I just saw Mario at lunch and he was a little chagrined that I characterized his blog as “usually-reasonable.” For the record, I am a big fan of his blog and have to date not found an unreasonable post. Perhaps I am subconsciously jealous that his blog is more widely-read than our own?
On another note, I now realize I should not have characterized Joe Monahan’s blog as right-of-center. I apologize if I have offended either Joe or bona fide righties.
Unlike some politicos, we here at the Foundation are not ashamed to admit our mistakes.

New Mexico has a small but growing community of bloggers. Here, in no particular order, are some of my personal favorites:
Mario Burgos: His is a usually-reasonable right-of-center perspective from an active Republican.
New Mexico Politics with Joe Monahan: Another right-of-center perspective from an even more active Republican.
Duke City Fix: A mostly-apolitical mélange from a very diverse group. Their newest writer is a senior at my alma mater!
Albloggerque: A left-of-center chronicle of life around Nob Hill from a socially-conscious educator named Jon Knudsen.
Gregpayne.com: A right-of-center blog from a New Mexico State Representative and ubiquitous commentator.
Democracy for New Mexico: At face-value it would appear that we at the Foundation have very little in common with this decidedly lefty-group. That said, I’ve always believed that libertarians and progressives have a lot more in common than most people think. Both groups are skeptical of “big power,” “special interests” and invasions of civil liberty. Furthermore, both share a deep concern for the plight of the poor and the powerless. Now, if we could only get the progressives to appreciate that the best way to lift the poor out of poverty is to permit free individuals to interact in a free market.
And finally, we have the latest entrant:
NewMexicoMatters: A blog from a self-proclaimed “non-blogger,” this center-left New Mexico patriot’s commentary looks promising. Welcome!

More proof today that New Mexico’s education system is moving (running?) in the wrong direction. As many states and communities around the country are contemplating education reform which would break the public school system’s monopoly on education, we in New Mexico are talking about strengthening that monopoly.
This morning’s Albuquerque Journal reports (subscription required) that six Albuquerque schools are going to start requiring that parents produce four proof-of-residency documents in order to enroll their students. Apparently, there is a concern that these schools are overcrowded. Many suspect that there are students going to these schools who—gasp!—don’t live in the district!
James Monroe Middle School principal Vernon Martinez said that his school is even considering home check-ups to verify residency.
This is very sad.
Wouldn’t it be wonderful to see a day when providers of education are subject to the same level of competition as grocery stores? Wouldn’t it be great to see a day when schools are no longer assigned their customers but actually have to work for them like any other business? I hope that some day every public school in the state will compete with every other public AND private school for the privilege of educating our youth. Economics would predict and empirical evidence has shown that when schools do compete, education standards improve.
When I was in grade school I was lucky enough to have an industrious mother. She and an equally-industrious mother of my good friend worked diligently to navigate the red-tape and get us transferred to Jefferson Middle School. I feel that the education I got there was far superior to what I would have received in my home-district school (which shall remain anonymous). Every year our mothers hunted down the obscure forms and applied for a transfer. My friend and I came from a privileged background. We had parents who could afford to spend the time to figure out how to get around the red-tape. Unfortunately, most in New Mexico are not so lucky. Most are forced to accept the school to which they are assigned. Now it looks like even more students will have to accept mediocrity.

Yesterday’s Albuquerque Journal (subscription required) reported a record windfall in state tax revenue. There are lots of ideas about what to do with the money: spend it on “the kids,” give it back to the people in a rebate, reduce tax rates, etc.
Conspicuously absent is the sort of sentiment expressed by Grover Cleveland when he presided over record surpluses during his first presidential term:
“When more of the people’s sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of free government.”

