Errors of Enchantment Blog Postings

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Why is New Mexico not realizing its potential?
Updated: 2 hours 35 min ago

Liberal Estes lives in economics fantasyland

Mon, 2014-07-14 14:19

I’ve previously called Nick Estes, formerly an analyst with the liberal group Voices for Children, a “crackpot.” Having debated him on economic policy issues, I can assure you that Nick is a very nice man, but he is genuinely clueless when it comes to economics.

Take his recent column in the Albuquerque Journal. For starters, there is the loose use of the term “we.” Who is this “we?” The federal government, state governments, corporations, individuals? He also makes it sound like any healthy, working-age person could simply be put to work building/installing solar panels and wind turbines. Unfortunately, these are fairly technical fields and not every “Joe” on the street is cut out for such work.

Yes, the federal government financed a lot of nice projects back in the 1930s, but as Estes himself seems to admit (and Amity Shlaes documents in her excellent “The Forgotten Man”, Roosevelt’s New Deal didn’t bring the US out of the Great Depression. The Depression ultimately ended after state management of the US economy ended in the wake of World War II.

Of course, throughout his piece, Estes claims that all of his economic policies can be enacted essentially “for free.” We all know that “there is no such thing as a free lunch.” The resources government taxes and spends must come from somewhere. These could be used elsewhere in the absence of government taking those resources.

Catholic Church leading charge on pre-k expansion, won’t push school choice which could help get students into Catholic Schools?

Mon, 2014-07-14 11:50

A personal note: I’m a Catholic. The Church’s politics make me crazy for a number of reasons. I’m not referring in this post even to economics, but to the Archdiocese of New Mexico’s position in support of a massive new pre-K entitlement. Advocates point to some very old, highly resource-intensive pre-k “experiments” from the 1960s, but conveniently ignore existing, large-scale, state programs that have been operating for decades in Oklahoma and Georgia.

So, the church is advocating for policies that would, we believe, waste billions of dollars in the Permanent Fund on a pre-k program. But that’s not what really drives me nuts about the Church’s policy stances. It is that the Church is not willing to put a fraction of the time and resources into promoting school choice (specifically, tax credits) which are now in place in 14 states (see a detailed analysis here) and were last seriously considered in New Mexico in 2012 when liberal Democrats introduced bills to expand school choice.

A further indictment of the Church’s position is that the data on student performance in Catholic Schools is actually much better than the costly new pre-K program. A University of Chicago study found that urban African Americans attending Catholic schools are 26 percentage points more likely to graduate from high school and twice as likely to graduate from college as comparable students in public schools. Considering that such programs could actually SAVE tax dollars, it is nothing less than mind-blowing to me that the Church hasn’t endorsed tax credits for school choice wholeheartedly.

Perhaps it is true what they are saying about Allen Sanchez?

New report: New Mexico has worst public pension situation in nation

Fri, 2014-07-11 11:17

The Competitive Enterprise Institute is a free market group based in Washington with which we sometimes work. They, like Rio Grande Foundation, are concerned about the fiscal impact of government employee pensions, specifically the fact that they are under-funded and poorly-designed in the first place. As time passes absent systemic reforms, these pension systems are destined to consume ever-greater public resources.

The RGF has known for years that New Mexico’s pension system was among the most troubled in the nation, but efforts to compare pension problems from state-to-state are challenging. The CEI report (available here) offers several different evaluations based on different methodologies each using their own calculation techniques. All of these are useful, but as Table 8 of the report illustrates, New Mexico’s pension system, when compared with those of other states, fares the worst when the various studies are factored together.

This poor result is particularly amazing considering the constant attention (at both the state and national levels) given to pension reforms in Illinois and other states facing pension issues.

Other states are dealing with the pension reform issue. Oklahoma recently shifted all new hires to a 401K-style system.

2013 Payroll of New Mexico’s Institutes of Higher Education

Wed, 2014-07-09 10:31

The Rio Grande Foundation has requested 2013 payroll information for New Mexico’s 16 institutes of higher education (universities, junior colleges, and community colleges). The Foundation has posted this information online in order to make information that is technically “public” (available upon request) more readily-available than before.

The Foundation was able to access records for 15 of New Mexico’s 16 institutes with only New Mexico Institute of Mining and Technology (New Mexico Tech) failing to comply with the Foundation’s requests.

One institute, New Mexico Tech, failed to comply. A representative of New Mexico Tech stated that employee payroll information was available only in printed format at significant cost.

