress raises the minimum wage? !“
“Oh, some workers will have their wages raised from $1.25 to $1.40 an hour,” said Fenwick, “but far more will not get a job they might have gotten at $1.25! And fewer teenagers and Negroes will get on-the-job training, which they desperately need. It is just too costly to train them at $1.40, much less $1.60 an hour—especially for skills that take long training periods. This makes a raise in minimum wages absolutely heartless,” mourned Fenwick. “It prices decent, innocent, willing workingmen right out of the labor market!”
“Then why does Congress pass such laws?” shouted Shmidlapp.
Fenwick blinked. “Are you suggesting that Congress never passes foolish or short-sighted——”
“I am asking why, if minimum wages are so goddam stupid, far-sighted humanitarian leaders like Lyndon Johnson and Hubert Humphrey and Governor Rockefeller support them?!”
“Politics,” chuckled Fenwick. “Or innocence. Or ignorance. Or all three. Politicians and labor leaders get a lot of public credit for raising wages, and considerable private satisfaction in imagining all the good they have done.”
“I happen to know that many business leaders, Republicans and conservatives, favor minimum-wage legislation!” swooped Shmidlapp.
“Of course they do. They can be just as wrong, ignorant, or selfish as anyone else,” said Fenwick. “Many of them are manufacturing products in the North——”
“What does geography have to do with it?” demanded Shmidlapp.
“Well, northern manufacturers are delighted to force up their competitors’ costs in the South; in that way, businessmen in the North won’t have to face the desirable effects of that free-enterprise system conservatives and Republicans love to extol.”
“But opinion polls show that the public——”
“The public,” sighed Fenwick, “is not well-informed about economics, and will pay for its innocence. Increased minimum wages lead to increased costs, which lead to higher ……… Then many honest, low-wage earners in the South (where the cost of living is lower; which is one reason wages there stay lower) will become disemployed. And many more of the young and no-skilled, in Harlem no less than Dixie, will remain more hopelessly unemployed than they already are.” Fenwick regarded Rupert Shmidlapp innocently. “Tell me, honestly: Would you rather work for $1.25 an hour or be unemployed at $1.40?”

Can you guess who Fenwick might be in real life?

Business is business, but as a frequent guest on 106.3FM and a talk radio listener, I am going to miss having that station at the end of my dial. With so few decent radio options available around here and just one talk station, perhaps it is time to make the jump to XM or Sirius?

Last night, I attended one of the City of Albuquerque’s meetings on Mayor Chavez’s so-called “Modern Streetcar Project.” It wasn’t so much a meeting involving give-and-take between community leaders and residents as it was a sales pitch from the City’s Transit Department and the HDR Company which will manage the project.
There was a 30-minute powerpoint presentation and a Q & A session, which did feature lively debate, but the only elected official who actually showed up, Councilman Heinrich, left immediately after making a short introduction. Most of the attendees appeared skeptical of the $224 million project and justifiably so. Although this meeting was designed to convey the sense that this project is a “done-deal,” information on expected ridership numbers, operating costs and subsidies, fares, and operating hours was in short supply.
A few things struck me as particularly troubling:
First and foremost, Heinrich and others constantly compared the $224 million streetcar to the Big I interchange reconstruction which cost $230 million to complete. There is no doubt that the Big I carries exponentially more people and goods than the streetcar will ever carry.
Secondly, while the Mayor’s trolley will be paid for by all taxpayers whether they ride or not, the Big I was largely paid for by motorists and truckers themselves through gas taxes and other fees. There simply is no comparison between the two projects as far as importance to the community is concerned.
Lastly, the people pushing this project say Portland is supposed to be our model. Unfortunately, that just doesn’t hold up to scrutiny. Albuquerque is only 60 percent as dense as Portland and Albuquerque’s metropolitan area has only 40 percent as many people (797,000 as compared to 2 million).
I’m really only scratching the surface of the arguments against this and other rail projects, but as was made clear last night, we won’t have a chance to vote on this. Pressuring City Council to oppose this boondoggle is the only way to stop it.

Here is interesting commentary by Robert Novak on death of the living wage in Chicago. It looks far from over, however. Wal-Mart and Target still face enormous risk of political takings in Chicago.

