Errors of Enchantment Blog Postings

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Why is New Mexico not realizing its potential?
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Feds threaten to cut Maine Food Stamp Funding due to Photo ID component

Fri, 2014-11-21 16:33

To say that Washington is full of hypocrites is to state the obvious. I ran across this article from the Huffington Post of all places which discusses federal opposition and subsequent threats to eliminate federal support for that State’s SNAP (food stamp) program if the state doesn’t eliminate what appears to be a voluntary effort to combat SNAP fraud by putting recipient photos on the SNAP cards.

One would think that having a “free” ID given to some of the neediest people in a given state would be welcomed in light of the Obama Administration’s opposition to “voter ID” laws on the grounds that the poor and minorities are “disenfranchised” by such laws.

It would seem that having photos on SNAP cards could help deter fraud as well. Gov. Martinez’s Administration has of course been working to require certain SNAP recipients work or obtain job training to continue receiving the benefit, a proposal that has drawn the ire of welfare advocates.

RGF actually supports REAL transparency in medical prices

Fri, 2014-11-21 10:46

In today’s paper, Dr. James Tryon questions our own Dr. Deane Waldman for his critique of the Think New Mexico proposal to mandate one form of health care prices transparency.

The thing Tryon doesn’t get and the reason we have serious concerns about Think New Mexico’s proposal is that meaningful prices don’t result from government mandates. They come from market processes. The importance of prices as a too for transmitting information was an important contribution of Nobel Prize-Winning economist FA Hayek.

Health care prices aren’t so mysterious by accident. We don’t need a government agency to mandate that restaurants, retail outlets, gas stations, or even car dealers publish their prices because ultimately those prices are driving by market forces. If government or insurance companies are paying for patient care, those patients aren’t going to care how much it costs. The only way to change this incentive is to restore the doctor/patient relationship which includes getting government bureaucrats and insurance companies out of the middle of our health care system.

As seen in the chart below, only about 12% of US health care spending paid out-of-pocket by consumers, it is no surprise that prices paid by consumers are not particularly relevant. There is a way to solve it, but it involves eliminating the tax advantage employers have over individuals in purchasing health care, repealing much of ObamaCare, and dramatically-reforming Medicare and Medicaid.

The Right to Work bandwagon continues to grow: ABQ Journal endorses it

Tue, 2014-11-18 15:42

The Albuquerque Journal has endorsed “Right to Work” for New Mexico. This is welcome news. Hopefully the Legislature will take notice and that efforts to bring this needed reform to New Mexico will be bi-partisan. Nationwide, at least, support is incredibly bi-partisan for “Right too Work.”

A few notes from the editorial: “Right to work doesn’t threaten unions; it simply forces them to compete for members rather than have captive, dues-paying members delivered to them.”

The editorial concluded saying:

New Mexico needs to diversity its economy:

1. If it wants to insulate itself from the effects of federal inaction/error. (Can you say sequestration? How about furlough?)

2. If it wants to establish a more vibrant jobs sector that employs New Mexicans and draws folks from other places interested in careers beyond the basic functions government provides.

A key to that diversification is being able to compete for employers and employees alike. And that should not be an R vs. D battle. Lawmakers should seriously consider right-to-work legislation as one piece of a broader economic reform package when they return to the Roundhouse next year.

And here is the polling from Gallup on support for right to work across partisan lines:

Tax-Funded Spaceport was never a Good Idea

Tue, 2014-11-18 10:55

The recent crash of Virgin Galactic’s SpaceShip2 in the Mojave Desert was a tragedy for the pilot that lost his life in the accident. It was also a setback for Richard Branson, Virgin Galactic, and the entire private space industry. However, for New Mexico taxpayers, it was only the latest and most vivid sign that building a Spaceport was not a wise use of tax dollars.

The transition from publicly-funded space travel (NASA) to a competitive, private-sector model was destined to be choppy and unpredictable. It is very much an open question how humans will travel safely and regularly into space in private spacecraft.

Even NASA with its multi-billion dollar budgets never quite figured out how to get humans back and forth form space routinely and regularly. The Space Shuttle was originally intended to launch as frequently as once a week. That didn’t come close to happening even in the best of times.