On the flip side, Rio Grande Foundation President Paul Gessing noted with appreciation that “University of New Mexico and Central New Mexico Community College both post payroll on a publicly-accessible website. This should be the model pursed by all schools”

Gessing continued, saying “New Mexico’s taxpayers support each of these institutes of higher learning. In this day and age with the modern Internet now 20 years old, important public information should be proactively published online for the public to access. While the Rio Grande Foundation is happy to request public records on the public’s behalf, it is unacceptable to not have such basic information readily-available or to not respond to repeated and varied requests.”

Click on the name of each school to access the 2013 payroll of that institute.

University of New Mexico

New Mexico State University (also includes Doña Ana Community College)

Eastern New Mexico University

New Mexico Highlands

Western New Mexico University

New Mexico Military Institute

Northern New Mexico College

San Juan College

Central New Mexico Community College

Clovis Community College

New Mexico Junior College 

Santa Fe Community College

New Mexico Institute of Mining and Technology: “cannot comply”

Mesalands Community College

Luna Community College





Does Hillary Clinton agree with RGF on income inequality?

Wed, 2014-07-09 10:09

Hillary Clinton recently did an interview with the German magazine Der Spiegel in which the topic of “income inequality” was raised (the media focus has been on her “poverty” upon leaving the White House). After the usual platitudes about inequality being a “threat to democracy,” Clinton gave a more specific answer in which she largely agreed with conservatives’ views on inequality and the economy:

SPIEGEL: The average annual income of an American household is $43,810 (€32,191.77). You earn up to $200,000 an hour for a speech. Can you understand if people are bothered by that?

Clinton: Well, certainly, I can understand that, but that’s never been the crux of the concern in our country, because we’ve always had people who did better than other people. That’s just accepted. The problem is that people on the bottom and people in the middle class no longer feel like they have the opportunity to do better. The question is, how do we get back to having an economy that works for everybody and that once again gives people the optimism that they too will be successful.

This is exactly the point I made in my debate last year with liberal Nick Estes. Inequality is not the issue so much as the sputtering economy which has made living standards worse for working class Americans. Of course there are things that can be done to reduce inequality while also improving the economy including: school choice/education reform, end the Federal Reserve’s printing money, and work to shore up the American family.

Austin, TX looking to New Mexico for economic advice?

Tue, 2014-07-08 12:50

Check out this article from the Austin American-Statesman. I was quoted in the story. It looks like the movers-and-shakers in Austin are looking to get the city into the space industry game. Of course, no state has spent as much of taxpayers’ meager resources on such projects as New Mexico.

Notably, Austin is, while similar in some ways to Albuquerque, the polar opposite of Albuquerque economically. Forbes even recently named Austin America’s number one “boomtown” while Albuquerque was recently found to be in a “double-dip” recession. Texas as a whole is also doing well while New Mexico is not. Notably, Austin, a notably liberal city is located in a right to work, zero-income-tax state.

So, why would business leaders in Austin want to emulate New Mexico’s crappy economy? Beats me. Space is cool. It may be the next “big thing.” My quote from the article clearly states what Austin’s leaders might wish to do and what they might to avoid:

“There are opportunities in commercial space, but taxpayers shouldn’t be footing the bill for a speculative investment in a competitive market.”

“New Mexico went all-in on space tourism,” Gessing said. “It was like building an airport before the Wright Brothers.”

Does voter registration data show New Mexico trending red?

Tue, 2014-07-08 09:27

The headline in the Albuquerque Journal story is “Rejecting Party Labels” and true enough, as is clearly visible in the following chart, New Mexico voters are rejecting party labels in growing numbers:

What was really interesting to me is that the gap between Republican and Democrat registration in supposedly liberal 18-24 year olds is 11 percent according to the poll. That compares with an astonishing 18 point advantage for Democrats among voters 65 and up. All other age demographics had a party registration gap of 15 points.

I am not a pollster and Rio Grande Foundation is not partisan, but this data caught my eye when I saw it because to say that this deviates from national trends would be an incredible understatement. Check out the chart below from the Pew Center which does polling on politics at the national level (it is from 2012, but still relevant):

The Pew chart clearly shows that Americans generally identify more Republican as they age with the so-called “Silent Generation” being even and each subsequent group identifying more strongly with Democrats. The “Millennial” generation gap nationally is an astonishing 27 points in favor of Democrats.

Is there something unusual about Sanderoff’s polling here in New Mexico that drove these results? I don’t know, but from what I can tell, New Mexico’s oldest voters are far more inclined to be Democrats than their peers in other states and young people in New Mexico are somewhat more Republican than older voters or their peers in other states. Perhaps the winds of political change are coming to the Land of Enchantment?