It is important for opponents of eminent domain to attend the meeting this Thursday of the Governor’s Eminent Domain Task Force. This will be the only opportunity that the public will get to express their opposition to eminent domain abuse.
Pertinent information is as follows: The meeting will be held at 4:00 PM on September 28th (this Thursday) at the Village Hall in Los Ranchos de Albuquerque. The Village Hall is located at 6718 Rio Grande Blvd. NW.
The purpose of the meeting is to allow members of the public to provide comments and suggestions to the Task Force. The Task Force was convened by Governor Bill Richardson following the recent decision of the United States Supreme Court in Kelo v. City of New London, to study the adequacy of New Mexico’s eminent domain laws and determine whether there is currently sufficient legislative protection to prevent the abusive use of eminent domain for economic development purposes.
If you are unable to attend the open meeting, please send comments to the Task Force via mail, fax, or the Governor’s website as follows:
Mail: Governor Bill Richardson
Attn: Task Force on the Responsible Use of Eminent Domain
State Capitol Building, Suite 400
Santa Fe , NM 87501
Fax: (505) 476-2207
Website: http://www.governor.state.nm.us (click on contact the Governor)
Questions concerning the Task Force can be directed to the Governor’s Office at 476-2200.

Despite the fact that I live nowhere near a Rail Runner station and have no real need to ride the thing, I decided to take a ride on the train this morning to see how ridership is holding up. As you may know, the train is still “free,” at least in the sense that it costs nothing to get on, but that will change in mid-October.
Anyway, I took the train from Journal Center northbound at 7:46am and found that the crowds have thinned out considerably as compared to what I’d read in early news reports about the throngs of people aboard. Despite the fact that there were only two cars on the train, I had my own row and there were less than 25 passengers on my car.
When I got off at the 550/Sandoval station, a handful (less than 5) people got off who looked like they were going to work. Most of the rest of the people seemed to be waiting either on or near the train for the trip south. Clearly, 2 months in, a large percentage of the train’s passengers are joyriders.
On the way back south on the 8:20am train, I switched cars and counted 10 passengers on board. When I got back off at the Journal Center station, there were between 10 and 15 people getting on to go downtown, but by no means was the train going to be crowded.
Another sign of the Rail Runner’s declining popularity was abundant parking — the lots at 550/Sandoval and Journal Center were at most half full.
So, what does this all mean? Just that before millions of additional taxpayer dollars are spent on laying Rail Runner track to Santa Fe, perhaps we should more honestly assess whether these trains more resemble shiny new toys that will actually harm our overall transportation network or whether they are in fact serious efforts to better move people from place to place.

I just loved this little blurb from Grace-Marie Turner at the Galen Institute: Wal-Mart announced yesterday that it will soon offer a 30-day supply of nearly 300 generic medicines for just $4 each. Target quickly followed, and surely Walgreens and others will be close behind. Who says that competition doesn’t work?
Wal-Mart’s program is starting in Tampa Bay and will include the entire state of Florida by January, then spread to stores around the country.
Not to be outdone, Target announced it is matching Wal-Mart’s prices in Tampa Bay first, with other stores to follow. Three cheers for Wal-Mart for getting this started!
Generics already are cheaper in the U.S. than in Canada, so how long do you think it will be before we have Canadians coming to the U.S. to get their prescriptions filled here?

There is a lot of talk about the 2005 Energy Bill that passed Congress and the campaign ads in which Patty Madrid criticized Heather Wilson for voting for a bill that contained $2.6 billion in subsidies for the oil industry. Wilson defenders have hit back saying that the Energy Bill was “good for New Mexico” and that all five members of the New Mexico delegation voted for the bill.
So, what is the real story? Well, Dr. Harry Messenheimer recently cut through a little of the confusion by putting “a pox on both houses” by criticizing both politicians for their disinformation about gas prices and the energy industry in general. But, there is even more meat on this bone.
First and foremost, yes, there were very real subsidies in the Energy Bill. In fact, the Energy Bill was far more costly than the $2.2 billion received by the oil industry. The real cost of the Energy Bill is closer to $74 billion. Unfortunately for Madrid, much of that money was spent on nuclear energy, “clean coal,” and the development of “next generation” energy sources.
Is this good for New Mexico? After all, New Mexico is a big producer of energy. Any economist worth his or her salt would say “no, let the market decide.” First and foremost, people need energy from all sources, the only thing subsidies do is alter which form of energy is used and artificially raise or lower demand. Unless the bill specifically encouraged use of energy sources from New Mexico at the expense of other sources of energy, there is no net benefit to the state.
Unfortunately, in New Mexico, the concept of a “free market” might be as rare as a saguaro cactus sighting is within our borders.