This all leads us to New Mexico where, at the behest of then Gov. Bill Richardson, our Legislature embarked our state upon a spaceport construction project at a cost to taxpayers of $220 million and counting.

A decade after this project was undertaken we have no idea what technologies will be used to fly people to space, whether companies can make space tourism profitable, and whether New Mexicans will benefit economically even if the space tourism industry succeeds.

Unfortunately, while Branson, Rutan, and other space pioneers are putting their own money and reputations on the line to make their space enterprises successful, the folks who unwisely got New Mexico into this mess cannot be held accountable and will suffer no personal losses from their actions.

Bill Richardson is not lying awake at night wondering if New Mexico’s Spaceport succeeds and I know of no legislator or other elected official who lost their race due to their unwise “investment” in the Spaceport.

This is where the Spaceport goes from isolated mistake to cautionary tale. The Spaceport has proven to be a spectacular failure in large part because the people behind it didn’t have any “skin” in the game. This lack of consequences leaves politicians to make decisions based on all manner of personal and political desires.

That is not to say that private sector entrepreneurs don’t fail. Indeed, if you know anything about Steve Jobs, he failed time and again as do most entrepreneurs. But they have their own money at stake and thus have the incentive to make better bets and only make bets they expect to succeed.

Just as governments should not kill businesses through high taxes and onerous regulations, government should not attempt to place bets using tax dollars on favored industries or technologies.

The Spaceport is only the most vivid failure of such government overreach in New Mexico, but we see the Rail Runner piling up ongoing losses and massive “balloon payments” due in the not-too-distant future.

The film industry which the economically-ignorant cite as a great success has actually lost $147 million for taxpayers since 2010 according to the New Mexico Legislature’s own study.

In recent years, taxpayers have also lost $16 million in subsidies for Schott Solar and $19 million Eclipse Aviation.

These wasted tax dollars could have been returned to real New Mexico entrepreneurs in the form of tax cuts to produce jobs and a real economic stimulus to our state. Instead, those scarce dollars have been – and in the cases of the Rail Runner and film subsidies – continue to reduce our prosperity by taking money out of entrepreneurs’ pockets and allocating it to less productive uses.

The good news is that Gov. Martinez doesn’t seem inclined to grandiose spending on spaceports and trains. Hopefully, New Mexicans have learned an important lesson about the promises of politicians and, rather than government micromanagement of our economy – a tendency that has led us to our impoverished state – will support government as referee, not coach.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

Health care market isn’t a free one

Mon, 2014-11-17 16:53

The following article by Dr. Deane Waldman appeared in the Albuquerque Journal on November 16, 2014. RGF president Paul Gessing offered his own thoughts on the Think New Mexico proposal in this blog posting.

Recently in the Journal, my friend and colleague Dr. Barry Ramo spoke glowingly of Think New Mexico’s plan to improve health care in the Land of Enchantment. Unfortunately, the plan, hatched by our own homegrown policy think tank, is off base.

In fact, it brings to mind the famous aphorism, “The road to hell is paved with good intentions.” Think New Mexico is smoothing our way to a blisteringly hot place where we do not want to go.

Their plan advocates enactment of new rules and regulations to:


1. “Require transparency of hospital prices and risk-adjusted quality indicators…”
2. “Outlaw price discrimination…”
3. “Prohibit gag clauses…”
4. “Seek a federal waiver so that Medicaid will pay the same prices as private payers.”

The people at Think New Mexico say they want to restore free market forces with its manifold advantages to the “market” of New Mexico health care.

Freeing the market in health care is a very good idea. What they propose is the opposite.

A highly regulated, tightly controlled free market is a contradiction in terms. You either control a market or let it do its thing. Note the action verbs in Think New Mexico’s first three proposals: require, outlaw and prohibit. They are about as controlling as any words I know.

In the free market, there are no external controls on the two players: Consumers choose to spend or not, and sellers compete. No third party makes decisions for them.

There should be some regulation of the market as a whole, but no mandates as to what specific consumers and sellers can do or cannot do. A free market does not have some who are required to follow the rules while others are exempt.

There are no free market forces when buyers are required by law to buy a specific, government-approved product and only that; where sellers are told what to sell and at what price; and where a third party pays the bill.

