Errors of Enchantment Blog Postings

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Why is New Mexico not realizing its potential?
Updated: 31 min 20 sec ago

2 great op-eds in today’s ABQ Journal: Teacher federal lands & merit pay

Wed, 2014-06-18 17:03

The Rio Grande Foundation hosted a discussion in Albuquerque on June 17 with Carl Graham of the Coalition for Self Government in the West. Carl had an opinion piece in today’s Albuquerque Journal detailing the reasons and potential benefits were New Mexico to demand and receive lands currently owned and managed by Washington (BLM and Forest Service).

A second, equally important piece was written by my colleague on the Board of the virtual charter school, New Mexico Connections Academy, former New Mexico Sen. Mark Boitano. In his piece, Boitano outlined in detail why effective teachers are so important for improved educational results, how pay for performance can help improve the quality of teaching, and what Connections Academy is doing, within the limits of New Mexico law, to retain the best teachers.

Both initiatives have great potential to improve New Mexico economically and educationally (our federal lands can generate a far better return for schools and our education system needs to improve to build a 21st Century work force). Gov. Martinez has been supportive of both efforts (particularly the latter in approving Connections Academy over the objections of the PEC). It is time for the Legislature and the rest of New Mexico’s leaders to step up to do better.

Federal energy policy regulator could negatively impact New Mexico

Tue, 2014-06-17 21:47

Though many New Mexicans may not be aware of it, especially given our state’s ongoing economic struggles, New Mexico is in the midst of a boom in energy development. New Mexico has vast deposits of oil and gas that can help our state transcend its struggling economy, leading to better jobs and higher wages.

Just ask the people of North Dakota, whose oil and gas production has resulted in an unemployment rate of less than 3% and fast-food workers being hired at $15 per hour. How important is New Mexico’s energy development? Nearly one-third of all state funding to public schools, as well as to New Mexico’s higher-education institutions, comes from taxes, royalties and fees paid by oil-and-gas operations around the state.

The main threat to New Mexico reaping this huge windfall is an anti-oil and gas movement in our nation’s capital, the same one that has put the Keystone Pipeline project in limbo. Leading this charge is Nevada Senator Harry Reid, who wants hand-picked energy novice Norman Bay to lead the country’s premier energy agency, the Federal Energy Regulatory Commission (FERC). With Bay at the helm of FERC, New Mexico’s energy boom can be stopped,

FERC regulates natural-gas pricing and pipelines as well as natural-gas export terminals. New Mexico’s ability to stoke its economy through the exploration and production of clean, efficient natural gas hinges directly on decisions made by FERC.

The Commission’s current, acting chair, Cheryl LaFleur, is a seasoned veteran of the energy sector and a respected expert on energy regulation who is on record in favor of quickly processing new export terminals to sell natural gas from New Mexico and other states amid surging world demand.

The White House, however, has nominated energy novice Norman Bay to chair the commission and set the agenda on such crucial policies. Elevating the largely unknown Bay— Politico calls him a “man of mystery”—to the pivotal position of chair could have significant, negative impacts on our State’s thriving energy sector. The chair of FERC holds powerful sway over its agenda and staff in ways that average members do not.
Unfortunately, perhaps as a personal favor to a former colleague, Gov. Martinez has endorsed the appointment of Bay to the FERC although not specifically the powerful position of chair.

The Obama Administration has a dismal record on the development of America’s energy assets despite the obvious importance these strategic natural resources play to states like New Mexico. The Washington Post says, “If foot-dragging were a competitive sport, President Obama and his administration would be world champions for their performance in delaying the approval of the Keystone XL pipeline.” Now the Obama White House—heavily lobbied on the issue by fringe activists—aims to do the same for liquefied natural gas (LNG) export terminals. As it is, there are two dozen applications for new export terminals awaiting FERC approval.

The Rio Grande Foundation has previously estimated that New Mexico could see an immediate increase in economic output of $200 million and the addition of 2,000 jobs immediately if LNG exports were encouraged rather than discouraged by Washington.