Albuquerque Mayor Martin Chavez is acting as if the city itself won the latest lottery jackpot. A week ago he introduced plans for a new, taxpayer-backed downtown sports arena, now he is pushing his latest big-budget idea, a so-called “modern streetcar” running along Central Avenue from Old Town to Nob Hill and from Central Avenue to the Sunport.” (I urge you to check the previous link to the schedule of “town hall” meetings the Mayor is holding on this project and to attend and speak your mind as I will)
Never mind that the cost for this system would be $240 million (split evenly betwen the city and the state) and that although the Mayor has repeatedly called the system “modern streetcar,” it is really just a light rail system that brings all the costs and problems of light rail (cost overruns, slowness of service, and clogged streets among the prominent issues).
Beyond all of the problems associated with light rail is the question that must be asked, “Why do we need light rail running down Central Avenue when the Rapid Ride serves the same purpuse at a much lower cost?” Instead of blowing $240 million on a shiny new toy, Mayor Marty should consider ways to expand bus service to serve more people at a far lower cost, or he should do nothing and let taxpayers keep some of their hard-earned money for a change.

The results are in and it appears that you can fool some of the people all of the time, or at least 58 percent of them anyway. Now, we turn our attention to the so-called quality of life tax increase that will face voters in November.
For more on the deluge of tax hikes that are falling on taxpayers in Bernalillo County and Albuquerque like the monsoon rains did earlier this year, check out this recent missive from the Rio Grande Foundation on the web-magazine The Citizen. By the way, if you are a close follower of the news, especially what happens here in New Mexico, but the Tribune and Journal leave you feeling less-than-fully-informed, I highly recommend bookmarking The Citizen.

Before heading off to the polls, it’s always wise to take a look at the sample ballot, you know, so you don’t end up accidentally voting for Pat Buchanan. Preparing for tomorrow’s APS special election, we find, in English and Spanish:

“Shall the Albuquerque Public School District issue $351,000,000 of general obligation bonds to erect, remodel, make additions to and furnish; school buildings within the district, to purchase or improve school grounds, to purchase computer software and hardware for student use in public schools, and to provide matching funds for capital outlay projects funded pursuant to the Public School Capital Outlay Act?”

This language was erected by someone clearly interested in the bond measure’s passge–plenty of detail of all the good things that will be done for the children, but nary a word on who is going to pay or how much. Who will own this ‘obligation’? How will this obligation be repaid?
Expand on the benefits, obfuscate the costs, and any deal sounds sweeter. The ballot measure should state in plain terms that passage would raise property tax rates by 5.6%, forcing the owner of a $100,000 house to pay an additional $71.32 per year in taxes.
Given that APS only graduates 52.8% of the students who enter its schools, and of those who enroll at New Mexico’s institutions of higher learning, 44.1% need remedial classes, it seems unlikely that APS is adequately preparing its students to face this kind of decision as educated adults.
But this is no surprise coming from a school district better known for its conflicts of interest, for paying huge settlements to administrators with substance abuse problems, and for blaming failing schools on the ‘diversity’ of its own students, than for any success in actually educating.
$351 million that actually improves the education received by APS students might very well be worth the increase in property taxes. But what worth is $351 million in the hands of Albuquerque Public Schools? $351 million dollars breaks out to about $3884.29 for each and every one of APS’s 90,364 students, most of the average private school tuition in this country.
If you were going to spend $3884.29 on your child’s education, would you make out the check to APS?

It really shouldn’t be such a radical, nor should it be such an uphill push in Congress, but it is good to see the Albuquerque Journal throwing its considerable weight behind more transparency in government.
Speaking of “transparency,” although I can’t say for sure whether the Republican Party’s lawsuit on biased location of early voting stations has merit, it seems pretty obvious that locating an early polling station in the Albuquerque Public Schools headquarters for the September 19 school tax hike is a transparently political move. I’m not sure how this problem can be solved, but ways to improve neutrality in voting sites should be considered.