I am not making this up. Check out this anti-voucher rant by Diane Denish? And by the way, she is wrong about head start.
I don’t care if she is kinda cute, she and her army of “advocates” will not end up helping the kids.

Today from Chuck Muth: “Despite unanimous support in the state House for dumping President Bush’s No Child Left Behind law – and likely passage in the Senate – Utah’s Gov. Jon Huntsman bowed to pressure from the White House and delayed action on the bill for another month…during a special session to be called just to address this issue. Uncle Sam really knows how to twist arms and break legs when he wants to. And Utah taxpayers will pick up the tab for the unnecessary special session.
At the heart of the matter is the simple principle that the federal government should be strictly limited and the states should be responsible for matters such as education. What’s amazing, under the circumstances, is this comment yesterday from federal Education Czar Margaret Spellings: ‘Ultimately, education decisions are made at the local level, and that’s how it should be.’”
But consider what was said 10 days ago. Are you surprised?

Did you see John’s thoughtful opinion piece in Friday’s Albuquerque Journal (subscription)? “The Valle Vidal is a beautiful section of the Carson National Forest. Substantial natural gas production is being obtained from the adjacent and possibly more beautiful Vermejo Park Ranch. It is believed similar production could be obtained from Valle Vidal.”
Why is it that production, such as drilling for oil or gas, seems easily to coexist with “environmental” uses of land in some cases but not in others? The answer lies in who owns the land. When it is owned privately, its owner has incentive to evaluate production-environmental trade offs. The owner does not want to take excessive risk that the land might be spoiled. The owner simply wants to make best use of the land for its value in the enjoyment of natural beauty, its value in energy production and the threat to its value from environmental harm.
When land is owned by the government, however, these tradeoffs are politicized. Environmental interest groups such as the Sierra Club seem totally unwilling to consider alternative uses or magnitude of risk from environmental harm. These same groups permit production on land when they actually own it.
If you are interested in how ownership incentives improve the natural beauty and enjoyment of land while permitting alternative uses and improving the environment look here or here. Look here for an innovative public land management idea being tried in the Land of Enchantment!

“Things that can’t go on forever, won’t.” Unfortunately, the Guv wants more of the same: “‘We’re talking about people (being hurt by the cuts),’ Richardson said at a news conference at the National Press Club. ‘We’re talking about human beings who are the most vulnerable.’”
I wish he would think about the perverse incentives of Medicaid. Why can’t we give these human beings incentive to help themselves? Why does he insist on such inefficient government intervention?

They just don’t get it. Why do they think “the siren song of collectivist solutions” is going to make things better? There is no empirical evidence either specifically (for example, here or here) or generally to support them. Their wandingerous arguments mainly consist of flippant remarks and personal insults.
I think Milton Friedman best sums up John’s points (subscription) in Capitalism and Freedom:
“…conditions have changed. We now have several decades of experience with government intervention. It is no longer necessary to compare the market as it actually operates and government intervention as it ideally might operate. We can compare the actual to the actual. If we do so, it is clear that the difference between the actual operation of the market and its ideal operation – great though it undoubtedly is – is as nothing compared to the difference between the actual effects of government intervention and their intended effects.”
—Milton Friedman, 1962
Whether it be light rail, pre-K or all the other past and current interventions of government, why do they think the actual effects are going to be anywhere near their indended effects. Aren’t they just engaging in wishful thinking?

Now we find out that the Pre-K initiative was designed by professional educators! And here I have been complaining about our gullibility.

Thanks to Walter Williams:
“After the first three years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. … Beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. … And finally, beginning in 1949, 12 years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. … That is the most you will ever pay.”
– 1936 government pamphlet on Social Security

Did you notice from this story (subscription) in yesterday’s Albuquerque Journal that Department of Economic Development Staffers are prohibited from visiting the Roundhouse during the session? “Secretary Rick Homans said the intent of the directive was to ‘make sure we don’t start getting our wires crossed. We don’t think legislators like it when they see a lot of state employees hanging around the Roundhouse.’ He also said the governor’s office ‘has been very clear about us being very disciplined in how we communicate with the Legislature.’”
This is good political strategy for an administration that seems bent on dishing out political favors in the form of corporate welfare. Matt clarified some of the losses from the game of political favor seeking yesterday. You can expect more commentary on corporate welfare and seeking of political favors in the near future.