Senate Majority Leader Harry Reid said in an interview this week that he wants Norman Bay as Chairman of FERC, not Cheryl LaFleur. The last guy Reid picked for Chair, Ron Binz, could not get confirmed after calling natural gas “a dead end.”

An FERC chair who implements an anti-natural gas agenda—rather than serving as the neutral arbiter the FERC needs—could cut short our state’s strides in energy exploration.

To be sure, Bay’s appointment as chair over a commission on which he has never served, and has little background, makes little sense in terms of good government. Of even greater concern, though, are the troubling implications for New Mexico.

Ideally, Gov. Martinez should take a closer look at the views Mr. Bay holds as they relate to energy issues in general and LNG exports in particular. Absent a broader evaluation of Bay’s record, we hope that Martinez clarifies that her support for Bay is simply as a member of the FERC as opposed to its chair.

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

Can Gary King make hay on the economy? He needs to do better than his first ad

Mon, 2014-06-16 13:56

Today’s Albuquerque Journal contained the latest admission (this one by Republican legislator Jimmie Hall) that New Mexico’s economy stinks. The article made a bunch of points about our state’s poor economic performance, but almost willfully refused to come to conclusions (like blaming New Mexico’s lack of economic freedom).

Enter gubernatorial candidate Gary King and his first ad which can be seen below:

The good news is that King actually mentions two specific policy reforms that he’d support (I respect politicians that actually put specific ideas on the table): raising the minimum wage and mandating “equal pay” for women. The bad news is that not only are these policy ideas bad, but they are also exactly what one would expect from a “run-of-the-mill” liberal Democrat. At very best, raising the minimum wage will do little economic harm in terms of lost jobs while giving a small group of low-wage workers a small boost, but this is hardly a policy move that will turn New Mexico’s economy around.

The “equal pay” idea is even sillier. Passing a new regulatory regime to track the pay of men and women will do nothing for the economy.

Rather than burdening New Mexico’s struggling economy with even more regulations, I’d love to see King break free from the leftist “splitting up the fixed pie” mode of economic thinking and instead put forth some ideas that expand the pie by acknowledging that the private sector drives prosperity across all income levels and gender divides. Oh, and if you want to work at Wal Mart and make $17 an hour, you don’t need a higher minimum wage, you can do that right now in North Dakota.

Sen. Heinrich has it wrong on student debt: time to end the federal student loan program

Mon, 2014-06-16 08:54

There was Sen. Heinrich on the pages of the Albuquerque Journal this Sunday arguing for Congress to (again) intervene in the federal government’s student loan program. The idea of The Bank on Students Emergency Loan Act is to allow students to refinance their debts down to today’s market rates.

The bill before Congress merely rearranges the deck chairs on the Titanic and the sinking ship is the student loan program which seems to do more harm than good. Rather than making college more affordable, the loan program has helped drive tuition higher:

The truth is that Washington should find the quickest exit it can from any involvement in student loans. After all, if government needs to be involved at all, the states which run most of America’s universities, would be more innovative and realistic about getting students to attend college (or not) and financing it than Uncle Sam. Instead, Washington, with its ability to go into debt and print money just throws more money at the “problem,” the solution for which is negatively impacts large numbers of college loan recipients who don’t understand the importance of studying in a field with viable career prospects or the power of compounding interest.

New Mexico sticks out like a sore thumb on economic liberty in the Southwest

Fri, 2014-06-13 12:48

Recently, New Mexico saw the following bad jobs news. Specifically, New Mexico is losing jobs while its neighbors are gaining jobs.

But why is New Mexico economically-weaker than its neighbors? We have repeatedly made the case that New Mexico is less economically-free and is less friendly to business. This is not a view isolated to a few reports, rather it is a consistent finding of those who report on such issues. The Rio Grande Foundation recently looked at eight separate rankings of business friendliness and economic freedom (see them below with appropriate links). They measure different things, but consistently find New Mexico to perform worse than its neighbors.