Unfair subsidies to businesses won’t help New Mexico’s economy recover

Mon, 2014-07-07 11:15

There is no question that New Mexico faces significant economic challenges. Our overreliance on Washington’s largesse combined with business-unfriendly tax and regulatory structures have finally caught up with us. This has led to New Mexico bleeding jobs and people to other states, particularly our economically freer neighbors.

This has led to desperation among some quarters. Democrat Sens. Tim Keller and Jacob Candelaria seem to have even proposed a special legislative session for the sole purpose of offering subsidies and incentives to the Tesla car company. The hope is to attract a proposed battery factory to the state despite no concrete indicators from Tesla as to where they wish to locate said factory or what their criterion are.

Unfortunately, these Democrat legislators are not the only ones willing to engage in bad economic policies for a short-term political benefit in the form of “jobs.” The Doña Ana County Commission recently voted 5-0 to grant an industrial revenue bond (IRB) to a Turkish wire company to encourage the company to come to Santa Teresa. While this financing mechanism is somewhat complicated as a means of giving special advantages to recipients, the basic effect of an IRB is that it exempts the recipient, for up to 30 years, from property taxes on land, buildings, the useful life of equipment purchased with bond proceeds and an exemption from applicable gross receipts taxes on the purchase of project equipment.

While we at the Rio Grande Foundation prefer fair, free, and open economic policies, the kicker is that the subsidized Turkish firm is planning to open their door across the street from the International Wire Group, an existing player in the same market. It goes without saying that an unequal playing field inevitably favors one company over another and could allow the new entrant to undercut its cross-street rival on price or use its advantage to hire workers away from the existing company.

So, the very justification for issuing these bonds to the Turkish wire company — job creation — will likely backfire as the new company uses its government-favored position to squeeze its competition. Unfortunately, it does not seem to have occurred to the Commission that their policies may backfire in this way.

Whatever the reason they have for issuing this bond, it is nevertheless illegal. According to section 4-59-15 of the New Mexico State Board of Finance review provision: “The bonds in connection with such project shall not be issued until the State Board of Finance has determined that the proposed project will not directly or substantially compete with an existing business or enterprise located within the boundaries of the county or within five miles of the proposed project.”

Approval of this subsidy package, unlike any potential deal for Tesla, would appear to be in direct violation of the state’s own laws/regulations. On those grounds alone, the Board should reject the proposed subsidies out of hand.

While we certainly understand the desire on the part of policymakers to act quickly to attract businesses to the state, policymakers need to first and foremost respect those businesses that are already here in our communities providing jobs and tax revenue for our communities and the state. The worst thing that can be done is to offer generous subsidies — at taxpayer expense — to attract competition for existing New Mexico businesses.

The term “pro-business” is often a catch-all used to describe government policies that may, unfortunately, be abused for the benefit of some businesses at the expense of other businesses and taxpayers at large. New Mexico should instead strive for free-market policies that provide reasonable taxes and regulations across the board. When that challenge is undertaken in Santa Fe, New Mexico will finally rise from the bottom of so many bad lists.

Monnheimer is a policy analyst with New Mexico’s Rio Grande Foundation, 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.

Audit results show why Albuquerque should fully embrace private golf course management

Wed, 2014-07-02 14:05

Management of Albuquerque’s public golf courses was recently slammed in an auditors report as discussed in the Albuquerque Journal.

Based on my interpretation of the issues discussed in the report, it would appear that the problem stems from 2 things: 1) the fact that most golf course operations are privately-managed while the course itself is managed by the City; 2) poor oversight of contracts on the part of the City.

It would seem that the best solution is complete privatization of golf course management. Rather than the split system, outsource all aspects of golf course management, require a specific amount of money be returned to the City and negotiate an appropriate rate structure, and let the course management team innovate within those bounds.

This structure would mitigate against losses to the taxpayer; it would be simple to monitor, and it would likely improve conditions, especially at Ladera which has struggled in the past. Cincinnati is just one major city to have seen positive results from such a move. Rio Grande Foundation has previously covered this issue.

Conservatives should support private management because relying on the private sector is results in a better product at a lower cost.
Liberals should support it because limited taxpayer dollars should not be spent to subsidize golf courses.