The people at Think New Mexico no doubt mean well. Nonetheless, the group is paving the road to hell.

They say they want to “free” the market, yet propose to do so by increasing the number of rules, regulations and restrictions!

You cannot reduce regulatory constraints on a market by adding more regulations. You cannot cure cancer using cancer.

Getting useful comparative shopping information into the hands of consumers would be necessary in a truly free market. But first, consumers need control of and responsibility for their own money. They need to be making the spend/not spend decision rather than the government.

It gets worse. “Price” in health care is a meaningless term.

Everywhere else, price is what the consumer pays to the seller. In health care, the consumer doesn’t pay, and no one pays what the price tag reads. Payment is decided by the federal government, rather than through the balancing mechanism of negotiation between buyer and seller.

So the consumer gets useless information and cannot economize because the spend/not spend decision is made by someone else. That is not a free market.

On the supply side of a free market, various sellers compete for consumers’ dollars based on the true price (cost to customer), features, and quality. Not so in health care, where the market is tightly controlled.

The government, not the seller, sets prices and quality standards. There is no competition between the various sellers of goods and services.

There is competition in one place in health care: between insurance carriers. They compete strictly on price and then make their profit by delaying, deferring and denying the care we need.

Health care is the antithesis of a free market. Think New Mexico’s plan will not make it one. Though the group’s ostensible intentions are laudable, their implementation plan is deeply flawed. It will only smooth our descent to an overly warm clime.

Dr. Deane Waldman, author of “The Cancer In Healthcare,” is an adjunct scholar for the Rio Grande Foundation.

WSJ article provides devastating critique of Virgin Galactic and NM Spaceport

Mon, 2014-11-17 13:08

I have been doing a lot of media relating to the crash of Spaceship Two and the future of New Mexico’s spaceport (much of it British and other out-of-state publications. My view of the crash has been that if it was pilot error or one, easily-fixed mechanical problem, we could see flights in the not-too-distant future, but if there were a series of problems, the situation may be completely un-salvageable.

Well, according to this new story from the Wall Street Journal, it looks like the latter is the case. According to the article, the problems at Virgin Galactic were significant, ongoing, involved the very basis of the a variety of the technologies being implemented, and often covered-up by Richard Branson who nonetheless repeatedly offered rosy launch timelines. This is most definitely bad news for New Mexico.

It is hard to say what, if anything, New Mexicans can salvage out of Spaceport America. The good news is that it will provide limited government advocates an ongoing reminder of government’s inability to predict the “next big thing.”

Rio Grande Foundation Asks EPA to Withdraw its “Waters of the U.S.” Proposal

Fri, 2014-11-14 11:03

(Albuquerque, NM) —The Rio Grande Foundation today joined with 375 trade associations and chambers from 50 states representing a wide range of industries to voice strong concerns with the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers’ flawed proposed rule to dramatically expand the scope of federal authority over water and land uses across the U.S. and called for the proposal to be withdrawn. The effort was led by the U.S. Chamber of Commerce. The comments are available here.

The rule is simply an attempt by Washington, D.C., bureaucrats to take over the economies and the livelihoods of everyone in the western U.S. It has little to do with environmental protection, and everything to do with a political takeover of our most precious resource – making everyone in the west dependent and beholden to Washington bureaucrats.

As the groups’ comments state, “The proposed rule is really about the Agencies’ overreaching attempt to replace longstanding state and local control of land uses near water with centralized federal control. In light of the overwhelming evidence that the proposed rule would have a devastating impact on businesses, states, and local governments without any real benefit to water quality, the Agencies should immediately withdraw the waters of the U.S. proposal and begin again. The current proposed rule is simply too procedurally and legally flawed to repair.”

The comments detail several examples of the impacts of the proposed rule, including:

  • Maps prepared by EPA show the rule could expand federal jurisdiction over waters from 5 million river and stream miles to well over 8 million river and stream miles;
  • The rule would make most ditches into “tributaries.”  Routine maintenance activities in ditches and on-site ponds and impoundments could trigger permits that can cost $100,000 or more;
  • These permitting requirements would likely trigger additional environmental reviews that would add years to the completion time for ordinary projects;
  • Even if a project can get a permit, firms will often have to agree to mitigate environmental “damage” with costly restoration/mitigation projects;
  • The proposal would likely also result in more stringent storm water management requirements, which would affect retailers, companies with large parking lots, “big box” stores, etc.