Mercatus Center (personal freedom scores were eliminated from our state rankings): New Mexico’s score: 28; regional average: 16.
Fraser Institute Economic Freedom: New Mexico’s score: 50; regional average: 12.
Forbes: Best States for Business: New Mexico’s score: 45; regional average: 15.
CNBC: Best States for Business: New Mexico’s score: 36; regional average: 17.
Chief Executive Magazine: Best States for Business: New Mexico’s score: 30; regional average: 11.
Tax Foundation: Business Tax Climate: New Mexico’s score: 38; regional average: 17.
Federation of Tax Administrators (Taxes as Percent of Personal Income): (note, since FTA ranks heavier burdens with a lower number, we have inverted the ranking so as to make the lower number “good” or more friendly to business and work and the higher number “less-so”: New Mexico’s score: 36; regional average: 16.
ALEC Rich States, Poor States: New Mexico’s score: 37, regional average: 12.

We put together the following map which illustrates the average scores on these various reports below. Clearly, New Mexico trails its neighbors when it comes to business friendliness and economic freedom.

Oklahoma has adopted 401K-style retirement for new government workers…could New Mexico?

Thu, 2014-06-12 17:08

The Rio Grande Foundation recently proposed the idea of placing all new government workers into 401K-style “defined-contribution” retirement plans as a common-sense and relatively popular free market reform for New Mexico (number 9 on the list). After all, the concept is supported by 70 percent of workers nationwide with only 22 percent opposed, according to a recent poll. See graphic below for details:

Government workers have a bit more heartburn about the issue, but are still supportive by nearly 2:1.

The bad news is that a similar transition has not been floated by Gov. Martinez or any legislator/candidate that I’m aware of. The good news is that the idea is spreading and has spread to neighboring Oklahoma which recently adopted 401k-style pensions for new government hires. See the nifty graphic below which documents the spread of such “defined contribution” plans.

As I wrote in our recent issue brief on the topic, “A defined contribution system would allow those workers to save more or less based on their own needs at particular stages in their lives. Ultimately, while labor union leaders prefer to have their members’ interests tied to government and the political system (and the unions), a shift to individually-controlled accounts undermines the one-size-fits-all mentality perpetuated by unions while also empowering workers.” The other major winners are, of course, taxpayers, who no longer face the spiraling costs associated with “defined benefit” pension plans.

We’re number one? New Mexico has more MRAP’s than any other state….let alone per capita

Tue, 2014-06-10 13:02

According to the New York Times, it looks like the Land of Enchantment is also the land of Mine-Resistant Ambush Protected (MRAP) armored vehicles provided to local law enforcement units. See article here and graphic below:

According to the story, New Mexico has an astonishing 42 of these vehicles out of the 432 that have been distributed nationwide, and, while I’m a bit fuzzy at counting the squares, it looks like that gives us more of these vehicles than any other state in the nation. As if that weren’t enough, we have nearly 10% of these military vehicles for 0.6 percent of the US population.

From a taxpayer perspective, the use of this type of material is a questionable investment (especially in rural areas). From the perspective of police interaction with the public (an issue of some relevance here in Albuquerque), the use of such war machines also can’t be helpful. Where are New Mexico’s 42 MRAP’s? I don’t know for sure. There appears to be one in Hobbs and it looks like Clovis has one, but we’d be interested to know where they all are. Drop us a line in the comments section. Please provide a news link or some evidence if possible.

No need to raise property taxes in Bernalillo County

Tue, 2014-06-10 09:05

At tonight’s Bernalillo County Commission meeting, commissioners will be voting to put a $1.5 million property tax hike on the ballot. As the story below indicates, if approved, the tax hike will go to pay for “open space.”

There are several reasons to vote against a tax hike including the ongoing poor economic conditions in the Albuquerque Metro area, much of which is within Bernalillo County. Our city was recently ranked 360 out of 379 on several economic indicators. I’m sure a tax hike will not help turn around our economy.

Albuquerque already has the heaviest property tax burden of any city in the State. As of 2012, the millage rate (the rate at which property is taxed) for average property owners exceeded 41. The next highest rate in New Mexico was Rio Rancho’s 35. After that, Santa Fe weighed in with a paltry 20. Albuquerque residents also bear a property tax burden that is 20 percent heavier than the next-highest New Mexico city.

Lastly, Bernalillo County already spends $1.2 million annually on open space. If adopted, will County residents actually see any additional open space or is this simply a tax hike designed to increase overall spending or cover for recent financial troubles.