Here is an enlightening story of rail mass transit from the Raleigh-Durham-Chapel Hill area of North Carolina. Will New Mexico pay attention? Thanks to Craig Newmark for the link.

I just saw The Aviator. It is every bit as good as you have heard–maybe a little better. The film is being lauded for its historical accuracy. (Though, as is often the case with Hollywood, they left out some of the more interesting aspects of reality. For instance, Hughes’ obsession with germs probably stemmed from his bout with syphilis which was entirely ignored in the movie.)
What I particularly liked about the film was how it portrayed the distressingly all-too accurate relationship that often exists between industry and government. Throughout the film, Hughes competes with Pan American’s Juan Tripp over airline market share. This, of course, would be great for the consumer if the contestants played fair. Instead, Tripp, and to a lesser extent Hughes, compete for unfair assistance from government.
To gain market-share in a free market, firms have to please the consumer–get him to voluntarily choose their product over their rivals’ product. But gaining market share is much easier when you have government on your side. Using government’s legal powers of coercion, firms can force their competitors’ prices up (for instance, with a tariff), or lower their own costs (say, with a subsidy from the taxpayers). In many cases, firms have been able to use government to simply outlaw their competitors by obtaining a legal monopoly. This is more than unfair, it is hugely costly. Intelligent, hard-working people like lawyers, accountants and lobbyists spend their time and money vying for an unfair advantage rather than thinking of new ways to please the consumer.
People often blame the firms and their executives for this unseemly behavior. What The Aviator does so well is to show that this is a government problem not a firm problem. At one point in the film, Howard Hughes is under intense interrogation from Maine’s Senator Owen Brewster. Brewster, known in real life as “the Senator from Pan Am,” had an interest in destroying Hughes’ TWA. Under oral examination, Hughes admits to dolling out gifts to government officials in hopes of gaining their assistance. But as Hughes points out, this is simply the way the government-entwined airline industry works. If you don’t take advantage of government’s unfair help, your competitors will.
The problem is not that business asks for hand-outs. After all, we can’t very well outlaw the desire for wealth. The real problem is that government obliges! This we can outlaw! So, see the movie and learn some economics.

Yesterday’s report is that Utah may be about to opt out of the No Child Left Behind abomination (thanks to Chuck Muth for the pointer). If they do opt out they are saying “thanks, but no thanks to $116 million in federal aid.” “state policy-makers are fed up with federal control of education and dictates.” The Utah legislature appears to be unanimous in wanting to opt out. According to the report, “eight other state legislatures — in Colorado, Connecticut, Idaho, Minnesota, Nebraska, North Dakota, Vermont and Virginia — are considering challenges to No Child Left Behind.”
One can only hope that this is the beginning of the end for the fraudulently titled “no child left behind” act.
The Washington Times further reports today that state legislators are demanding more flexibility.
Unfortunately, in response the Department of Education seems to have abandoned all principles of federalism: “The Bush administration warned that the national conference’s action ‘could be interpreted as wanting to reverse the progress we’ve made.’ ‘We will not reverse course,’ said Ray Simon, U.S. assistant secretary for elementary and secondary education. ‘Children must be challenged to reach their full potential, not told to settle for someone else’s lowered expectations.’” The administration is going to regret its top-down, one-size-fits-all centralized control.
When is New Mexico going to opt out of NCLB?

Chuck Muth reports yesterday:
“School administrators at Austin High School in Austin, Texas, latched onto this new obesity fad/crisis and decided to remove all the candy vending machines on campus. In light of the decision, some enterprising students have stepped into the breach and filled the need.
‘The candy removal plan, according to students at Austin High, was thwarted by classmates who created an underground candy market, turning the hallways of the high school into Willy-Wonka-meets-Casablanca,’ reports the Austin American-Statesman. ‘Soon after candy was removed from vending machines, enterprising students armed with gym bags full of M&M’s, Skittles, Snickers and Twix became roving vendors, serving classmates in need of an in-school sugar fix. Regular-size candy bars like the ones sold in vending machines routinely sold in the halls for $1.50.’
The paper notes that some kids are said to be making $200 a week selling black-market candy in the school’s halls and bathrooms.”
Questions about when this happens in New Mexico:
Will it be exempt from the food tax? After all, candy is a prepared food. Looks like Tax and Rev may have to begin hallway patrols.
How about the entrepreneurs? Aren’t they contributing to the obesity of minors? Looks like APD will have to step up their hallway patrols.
Are these entrepreneurs licensed? Looks like the PRC may have to begin hallway patrols.