 

Right to Work talk heating up

Thu, 2014-11-13 17:30

There is a lot going on when it comes to Right to Work in New Mexico. The head of New Mexico’s AFL-CIO chapter recently railed against such a law saying it could “harm the film industry” in an article in Albuquerque Biz First.

Union bosses hate Right to Work because it impacts their bottom-line and ultimately their political power, so this is not really news. I hate taxpayer subsidies for the film industry so I’d consider a bill that makes paying union dues and “fair share” fees optional and hits the taxpayer-financed film industry a “two-fer.” Alas, in the real world, Right to Work’s impact on the film industry is benign. According to Film Production Capital, the top three states for film production are all Right to Work.

The Albuquerque Journal had a front page article today on Right to Work. Carter Bundy, yet another union boss who was given ample opportunity to explain his opposition to Right to Work made several arguments that simply didn’t hold water in the article. Yes, unions must negotiate on behalf of everyone because they have asked for and received collective bargaining privileges. And, he has nothing at all to back up the statement that Tesla not coming to NM had nothing to do with Right to Work. At least one site selection expert cited Right to Work as an important factor in making NM more business-friendly in general and something needed to make our state more attractive to Tesla.

Finally, Grant Taylor of the Hobbs Chamber had an interesting take (in ABQ Biz First) outlining how unions are given substantial advantages over chambers of commerce in being able to collect dues from those who don’t wish to pay them despite the fact that they must represent them.

State subsidies for Amtrak make no economic sense

Wed, 2014-11-12 13:30

According to a report in the Albuquerque Journal, a new study estimated it would cost about $9 million annually to maintain the New Mexico portions of the line used by Amtrak to run trains through New Mexico. If that money is not spent, New Mexico stands to lose between $3.3 and $3.7 million annually.

So, in classic government fashion (especially for Amtrak which has loses about $1.5 billion annually and has lost money for years), repairing the track for Amtrak’s benefit will have a net negative impact of over $5 million annually.

Oh, and lest policymakers get carried away with concerns that a $3 million economic impact is significant, New Mexico’s overall economy is $79.7 billion. amounts to all of .00376% of New Mexico’s economy. In other words, according to the study, Amtrak’s economic impact on New Mexico’s economy amounts to a rounding error.

Rather than subsidizing an already-money-losing national passenger railroad, it would seem that New Mexico should focus its limited economic development attention and resources elsewhere.

Land Commissioner-elect supports state/local land control, responds to Heinrich op-ed

Tue, 2014-11-11 13:23

Land Commissioner-elect (apparent) Aubrey Dunn apparently shared my concerns about New Mexico Senator Martin Heinrich’s statements made in his recent New York Times op-ed. Dunn fired off his own piece which appeared in the Santa Fe New Mexican.

My response to Heinrich’s op-ed (penned alongside Carl Graham) has also appeared in several papers across the state.

It is good to see the newly-elected Land Commissioner take an early stand in support of New Mexico controlling more of its own lands. While current Land Commissioner Ray Powell endorsed the principle of New Mexico taking over certain federal lands, it was not a point of emphasis as it seems likely to be under Dunn. It will be interesting to see how Dunn, Gov. Martinez, and the Republican-led House tackle the issue in the months and years ahead.

Gessing and Webber pre-debate interview w/ Fred Martino on KRWG TV

Mon, 2014-11-10 14:03

Before our debate in Las Cruces (and thus before the election or the Virgin Galactic crash), I sat down to discuss the issues of the day with former Democratic gubernatorial candidate Alan Webber for a discussion with Fred Martino on KRWG’s Newsmakers.

What’s “the Hispanic view” on Net Neutrality?

Mon, 2014-11-10 10:58

Sometimes I’m glad to be just a plain old white guy. That’s what I thought after reading this piece on “Net Neutrality” in the Albuquerque Journal from an apparent Hispanic who takes former Albuquerque Mayor Martin Chavez to task for his work in opposing “Net Neutrality.” There, I agree with Mayor Marty about something after years of (successfully) fighting his administration on streetcars and events centers.