What Zuckerberg can learn from Bono

Mon, 2014-06-09 12:26

Apparently, Facebook tycoon Mark Zuckerberg didn’t learn his lesson the first time…or he is so desperate for positive PR, that he will waste millions of dollars on fluff projects that don’t actually achieve anything. I’m referring to Facebook CEO Mark Zuckerberg’s latest donation to a government school monopoly ($120 million to San Francisco Public Schools).

I previously wrote about Zuckerberg’s misguided philanthropy here. Miami Herald columnist Glenn Garvin had a great article deconstructing Zuckerberg’s unwise charity that appeared in today’s Albuquerque Journal.

Of Zuckerberg’s donation to the Newark Schools, Garvin had this gem:

“The result might be titled No Consultant, Bureaucrat or Union Goon Left Behind. Consultants took $20 million right off the top, routinely charging $1,000 a day for services like public relations, human resources and other stuff that’s been around since the beginning of corporate time but which apparently had to be reinvented for Newark.”

The good news is that people can change. Remember the musician Bono who was once the world’s leading spokesman for foreign aid (another means of well-intentioned people propping up failing systems)? Now, Bono has come around to saying, “Aid is just a stopgap. Commerce [and] entrepreneurial capitalism take more people out of poverty than aid.”

It’s a start, maybe someday Zuckerberg will realize that school choice and a healthy infusion of free market forces (choice and competition to name a few) will do more to benefit American students than pouring additional millions into broken systems.

Martinez/Skandera education reforms having positive impacts

Fri, 2014-06-06 09:35

We’ve been reporting on New Mexico’s abysmal graduation rate performance according to the national “Diploma’s Count” report for years. For example, it was just 54% back in the 2009 version of the report.

But, as the Albuquerque Journal noted in its top story today, the latest edition of the report shows New Mexico schools to be making significant gains, the greatest improvement since 2007 of any state in the nation. We’re still 44th, but we’re moving in the right direction.

A few points:

1) Clearly, the Gov.’s reforms are having significant, positive impacts;

2) Improving from 50th to 44th is good, but 44th is definitely not good enough. We need to continue with the Gov.’s reforms and convince the Legislature to adopt more significant reforms like improved school choice options to achieve even greater improvements;

3) The Gov.’s critics need to explain why New Mexico is seeing such tremendous improvement despite their extremely loud protestations.

4) Perhaps the push to tap the permanent fund for an expensive new Pre-K program can be put on hold. Clearly, New Mexico’s education system CAN improve its performance on existing resources absent a massive increase in spending.

We’ve only scratched the surface in education reform with some significant improvements. It is time for the Legislature to embrace the Gov.’s reforms and come up with some innovative ideas of their own.

Indian Health Service stinks, but we support single-payer and ObamaCare…

Thu, 2014-06-05 17:07

Barbara K. Webber heads Health Action New Mexico and had an opinion piece in the Albuquerque Journal recently. The basic message of the piece is that ObamaCare is great and that New Mexicans should be thrilled by this wonderful new law. But a secondary message of the piece is that Native Americans will also benefit from the new law.

As Webber notes:

Native Americans in New Mexico also stand to benefit from better access to health care plans – particularly important for our state, where they make up more than 10 percent of the population. Improving access and quality of care is something our tribal communities desperately need.

Native Americans in New Mexico experience large health disparities compared to the rest of the state and are more likely to be sicker and die younger. They also are face unique obstacles in access and affordability of care.

This set off my radar as the Indian Health Service, like the VA (which is in the midst of a scandal which I discussed here), is a single-payer system.

So, ObamaCare, which is not quite single-payer, but is taking us in that direction, is going to pick up the slack for the Indian Health Service which is causing problems in terms of access and affordability of care…interesting. And, just to be clear, Health Action supports single payer.

The only answer is market-based reforms to our health care system, but that won’t happen until ObamaCare fully implodes and Republicans stand up to the insurance companies by moving insurance to the sidelines (and putting power back in patients’ hands) in US health care.