New Mexico misses Goal on Financial Reporting (again and again)

Wed, 2014-07-02 11:24

According to the group Truth in Accounting, New Mexico is having serious problems getting its fiscal reports done in a timely manner. According to a new report, the State has missed the 180 day goal to release fiscal reports after year-end since 2009; with a worse record each year.
· 2009- report published 262 days after fiscal year end
· 2010- report published 258 days after fiscal year end
· 2011- report published 356 days after fiscal year end
· 2012- report published 426 days after fiscal year end

Why should citizens of New Mexico care?
· The budget cannot be made efficient without timely financial results from the prior year.
· Unfunded pensions promises are growing (from $4.2 billion in 2009 to $7.28 billion in 2012)
· Unfunded retirement health promises (from 2.21 billion in 2009 to $2.51 billion in 2012)
· Citizens cannot hold their elected officials accountable without truthful, timely information.
· Click here to view the full financial state of New Mexico

New Mexico might look to its neighbor, Utah, for advice. Utah published its 2013 financial report 115 days after the fiscal year end – making Utah the second fastest state in the country after Michigan, who released its 2013 report 82 days after fiscal year-end.
Check out your state’s timeliness by selecting “Edit Chart Criteria” below this chart, scroll down the next page to select your state, select Available Years, and Generate Chart MI and UT Reporting Timeliness: 2009-2013.

Truth in Accounting commends Michigan and Utah for enabling their citizens to make informed decisions with timely available reports. Utah is also one of our eight sunshine states, meaning they have enough assets to pay their bills.

NM Missing out on post-recession gains

Tue, 2014-07-01 14:54

The following letter appeared in the Albuquerque Journal Business Outlook section on Monday, June 30.

Another month and another sorry set of job “growth” data for New Mexico right there on page 2. In fact, this is the most important information that appears in the Business Journal. For those of you who missed it, New Mexico is the only of nine Western states that lost jobs year-over year from April 2013 to April 2014.

Nevada led the region with 3.7 percent job growth while Texas grew by 3.2 percent. These states’ economies are quite different. Nevada boomed during the 2000s and was hammered by the recession while Texas’ economy held relatively firm during the recession and has absolutely boomed since then. Both, however, are right to work states (no forced-unionism) and lack personal income taxes at the state level.

In a recent analysis of New Mexico’s performance on a variety of “business friendly” or economic freedom rankings, New Mexico’s average ranking was 33rd while Texas’ average ranking was six and Nevada’s 18. Utah, Colorado, Arizona, and Oklahoma also scored consistently and substantially better than did New Mexico.

New Mexico has a unique and wonderful history, but it also has a history of anti-freedom economic policies, poverty, and dependency. Until that mentality changes in Santa Fe and the Legislature and PRC adopt policies that unleash rather than constrict markets, New Mexico’s economy will underperform, poverty will be high, and our most-educated young people will leave the state.

Paul J. Gessing
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196

RGF endorses ride-share companies Uber, Lyft; PRC says “no”

Sun, 2014-06-29 19:48

Check out the full story along with my comments on the proceedings in Santa Fe from Capitol Report New Mexico. This is yet another unfortunate example of policymakers in New Mexico choosing to protect special interests and existing businesses at the expense of innovators and consumers alike.

It is also hard to argue with Rep. Vickie Perea’s arguments in her opinion piece. I’d love to see what Gov. Martinez and gubernatorial candidate (and current Attorney General) Gary King have to say about this issue. Statements by either candidate would give voters a clearer understanding of candidates’ inclinations on the impact of government regulations on New Mexico’s economy. I’d also love to see a Democrat legislator (or more) speak out in favor of free markets and innovation as they have spoken out in favor of a more far-fetched effort to attract Tesla to New Mexico.

RGF study on New Mexico’s shrinking workforce makes KOB Channel 4

Fri, 2014-06-27 09:58

The Rio Grande Foundation report on New Mexico’s shrinking workforce attracted the attention of KOB TV Channel 4 News. The story appeared last night at 6pm last night.

New Mexico’s Incredible Shrinking Workforce

Thu, 2014-06-26 08:50

(Albuquerque) What happened to New Mexico’s workforce during and in the wake of the “Great Recession?” The tenor of that question might change dramatically with one look at the chart below. As clearly seen below, New Mexico’s workforce participation rate which had been on a general upward trajectory since the mid-1970s, dropped precipitously during the recent recession.

In a new policy brief (available at the following link), “The Troubling Case of New Mexico’s Disappearing Workforce,” Rio Grande Foundation president Paul Gessing analyzes New Mexico’s workforce participation rate and how it compares to other states, explains why workforce participation is so important, and briefly outlines some ideas for New Mexico policymakers to consider to bring more of our state’s workers back into the workforce.

For Sen. Heinrich, the right amount of federal land holdings is “more”

Wed, 2014-06-25 13:27

Last week, I traveled around New Mexico talking to members of the public and county commissioners on the issue of transferring some federal lands back to state control. But there are some, especially in Washington, who oppose ANY effort to reduce the ever-expanding federal estate. Count New Mexico Sen. Martin Heinrich among them.