I wonder how much longer we can call consequences “unintended” when we can actually predict how new rules will modify behavior. This today from NCPA:
With the implementation of the No Child Left Behind Act (NCLB), now
three years old, the amount of information about schools presented to
the general public is at an all-time high. However, the average kid in
a failing institution is no closer to escaping now than before the law
was passed, says Lisa Snell, director of the Reason Foundation’s
education program.
Federal and state legislators have a newfound focus on school
accountability, but scant attention is being paid to the quality of
data they are using, whether the topic is violence, test scores or
dropout rates. Consider:
o In the 2003-04 school year, 47 states and the District of
Columbia reported they were home to not a single
unsafe school, yet, in D.C. alone, the D.C. Office of the
Inspector General reported more than 1,700 “serious
security incidents” in city schools, including 464 weapons
offenses.
o Economists from Harvard University’s Kennedy School of
Government explored the prevalence of cheating in public
schools and found that on any given test, the scores
of students in 3 to 6 percent of classrooms are doctored
by teachers or administrators.
o Administrators often misrepresent the dropout rate by
counting students who leave as transfers and not
dropouts, like in the 2003 state audit of the Houston district
where more than half of the 5,500 students who left in
the 2002 school year should have been declared dropouts but
were not.
These distortions hide the extent of schools’ failures, deceive
taxpayers about what our ever-increasing education budgets are buying
and keep kids locked in failing institutions, says Snell. And experts
believe the incentives for teachers and administrators to manipulate
data will only increase as schools begin to feel the consequences of
low scores.
Source: Lisa Snell, “How Schools Cheat,” Reason, Volume 37, Number
2, June 2005.
For text:
http://www.reason.com/0506/fe.ls.how.shtml
By the way, if you do not subscribe to Reason Magazine you should.

I consider myself fit for my advancing years (although I wouldn’t consider running 50 miles). Now comes this study (subscription):
“Exercise can’t hold off the effects of aging, but it can improve an elderly person’s chances of hanging onto an independent lifestyle, researchers said.”
Darn! At least I am still independent.

Not content with this abomination, the Richardson Administration wants us to blow even more of our tax dollars for corporate welfare.
Here is an excellent primer on why wind power is wasteful and hurts the environment. Why cannot we just let the idiots in California blow their money on wind power fantasies? In the highly unlikely event that they actually come up with efficient, environmentally friendly energy sources NM’s utilities will have every incentive to purchase the power or use the technology.
Thanks to NCPA for the link.
BTW, it looks like the House and Senate are poised to provide billions more in corporate welfare for ethanol subsidies. Will this craziness never end?

Check out this great article in the Washington Post. Thanks to Professor Tabarrok at Marginal Revolution for the link.

In today’s Albuquerque Journal journalist Colleen Heild (subscription) summarizes Bill’s $3 millon marketing campaign for the state. She makes the following statement:
“The $3 million to be spent in the first year under the new contract pales in comparison to what some states spend on such promotions. Texas, for example, planned to spend nearly $14 million on domestic advertising while Arizona budgeted $8.5 million last fiscal year, according to the Travel Industry Association of America.”
Journalists (and even some economists) need to do a better job of interpreting such figures rather than taking them at face value. The three states are not alike. The Bureau of Economic Analysis estimates NM’s 2004 population at 1,903,000; Texas at 22,490,000 and Arizona at 5,744,000.
That means NM’s planned expenditure is roughly 6.5% higher per capita than Arizona’s last expenditure this year. And NM’s planned expenditure is a whopping 153% higher per capita than Texas.
Guess who is going to get the Bill for this marketing? (Hint: It won’t be Bill.) Will Bill’s spending binge never end?
Update 7/25/05: If we calculate the Bill based on personal income in each state, we find that NM’s planned expenditure will take some 18 percent more of personal income than Arizona’s last year expenditure. And we find that NM’s planned expenditure will take some 186 percent more of personal income than Texas’s planned expenditure.

The money is rolling in; but don’t expect to see any tax cuts in New Mexico. No, the big government folks are dreaming up evem more ways to waste your hard earned income.
You can expect a strong objection to this nonsense soon from the Rio Grande Foundation.

But they don’t have a license!

House Republicans are proposing an $11.4 billion fund to clean up water contaminated by the gasoline additive MTBE. According to the Wall Street Journal (subscription):
“The proposal would give makers of MTBE, which has been found to contaminate drinking water supplies in at least 36 states, protection against product liability lawsuits brought by communities facing billions of dollars in cleanup costs.”
The story goes on:
“MTBE, or methyl tertiary-butyl ether, is an additive that in the 1990s became used widely in gasoline as an oxygenate to help reduce air pollution. It since has been found to contaminate drinking water across much of the country when gasoline leaks from underground storage tanks. While its health impact is uncertain, MTBE even at low concentrations causes a foul smell and taste in drinking water. Unlike other, even more toxic, components of gasoline, MTBE flows easily through water because of its chemical composition and isn’t biodegradable, causing particularly difficult cleanup problems.”
I wonder about doing nothing at zero cost; the foul smell and taste suggest that humans will not drink the stuff.
Incredibly, the story does not mention that use of this additive resulted from EPA regulations in the 90’s. Those regulations require that reformulated gasoline (RFG) have a predetermined percentage of an oxygenate such as MTBE. Now refiners are potentially liable as a result of complying with the regulations! Here is a good description of the background and consequent problem resulting from the regulations.