Mora County’s Fracking ban could be in trouble

Thu, 2014-06-05 11:10

The electoral process can be slow and is imperfect, but it may have solved Mora County’s ban on fracking (and all oil and gas extraction). The County’s ban was passed on a mere 2-1 vote and, as Rob Nikolewski reports, one of the ban’s supporters lost handily to a candidate who expressed support for at least some oil and gas drilling in the County.

Overturning the ban may not be the Commission’s top priority, but as the lawsuits and the costs of said lawsuits pile up, it would appear that the hard-core opponents of oil and gas have been replaced by those who are likely to avoid costly legal battles by allowing private land owners to generate income — including income from oil and gas — from their lands. This is undeniably a good result of Tuesday’s primaries.

Health care spending crowding out other federal aid to states

Wed, 2014-06-04 17:24

Check out the chart below:

It’s from Pew Foundation and it illustrates how Washington’s explosion in Medicaid and other health care spending due to ObamaCare and how other payments from Washington to the various stats are shrinking. No matter how you look at it, health care spending is “crowding out” other funding to the states. This could be seen as a good thing or a bad thing, but it is hard to believe that Washington would have cut spending in these other areas without such massive growth in health care.

Arguably, this is just another indicator that Washington’s role is moving from “doing things” like building roads to simply making transfer payments from one group to another in the form of welfare payments.

Lands issue in NM: a real opportunity for conservatives to appeal to Hispanics

Wed, 2014-06-04 10:07

Rio Grande Foundation is an issues-based organization. In other words, we look at public policy issues facing New Mexico’s economy and educational systems from the perspective of limited government. We believe that, when properly understood, limited government and economic freedom benefit ALL of us regardless of race, color, or creed. But, the reality is that public policy reform often involves appealing to specific groups. Certainly, conservatives and free market advocates have struggled to attract Hispanics to our point of view.

At least in New Mexico, the issue of federal overreach on land management issues provides an excellent opportunity. In today’s Albuquerque Journal, A.M. Martinez makes several salient points in that regard. More history on disputes between the federal government and land grant holders here.

Ultimately, when it comes to federal lands, the only thing that everyone can agree on is that Washington does a poor job of managing the land. Given the political challenges faced by Western states in managing those lands for the benefit of Westerners as opposed to wealthy environmentalists back East, we need all the support we can get.

Obama’s carbon emissions reduction plan doubles down on energy boom

Tue, 2014-06-03 13:46

The biggest beneficiary of the ongoing energy boom has been President Obama. That’s not my statement, it’s Rick Newman’s from Yahoo Finance. Obama’s controversial plan to cut carbon emissions by 30% reminds me of the politician that gets a law passed when a trend is already happening.

This doesn’t make it good policy (it’s not); It also won’t reduce overall carbon emissions (much of the coal will continue to be exported to China and Europe); It will definitely result in some economic harms. According to the US Chamber of Commerce, the regulation will reduce GDP by $50 billion a year and prevent the creation of more than 220,000 jobs per year. The hit to household disposable income would be more than $550 billion a year. This would obviously be far worse if, for some reason, the natural gas boom slows or is halted.

The good news is that the full costs of this proposal won’t be felt by 2030. Anytime between now and then our political leaders and Congress could wake up and let the free market — which has already achieved a great deal of what Obama’s regulation imposes (the regulation is based on higher 2005 emissions, not 2012 emissions).

So, if Obama’s goals are achieved, it won’t be windmills, solar panels, or unicorn farts that lead us to the promised land. It’ll be good old fracking, the bane of the whacko “environmentalists” that gets us there. Oh, and for a clear illustration of how Obama has benefited politically from the oil and gas boom, the chart below should suffice.

Tax hike up for discussion at tonight’s Albuquerque City Council Meeting (updated)

Mon, 2014-06-02 12:42

In the wake of the various police shootings and issues over mental health problems, the Albuquerque City Council will be considering a tax hike of 1/8th of a percentage point on the gross receipts tax tonight. I have previously discussed the rationale or lack thereof for such a tax hike. Details follow:

To state the issue simply, there is no reason to raise taxes. There is no clear understanding of the issues at play in the first place and there is certainly no research or even widespread understanding that a tax hike will improve the situation. And New Mexico’s mental health spending is middle-of-the-pack among states, so it is hard to state on its face that more funding is required.