New Mexico cannot get over its anti-market mind set. Now big Bill wants to impose price controls in the form of caps on payday loans (subscription):
“Gov. Bill Richardson says he’ll introduce a measure to the Legislature this week that will cap interest rates on payday and car title loans.
‘I’m going to enter the fray and propose a bill of my own that sets a reasonable cap,’ Richardson said Sunday in a telephone interview.”
I have seen only a little skepticism on this bad proposal. Why is it bad? Let’s answer the question by asking some questions.
1. Since there are so many payday lenders, how can it possibly be that they are charging too much for their loans? Wouldn’t an exorbitant rate of profit lead to even more lenders, driving down the charges for payday loans?
2. Similarly, why don’t those who say that payday lenders charge too much enter the market themselves and charge something more “reasonable.”
3. Undoubtedly there are a few borrowers who are misled by these loans. But with all the overbearing regulations now existing, why isn’t our government catching those who commit fraud? Isn’t detecting and prosecuting fraud one of the main reasons we have a government? Why do we want to drive this market underground where fraud will be even more difficult to detect and prosecute?
4. What is so hard to understand about the terms of these short-term payday loans? Example: Lender lends $200 for two weeks with a charge to borrower of $30. Even a borrower educated in NM should be able to understand that.
5. Why do we want to penalize borrowers who act responsibly and will get shut out of the market as a result of this bad proposal? They will suffer more when financial emergencies occur than they would with a payday loan – otherwise they wouldn’t be seeking the loan.
6. Proponents of this bad law are making a big deal out of converting the payday loan charges to an annual rate of interest. But they don’t include the value to the borrower of being able to obtain the loan hassle-free. Why not?
One thing we economists know is that price controls always make matters worse. This bad law will too.

What does a judge get if caught driving drunk in New Mexico? 90 days vacation with pay! I guess that will help make up for the two days in jail(subscription).

Not only will big Bill’s new rail transit be expensive and have few passengers. Those who do ride it will be less safe.

Add the Albuquerque Chamber to the list. Looks like this is another bad idea whose time has come. A few years from now remember you heard it here: the Pre-kindergarten expansion of government will not work.

Matt has passed the biggest obstacle to obtaining his Ph.D. in economics at George Mason University. Matt is a fellow of the Institute for Humane Studies. He has begun inquiry into the efficiency effects of the generality of rules. Does it help when the government grants tax favors or subsidies to preferred groups (the emphasis of the Richardson Administration)? Or, is it better from an economic prosperity standpoint (not to mention fairness) to make everybody play by the same rules?

How gullible can we be when it comes to the pre-kindergarten expansion of government? Answer: really gullible (subscription):
“Gov. Bill Richardson on Tuesday released the results of a poll that showed 83 percent of the New Mexico respondents support a voluntary pre-kindergarten program he is backing.”
I wonder how many would support this feel-good, “for the kids” initiative if they actually read the bill?

The federal government wants its Medicaid bed scam money back (subscription):
“The Centers for Medicaid and Medicare Services demanded the state return funds it paid last year under a now-disallowed bed tax plan designed to generate $22 million in federal funding.”
We are not going to get sane Medicaid policy until we eliminate the incentive of states to rip off the federal purse via the Medicaid match. That should be priority one for Medicaid reform

Where are the skeptics? I seem to be only one of a few. Mountains of evidence to support government pre-kindergarten? How about the mountains of contrary evidence here, here and here? Are you too much into feel-good rhetoric about the kids to check out documented skepticsm? How gullible can we be? Our government doesn’t have a track record of success. And now you believe that Lucy won’t pull the football away this time?
Suggestion: since it looks like we are going to start another expensive government program that won’t work, why don’t we abolish an equal dollar amount of those programs that already don’t work?

Here’s wishing even the wishful thinkers a happy Valentine’s Day. Unfortunately, not everyone shares my sentiment.