Did you happen to see the small story on page A3 of yesterday’s Albuquerque Journal: Study: Ethanol Wastes Energy (no link available at the Journal’s website). I did some checking; and here is what I found:
“There is just no energy benefit to using plant biomass for liquid fuel,” says David Pimentel, professor of ecology and agriculture at Cornell. “These strategies are not sustainable.”
The study provides these estimates of the energy waste for ethanol:
*corn requires 29 percent more fossil energy than the fuel produced;
*switch grass requires 45 percent more fossil energy than the fuel produced; and
*wood biomass requires 57 percent more fossil energy than the fuel produced.
Ethanol is NOT renewable energy. Moreover, it actually adds to pollution, since it requires more energy in its production than is provided by the ethanol.
Update: The powerful ethanol lobby (you know, the one that has been ripping us off for years — think ADM) was quick to discredit the study. See this, for example. Typical of this group’s self-serving interest, they criticize the scholars for receiving some payment from the energy industry. They don’t criticize the scholarship itself. Did you notice who will benefit by continuing ethanol subsidies and gasoline-ethanol regulations? (Hint: it won’t be you.) The Iowa caucuses should be more fun than usual in 2008.

As the “living” wage debate heats up in Albuquerque, it seems appropriate to stop and remember how we got here.
Of course, we at the Foundation have long argued that minimum wage laws are abhorrent because they harm the very people they are intended to help: the poor. By raising wages above their market-clearing levels, these laws increase unemployment among low-skilled workers. Don’t believe me? Open up any intermediate microeconomics texts such as this one. Or this one. Or this one.
Aside from the economics of the issue, what does the law say? From the very beginning, American jurisprudence held an individual’s right to contract sacrosanct. No act of government could overturn a contract lawfully entered into by consenting adults. An integral aspect of Roman and English common law since time immemorial, the right to contract was codified in the famous Dartmouth College Case of 1819. The trustees of Dartmouth College had entered into a contract with the King of England in 1769. A half century later, the New Hampshire legislature amended the charter without consulting the trustees. The trustees filed suit and the Supreme Court found that New Hampshire had impaired “the obligation of a contract.” The Dartmouth College case was a powerful demonstration that though governments rise and fall, an individual’s sacred right to contract with his fellows shall not be infringed.
The right to contract was again affirmed in the 1905 Lochner decision which struck down a law limiting working hours. The court found that if two consenting adults can agree on terms of employment, government has no right to interfere.
In 1923, an important case raised the issue yet again. A 21 year old woman of the last name Adkins worked as an elevator operator at a children’s hospital in Washington, D.C. According to the court, “[Ms. Adkins] alleges that the work was light and healthful, the hours short, with surroundings clean and moral, and that she was anxious to continue it for the compensation she was receiving.” For its part, the hotel found her “services were satisfactory” and “would have been glad to retain her.” Unfortunately, upon the enactment of a federal minimum wage law, the hospital could no longer afford to pay Ms. Adkins and had to let her go. Thankfully for Ms. Adkins, the court found the minimum wage law violated her right to contract. The court struck down the law and Ms. Adkins returned to work.
In 1936, in Morehead, the court came to the same conclusion in a similar case. Then, in an astonishing move, the court reversed itself just 10 months later in the famous West Coast Hotel vs. Parrish case. The reversal came about because of one man: Justice Owen Roberts. To this day, it remains somewhat of a mystery as to why Justice Roberts reversed himself (some have argued Roberts was trying to appease FDR in order to get the president to abandon his court-packing plan).
In any case, the sacred and ancient right to contract was forever abandoned and minimum wage laws have been legal ever since.
As the city of Albuquerque contemplates a drastic hike in its minimum wage, it seems appropriate that we pause and remember the plight of poor Ms. Adkins. There are many like her today who stand to lose their jobs because some well-meaning folks haven’t taken an economics class.