Anyway, the article by Andrea Quijada of the Media Literacy Project (which is funded by a number of major left-wing foundations) asserts that Chavez is not “speaking on behalf of the Latino community” when he opposes efforts by the federal government to micro-manage Internet traffic speeds. Only supporters of “Net Neutrality” can speak for Hispanics. Echoes of Gary King’s assertion that Gov. Susana Martinez doesn’t have a “Latino heart.”

The only true statement in Quijada’s article is that “People like Martin Chavez do not speak for us.” I’m not sure who “us” is, but I agree with that. And neither does Quijada speak for “us.” How about we look at issues based on their merits and unintended as well as intended consequences for all Americans, not some mythical race and gender group-think.

Perhaps it is time for the political left to get beyond the “us and them” rhetoric?

My KRQE interview on the Toby Martinez municipal courthouse restitution/pension situation

Fri, 2014-11-07 09:46

I was asked by KRQE Channel 13 to discuss efforts by the federal government to take funds from Toby Martinez’ (who stole from taxpayers in the Municipal Courthouse scandal alongside Manny Aragon) pension in order to fulfill Martinez’ restitution requirements. Unfortunately, according to my reading of New Mexico law, the Feds can’t tap Martinez’ pension under New Mexico law despite his criminal conviction. Astonishingly, according to the report, Martinez’ pension is worth upwards of $473,000 which is illustrative of the incredible generosity of New Mexico’s underfunded pension systems.

Watch the full interview below:

Right to Work: on the agenda for 2015 session?

Thu, 2014-11-06 14:50

In the wake of the Republican takeover of the New Mexico House, the talk has begun over whether or not the Legislature will seriously consider adopting a Right to Work law.

Our friends at the Heartland Institute have some excellent research and information on right to work and its potential impact on New Mexico (including research from RGF).

Lastly, I had a letter to the editor in the Albuquerque Journal’s Business section on Monday which may have been missed amid all the election activity:


Letters to the Editor
Albuquerque Business Journal

In his column on right to work laws, Marshall Martin concludes that “there is little question having right to work may signify that a state is business friendly, one cannot be certain that having right to work is the deciding factor…”

That is a true enough statement. In the real world, “scientific” studies of economic systems don’t work. “Proof” that right to work is indeed good for the economy is as elusive as is “proof” that any law or system works.

What we do know is that eight out of 10 of the fastest growing states in 2013 were right to work. We also know that between 1977 and 2008, right to work states produced 44.5% more jobs and saw per-capita personal incomes grow 10% faster than states that do not have such laws in place.

Of course, right to work is not only an economic issue. It is a freedom issue. Workers shouldn’t have to join unions or pay union dues if they don’t want to.

It is true that no single economic policy change made by New Mexico’s Legislature is our ticket to prosperity, but a right to work law – which unlike most other “economic development” schemes won’t cost taxpayers a dime – is a good place to start.

So, the Legislature, whatever its partisan makeup, must embrace a variety of pro-market reforms if New Mexico’s economy is to be turned around, but right to work, a policy which according to Gallup is supported by 65% of Democrats nationally, is a great starting point.

Time to kill the southern road to the Spaceport

Wed, 2014-11-05 17:23

According to pre-crash news reports, New Mexico is on the verge of spending $14.2 million to construct a southern road to the New Mexico Spaceport. According to the article linked to above, “That won’t be enough to pay for a full-fledged asphalt road, officials have said. Rather, it will pay for a less-durable type of covering.”

So, under current plans, the road is going to be built more cheaply than officials would like in order to “do something” to improve access to the facility from the south which is now possible only via a gravel road.

It would seem that this road should be put on hold indefinitely given the recent crash and that legislators might want to consider doing something more pressing with the $14.2 million.

Republicans Rule the NM House: a truly historical occasion

Wed, 2014-11-05 09:53

As of Wednesday morning, November 5, it appears that New Mexico’s House of Representatives will be controlled 37-33 by Republicans. See this article from Rob Nikolewski at NM Watchdog for more details and comments.