Apparently the legislative monopoly in Santa Fe thinks so. Now they want to foist pre-kindergarten on the beleaguered NM taxpayer. Here is what I think:
1)It won’t work.
a) This is interest group politics. Self-interested government bureaucrats and “advocacy groups” gain – it is in their financial interest to implement pre-K. As a result their studies are suspect. Parents are different in their abilities and motivation to educate their children. Children have different abilities when it comes to learning. What did these studies do to control for differences in parents and differences in children? Did they evaluate the trade offs between nurturing by loving parents and “teaching” by “licensed providers.”
b) Government K-12 doesn’t work. And it will not work under so called “reform.” What makes us think the Pre-k will work? How naïve can we be?
c) Touchy feely one-size-fits-all standards don’t allow for differences in parents and differences in children. Example of what they are trying to foist on us: “The curriculum for each program shall address the total developmental needs of the child, including physical, cognitive, social and emotional needs, and shall include aspects of health care, nutrition, safety, the needs of the family and multicultural and linguistic sensitivity, in coordination with other resources for families.” Give me a break! Parents know what is best for their children, not so called experts in Santa Fe or licensed providers.
d) Expands failed government school education monopoly. This will make it even more difficult to turn things around.
2)We can’t afford it.
a) Budget pie can only get so big. There is little room to increase budget, because other states (e.g. Texas, Colorado) are so much better than us. Other priorities such as teachers’ pay raises are likely to suffer.
b) We cannot raise taxes and be prosperous. NM taxes are already too high and going up (compare us to Texas and Colorado). This is not just an assertion. For detailed analysis of the history of taxes and spending in NM go to: http://www.riograndefoundation.org/tops/index.htm.
c) Pre-K will ratchet up uncontrollably after the “mere” $9 million to start.
d) Why do we want to provide more wealth transfers at others expense? This is nothing more than taxpayer funded childcare.
e) How much failed government education is enough? Will this lead to pre-pre-K and so on ad infinitum?
f) This looks like political opportunism pure and simple — politicians taking advantage of gullible public (pictures with the kids) for their own gain.
3)Other help already available (although it, too, is more than somewhat ineffective)
a) Means tested transfers (effect on family of four detailed in RGF publication “Reform This!” )
b) Head Start is a program that does not work. Any gains from the program are totally eroded in short amount of time. Some children are actually harmed because of associations with other children they would be better off never having met. Thinking Pre-K will produce better results than Head Start is wishful thinking.
Unfortunately Arizona is confronting the same nonsense.

Here (subscription required) is a fascinating story of successful efforts to control the high health care costs fostered by government price controls, mandates and tax subsidies for third party payments. With this innovation doctors do not get punished financially for spending more time with patients; and they spend no time doing government required paperwork. The only problem: You have to be large to bring health care in house. Some excerpts from the article:
“Last year Quad/Graphics, one of the nation’s biggest printing companies, spent about $6,000 per employee on medical costs, 30% less than the average company in its home state of Wisconsin. Its 12,000 workers spend fewer days in the hospital and take their medicines more regularly.
Even more unusual: Quad provides most of the care itself. Starting with a small plant clinic in 1990, Quad has brought nearly all of its primary health care in-house. As the whir of its giant presses hums through the waiting-room wall, company doctors and nurses practice everything from pediatrics to gynecology.”
“Quad is fast becoming a model for companies desperate to control double-digit rises in health-care costs. Dozens of companies have toured Quad’s clinics looking for inspiration. Those weighing plans to build their own in-house clinics include Toyota Motor Corp.’s North American manufacturing division, Kohler Inc. and Miller Brewing Co.”
“Some Quad doctors say they were initially skeptical about working in a corporate clinic. “When I interviewed, I said ‘I don’t want to just take care of sore throats,’ ” says Ann Merkow, an internist who left the general medical practice she took over from her father to join Quad nine years ago.
But she says she found it rewarding to work with incentives built around patient health. At her own practice, she says, 80% of patients were on Medicare, where doctors are reimbursed per visit but don’t get paid for preventive care. ‘In the other model, you almost get punished for taking time for patients,” she says, “There were many years I made less than teachers in the area.’”

New Mexico is first! Receiving the most aid has not helped, though, since we are near the bottom in everything good. Is this more evidence that foreign aid really doesn’t work?