More importantly, when it comes to mental health issues in New Mexico, it must be noted that this spate of mental health problems coincides with some very tough economic times in our city/state. There’s no scientific evidence that I know of that the economy is the problem, but that argument is just as plausible as the “let’s raise taxes” argument. Raising taxes certainly seems unlikely to improve the local economy.

UPDATE: Due to protests, the meeting has been rescheduled for June 9, but according to media reports, no public comment will be allowed.

UPDATE 2: The tax hike issue will be discussed before the full council, presumably in an open meeting with public comment, in August. Stay tuned.

Federal Lands Discussion – Albuquerque

Sun, 2014-06-01 09:39
What Should be Done About Federal Lands in New Mexico?

It seems like not a week goes by without yet another controversy over federal lands in the American West. New Mexico, with 42 percent federal land ownership (as seen in the map below), has been at ground-zero.

To cite just a few very recent or even ongoing situations, there was the Cliven Bundy standoff in Nevada, a simmering standoff over ranchers' access to water in Otero County, and the Obama Administration's unilateral decision to place 500,000 acres of New Mexico land "off-limits" to a wide variety of human and economic uses.

You are invited to a discussion of these at once pertinent and controversial issues with Carl Graham, Director of the Coalition for Self Government in the West.

  • When:  6:00 to 7:30pm on Tuesday, June 17, 2014
  • Where:  Room 2401 at the UNM Law School which is located at 1117 Stanford Dr. NE, in Albuquerque
  • Cost:  There is no charge for this event
  • Please RSVP to:

The Rio Grande Foundation and others have been grown concerned about the federal government's management of lands throughout the West. A Rio Grande Foundation study found that by transferring management of Forest Service and Bureau of Land Management lands to the State, New Mexico could see as many as 68,000 new jobs and $8.4 billion in additional economic growth.

But the impact of poor federal land policies is not limited to economics: forest fires rage uncontrolled, ranchers, historic land grants, and recreational users have lost access to their lands, and funding provided by Washington in lieu of taxes paid on those lands (known as PILT) continues to leave local governments under-funded.

Legislation that would return or study the return of federal lands to the State of New Mexico has been introduced in the last two legislative sessions.

In addition to land management policies, Graham will be addressing what states like New Mexico can do to not be so reliant on Washington for their economic well-being. In fact, New Mexico is already learning the painful result of over reliance on Washington. But, States need to fully understand and analyze what would happen to their economies in the event of a significant loss of Washington funding. This concept, known as "Financial Readiness" will be introduced in the 2015 New Mexico legislative session and will be addressed in Graham's presentation.

Mother Jones: The Moderate Koch Brothers

Fri, 2014-05-30 16:05

I find the left’s (and Harry Reid’s) hyperventilating about the Koch brothers to be quite humorous. I briefly discussed our own Senators’ attempts to re-write the First Amendment, allegedly to “protect” Americans against the Koch Brothers.

So, I was fascinated to read an article entitled, The Koch brothers can save the Republican Party — by making it more moderate from Daniel Schulman of the far-left Mother Jones magazine and author of a recent book about the Koch’s.

For someone who represents such diametrical opponents of the Koch’s, Schulman is rather flattering and seems hopeful that the Brothers will positively impact the Republican Party. As a moderate on most social issues, I agree with Schulman and hope the Koch’s succeed in moving the Republican Party in a more socially-tolerant direction on drugs, gays, and immigration (this doesn’t mean simply agreeing with the left, but rather avoiding the shrill and often personal rhetoric some on the right engage in).

The most interesting aspect of the piece is that Schulman addresses the Koch Brothers as people as opposed to demons. Undoubtedly, many on the left and certainly some on the right have a right to disagree with the substance of one another’s political positions, but that is a far better and more interesting discussion than the old “You’re funded by XYZ” and inherently lack credibility approach that seems so common these days, especially on the left.