Economist Craig Newmark of N.C.S.U. recently lauded our own Ken Brown’s calm and reasonable piece questioning the wisdom of light rail in New Mexico. Professor Newmark is not the only one who has taken notice.
I was recently contacted by an acquaintance of mine (okay, ex-girlfriend). She works for a civil engineering firm in Arizona which might be called upon to build our light rail system should it come to that. She was wondering if the Foundation had done any research on light rail in NM. I told her that there have been no comprehensive analyses but that our own Dr. Brown has written a white paper on the subject.
She apparently passed Ken’s piece along to her boss who was not impressed.
He replied: “I guess we’d have to ask the author to point out a freeway in Albuquerque that pays for itself. The worst part of this thing is the name of the organization: ‘The Rio Grande Foundation.’ They do that to get some aura of respectability they can’t get if they refer to themselves as what they really are. The “Anti-Everything Naysayers” just doesn’t have much of a ring in the media…”
Slightly chagrined, this was my reply:
“Wow. How nice. If I may defend my organization, I believe that our small PhD-laden staff gives us an “aura of respectability.” We have three emeritus economics professors, a former CEO, a former governor’s senior policy advisor, an under-secretary from the Commerce Department’s division of Economic Affairs and, of course, me! Several of our staffers have long lists of publications in peer-reviewed academic journals and all of them have published widely in more popular formats.
As for his suggestion that roads cannot be made to pay for themselves, I’m afraid he is sorely mistaken. To start with, most of the early turnpikes in America were private. Despite onerous price regulations, many of them were quite financially successful. And as for today, the examples of financially-viable private roads are legion. I actually drive on one in Virginia called the Dulles Greenway on a semi-regular basis. Its prices are reasonable and its condition is exemplary. Private roads have also worked in California, Chicago, Israel, Hungary and Chile. It is often these private roads that pioneer new technologies like congestion-pricing.
Economists aren’t anti-everything, just anti-waste.”

Kudos to Rio Grande Foundation’s Tim Walsh. Tim is running 50 miles (yes, 50 miles!) Saturday to raise money for Educate New Mexico scholarships. The Albuquerque Journal provides good coverage today (subscription). Excerpts:
“Walsh says combining his passion for running with his passion for school choice is natural for him. He says that’s how he came up with the idea of a “donor challenge” to help raise money for additional scholarships for Educate New Mexico.
Donors can pledge from $1 a mile to $20 a mile through Educate New Mexico’s Web site: www.educatenm.org.”
As I pointed out earlier, since contributions are tax deductible, a donor who contributes $1,000 ($20 per mile for Tim’s run) will be able to put $1,500 into scholarships at a cost to him or her of only $679 net-of-taxes!
Readers, please help. We really do have some school choice in New Mexico.

People often think of the U.S. as a bastion of economic freedom. In the 19th century there could be little doubt that it was. With a strong commitment to the rule of law and property rights, low taxes, moderate tariffs, and almost no federal regulation of commerce, no place on Earth better-exemplified the “natural liberty” of a free market for which Adam Smith so passionately argued.
Today, the U.S. is no longer conspicuous for its economic freedom. Sure, we have drifted closer to a command-and-control economy than many thought possible. But perhaps more importantly, the rest of the world has caught on to Adam Smith’s timeless lesson: economic freedom leads to economic prosperity. Hong Kong, Ireland, Estonia, the United Kingdom and even Chile have all undergone remarkable market liberalization in the last few decades. Not coincidentally, all have prospered–outpacing their neighbors in almost every measure of economic well-being.
In the last few years, even the former communist nations have caught on. Latvia, Estonia, Lithuanian, Russia, Ukraine, Slovakia, and Romania ALL have flat taxes! Two weeks ago, Russia took one further step and abolished its death-tax.
Many of these nations have been slow to develop a strong commitment to the rule of law or property rights. And indeed, these prerequisites for prosperity are some of the more difficult to establish (sadly, they seem difficult to maintain, even here). Nevertheless, we could learn a thing or two from our former enemies.

Albuquerque is ranked 27 out of 50 cities for high-deductible health insurance plans according to research by eHealthInsurance. Of course we could do much better if we did not penalize such plans. Thanks to NCPA for the link.

It is good to see Bobby Wolff’s bridge column back in the Albuquerque Journal today.

Not likely according to this (thanks to Craig Newmark for link).
While you may now have confidence in getting good value for housing in Albuquerque, this will not help.

Is it any wonder that NM’s economy grows more slowly than other states’ economies? NM cannot control spending and taxing.

New Mexico has its own version (subscription) of the Folk Song Army. Here is a sample of the hyperbole (good intentions notwithstanding) of the misguided rationale of redistribution:
“As long as the majority of our state’s children are living in or very near to poverty— without the basics they need today, and the hope of a better tomorrow— we will certainly be advocating for increased spending on education, health care, child care assistance and other essentials before tax cuts that benefit only upper-income earners. We believe in accountability to our children, as well as fiscal responsibility and sound policy making.”
As Arnold Kling points out:
“In short, the Folk Song Army believes that redistribution will cure poverty. The squares believe that market institutions will cure poverty. Most of the emotion seems to be on the side of the Folk Song Army. Most of the evidence seems to be on the side of the squares.”
I am one of those squares who are convinced that market institutions will cure poverty.