The last election that saw Republicans in New Mexico elected to control the House also saw former Allied Commander Dwight Eisenhower elected for his first term in the White House (1952). In other words, New Mexico’s Democrats have had a stranglehold on New Mexico’s Legislature for decades. That is at once an impressive display of political power and a cause of many of New Mexico’s economic and education woes.

It is now time for a Republican-led House and a Republican Governor to work together to push the best reforms that can be had in a Legislature that is still half controlled by Democrats with left-wing Majority Leader Michael Sanchez leading the Senate and controlling its agenda.

Only time will tell whether Sanchez is willing to compromise for the benefit of New Mexicans or whether he’ll be an intractable opponent.

Where to next for New Mexico’s Spaceport?

Tue, 2014-11-04 11:33

The recent crash of SpaceShipTwo in the Mojave Desert was a tragedy. Unfortunately, the long-term impact on New Mexicans could be quite negative as well. Whatever economic activity we could have expected from the Spaceport is going to be delayed for years according to experts.

Of course, the Rio Grande Foundation has been a long-time critic of taxpayer funding for the Spaceport. I argued in a recent BuzzFeed article that “Space tourism is far more speculative and dubious than anyone actually knows. It’s like building an airport before the Wright Brothers had their first flight. That’s what New Mexico did.”

Unfortunately, those remarks look all-too-prescient today. New Mexico taxpayers will be further placed on the hook for operations and maintenance at the Spaceport in the years ahead in the hopes of keeping the facility prepared for tourist flights that may never come.

Check out the recent story for Channel 13 KRQE on the potential impact the accident will have on New Mexico’s Spaceport. Don’t think this is a relevant topic in terms of the political conversation? Recently, Alan Webber, the runner-up for the Democratic Party’s nomination for Governor and I debated a variety of issues relevant to New Mexico including the Spaceport. Footage of that is below the Channel 13 story and the discussion begins at about the 54:45 mark.

Who’s grabbing New Mexico lands?

Mon, 2014-11-03 10:34

Recently, New Mexico Sen. Martin Heinrich sounded off in the East Coast liberal establishment’s favorite news outlet, The New York Times, about efforts by the Rio Grande Foundation and others who wish to devolve certain lands currently managed by Washington bureaucracies (specifically the National Forest Service and Bureau of Land Management) to state control. Needless to say, he’s not a fan.

I responded with an article that ran nationally (shockingly, not in the Times) and generated an interesting column on the situation from the Albuquerque Journal’s Washington correspondent Michael Coleman.

I noted in my column that Heinrich (and Udall) enthusiastically supported federal monument designations in both Northern and Southern New Mexico. I was remiss in not pointing out that Heinrich and Udall have introduced legislation to designate an additional 45,000 New Mexico lands as “Wilderness.” This bill is unlikely to pass Congress, but it is very possible that Heinrich and Udall will convince a lame-duck President Obama to “use his pen” to designate the land by himself in yet another federal “land grab.”

RGF on the air this election season!

Fri, 2014-10-31 13:10

If you haven’t already, be sure to get out and vote. Early voting ends tomorrow and, of course, Election Day is Tuesday.


By way of analysis and information relating to the election, Rio Grande Foundation president Paul Gessing will be discussing what’s at stake this election on 770KKOB AM with Scott Stiegler from 5 to 6pm on Monday.

And, if you happen to be in or around Santa Fe or next to your computer, Gessing will be on Santa Fe’s NPR station, KSFR 101.1 FM watching the election returns come in on Tuesday evening from 7pm until all the votes are in or they kick us out of the studios. Fred Nathan of Think New Mexico will also be on the show for what will surely be an exciting evening.

Fishing for justice: video illustrates problem of over-criminalization

Fri, 2014-10-31 08:57

Our friends at Right on Crime have put out a short new video on “overcriminalization,” a problem that has been around for decades but seems only to be getting worse. The case involves a fisherman who allegedly caught undersized red grouper and then threw the fish overboard. Instead of issuing Yates a civil citation, the prosecutor charged the fisherman with violating the “anti-document-shredding” provision of the 2002 Sarbanes-Oxley Act, as if he was destroying accounting records.