The VA scandal and ObamaCare: similarities and differences

Fri, 2014-05-30 09:49

If you haven’t been hiding under a rock over the last few weeks, you are probably aware of the ongoing scandal at the Veterans Administration. The basics of the scandal involve lengthy wait-times for veterans’ treatment in some cases resulting in death, manipulation of data on treatment and wait-times among top brass at the VA, and outright fraud perpetrated on veterans and taxpayers alike.

This is not the first time that veterans have been failed (remember the Walter Reed scandal?) by their government when it comes to their health care. Given the Obama Administration’s marquee legislative accomplishment “ObamaCare” and this scandal which has signs of “sticking” in ways that other scandals during this Administration have not, it is worth exploring the parallels and differences between ObamaCare and the VA.

The VA is a classic “single-payer” system. This more closely parallels the British or Canadian models than ObamaCare. Not surprisingly, many of the issues causing the VA scandal (rationing, wait-lists, and inadequate care) are often cited as problems with “single-payer” models. I’m not a huge Sarah Palin plan, but I think she was being generous when she made her “death-panels” comments. The reality is that the system’s own inertia will kill people (as has happened with the VA) not an organized panel.

It is worth noting that the VA serves America’s veterans. Few groups in this country are viewed more favorably by all sectors of society. One would expect that health care for a relatively small number of people who served their nation and are viewed sympathetically by large swaths of the population would be BETTER than any care provided to the population at large.

In terms of differences, there is no question that ObamaCare as designed is NOT single-payer. The law simply places additional regulations onto our “third-party-payment” system in which Americans’ health care is paid for by someone else whether that be insurance companies or (increasingly) other taxpayers through government programs like Medicaid. However, many believe that ObamaCare is intended to move America down the path to “single-payer.” None other than Senate Majority Leader Harry Reid Reid has said that he sees a national single-payer health system as the natural next step for health care in America. Reid said the nation had to “work its way past” insurance-based health care.

Reid and conservative Sen. Tom Coburn don’t agree on much, but they do agree that ObamaCare is a significant step towards “single-payer.”

So far, Republicans seem content to concentrate their ire on the individuals involved in the scandal (Obama, Shinseki, a few rogue bureaucrats), when the problem is the incentives (or lack-thereof) of the “single-payer” system itself. Of course, Republicans have played a tremendous role in creating the VA and I doubt they have the interest in or ability to really reform the system so it works, so I doubt we’ll see much discussion of the systematic problems inherent in the VA model.

Lyft, Taxis, and Regulatory Capture

Thu, 2014-05-29 09:48

What is the role of government regulation in our economy? Supporters of more regulation tend to cite the need to protect clean water and clean air while also protecting consumers against unsafe products. Well-crafted regulations CAN be a force for good in these areas, but all too often, regulations become “captured” by the very industries they are meant to regulate. Rather than being imposed for the public good, regulations become a tool for established players in a given industry to “protect their turf” (and profits) by keeping competition out.

The case of Lyft and its battle with New Mexico’s PRC and the incumbent taxi industry is a great example of this tendency towards “regulatory capture.” Check out this column in defense of the current regulatory system from Michael Cadigan an Albuquerque attorney and former city councilor. Cadigan’s argument can be summed up in one paragraph from his column, “Right or wrong, New Mexico taxis have to charge rates approved by the state. They cannot charge less; they cannot charge more. That is the law, just like it is in nearly every state in the country. They also pay required gross receipts taxes and payroll taxes to the city and state.”

So, no matter how bad the regulations are for consumers, taxi companies and new players should just shut up and deal with it. Of course, this view is based on the fallacious belief that regulations were simply created from on high without the “benefit” of industry input. In reality, as recently as the 2013 legislative session, I sat through committee hearings in Santa Fe in which the only opposition to partial deregulation came from the taxi industry led by their lobbyist Raymond Sanchez. Despite broad bi-partisan support for deregulation, the bill passed was weak tea indeed and still left New Mexico’s transportation industry heavily and unnecessarily regulated.

This heavy regulation doesn’t benefit consumers. It benefits the incumbents in the industry. Airline deregulation that took place in the 1970s was just one famous example and what is happening with Lyft reminds me of a great scene from The Aviator.

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