With thanks to the Bluegrass Institute:
The Founders’ Cornerstones
In this modern age, when we commemorate the 229th birthday of these United States, we may recite the rightness of our Declaration of Independence from Great Britain:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
Less often, though, do we ponder how the Founders of our nation came to this understanding of legitimacy in government.
The magnificent document from which the above passage is taken defines the basis of our Republic, but whence arose the ideas that impelled the Founders to set our nation off on the path of separation from rule by the kings of England? These precepts are a distillation of the free English laws in which the American colonists were schooled before setting foot on this land, where the colonial Americans became steeped in the experience of life in conditions of freedom.
Thus, the cornerstones on which the Founders built our new country were religious liberty, sanctity of personal property, practical exercise of freedom in daily living, and necessity of self-government. These were laid deeply in the manners and principles by which the earliest American colonial settlers made their way in the New World, during the century before the Founders concluded that we must embark on a course of nationhood.
In the Declaration, our Founders criticized King George III, saying, “He has refused his Assent to Laws, the most wholesome and necessary for the public good.” Could this charge not as readily apply to U.S. judges striking down laws people believe to be just as essential today?
Our Founders continued criticizing the King, noting, “He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.” Although more subtle and insidious, our courts today have “repeatedly dissolved” the actions of our “Representative Houses” in “opposing with manly firmness” the judiciary’s “invasions on the rights of the people.”
Hence, the colonists felt the profound injustice of the British king’s deviation from adherence to the laws underpinning his reign, which led to the break in 1776. As the Founders noted, “But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States.”
Reading these charges today, especially in light of the Supreme Court’s assault in recent weeks on the U.S. Constitution — the document that implements the Declaration’s principles in practical government — we should wonder, are we indeed the heirs of our Founding generation? Two indictments are suspiciously aligned with allegations we could, and perhaps should, lay against our U.S. courts.
Consider this charge: “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.” Could this not as easily describe the Supreme Court’s decision permitting governments to take the private property of one citizen and bestow it on another who is expected to pay more taxes?
Add this: “For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments….” This past week’s Supreme Court decisions in regard to Kentucky and Texas governments, acting under their state charters to acknowledge God and the Ten Commandments, could be argued to have abolished their “most valuable laws” and “fundamentally altered the forms of those governments.”
Are these parallels remarkable? Or does growing tyranny present the same face wherever it appears?
Founder John Adams made an eloquent case for both private property ownership and public religious observance:
“The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If ‘Thou shalt not covet’ and ‘Thou shalt not steal’ were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free.”
We would do well this Independence Day 2005 to ponder them, and to pray that we ourselves will have the courage of purpose and strength of character to put back aright those cornerstones so carefully laid by our Founding Fathers.
– Reprinted in this abridged form courtesy of The Federalist Patriot, free by e-mail at http://FederalistPatriot.US

At least she dissented in the Kelo and Medical Marijuana decisions.
But other than that she seems to have forgotten that she took an oath to uphold the constitution. Here is Chuck Muth on some of her swing votes:
“Well, there was that 5-4 affirmative action decision in which “The O.C.” was the swing vote. That’s the one which said some racial discrimination in college admissions is OK, while other racial discrimination isn’t. And that certain racial discrimination policies are OK today, but might not be OK 20 years from today. Reflect on that one.
And then there was the 5-4 decision in which “The O.C.” was the swing vote upholding the blatantly unconstitutional McCain-Feingold law which bans political advertisements by most Americans (but not the liberal editorial pages of the Washington Post or the New York Times) which are critical of candidates in the final 30 days of an election. Yeah, that’s something to reflect on.
We should also reflect on “The O.C.’s” embrace of the practice of using international law and court opinions as the basis for Supreme Court decisions, rather than that silly, old, antiquated, outdated U.S. Constitution thingy.
And then there was O’Connor’s swing vote which overturned a ban on one of the most grisly surgical procedures ever devised by man: partial-birth abortions. Even most pro-choicers find this procedure to be a bridge too far. But not “The O.C.” Sucking out the brains of an infant and killing it inches away from delivery. That’s certainly something to reflect on.”
By the way, if you do not already subscribe to Muth’s newsletters, you should.