Heinrich has co-sponsored a resolution that would add procedural restrictions to any legislative effort to sell off federal lands to reduce the deficit. Ironically, it was Heinrich and his fellow Democrats in the Senate who voted just last year to REMOVE procedural obstacles to executive branch and judicial nominees.

The Rio Grande Foundation’s efforts are not designed specifically to address the federal deficit, but you can bet that ANY effort to reduce the federal estate will be subject to such procedural restrictions. One wonders why Heinrich would oppose fellow Democrat Ray Powell’s effort to restore some BLM lands to state control in an effort to fund a new pre-k program.

It would seem that Heinrich is simply pandering with this effort, but clearly he sees any effort to reduce federal land holdings as a very bad thing politically while expanding federal control as with the recent Organ Mountains Wilderness designation to be a good thing.

HT: Myron Ebell

Alan Webber: Another Democrat’s economic attacks fall flat

Tue, 2014-06-24 16:00

Another day, another attack by a liberal Democrat levied against Gov. Martinez on the economy. This time, liberal former Gov. candidate Alan Webber attacks Gov. Martinez in the Albuquerque Journal on what we can all agree on is New Mexico’s poor overall economic performance. As I’ve written before, this remains the Democrats’ best line of attack against Martinez in the 2014 election, but there are several issues.

1) The Dems offer no sound solutions. Gary King wants a higher minimum wage and laws mandating “equal pay” for women. Webber (as indicated in his article) wants “green jobs” despite repeated reports indicating that projections of “green jobs” employing massive numbers of people being overblown. Both are typical, central-planning ideas that put government in charge of picking and choosing the industries that are favored and those that should fail.

2) Government doesn’t create jobs. At the outset of his article, Webber notes the “unbelievable record Gov. Susana Martinez has of creating jobs.” Unfortunately for Webber, Gary Johnson had it best when he said, “I didn’t create a single job as Governor.” Government can set up reasonable tax rates, rules, and regulations that allow average New Mexicans to build businesses and create jobs, but by removing productive resources from the private sector economy, government mostly kills both wealth and jobs and sometimes diverts those resources to other industries whether those are actually desired or demanded by the marketplace.

3) Gov. Martinez is merely the Governor, not the queen or dictator. In other words, Martinez has controlled one branch of New Mexico’s government, the executive, for just less than four years. The Courts and Legislature, not to mention the PRC and most local bodies, have been controlled by big-government liberals for decades. New Mexico did have a good decade during the 2000s in part due to some serious income tax cuts, but it’s not like New Mexico was at the top of all the good economic lists before Martinez got elected.

Democrats, whether that means Gary King or anyone else, have a long way to go to convince New Mexicans that they have viable solutions for New Mexico’s economy.

Largest “company” by revenue by state

Tue, 2014-06-24 10:23

I’m not sure what it says about New Mexico’s economy that our largest “business” is a non-profit health care provider (Presbyterian), but it is not good. Actually, it is an indicator that New Mexico lacks a developed private sector.

Milton Friedman Legacy Celebration – Albuquerque

Tue, 2014-06-24 09:06

Celebrate Milton Friedman’s Legacy!

Click here for event registration form!

You are invited to join the Rio Grande Foundation for an evening celebrating what would have been Milton Friedman’s 102nd birthday with Timothy Sandefur, Principal Attorney at Pacific Legal Foundation. Along with Friedman’s legacy, Sandefur will be discussing is new book, “The Conscience of the Constitution.”

Sandefur’s book questions whether liberty or democracy is the primary constitutional value. At a time when Americans are increasingly facing violations of their civil liberties, Timothy Sandefur’s insightful new book explains why the Declaration of Independence, with its doctrines on the primacy of liberty, the natural rights of man, and the limits on legitimate government, should serve as the guidepost for understanding the Constitution.

  • When:  6:00pm to 7:30pm on Thursday, July 31, 2014.
  • Where:  Room 2401 at UNM Law School which is located at 1117 Stanford Dr. NE, Albuquerque, NM  87106.
  • Cost:  $10 which includes light appetizers and non-alcoholic drinks as well as birthday cake to celebrate Dr. Friedman’s birthday.

Timothy Sandefur is a Principal Attorney at the Pacific Legal Foundation. As the lead attorney in the Foundation’s Economic Liberty Project, he works to protect businesses against abusive government regulation, and has won important victories for free enterprise in California, Oregon, Missouri, and other states.

Publications / Achievements

He is the author of three books, Cornerstone of Liberty: Property Rights in 21st Century America (2006), The Right to Earn A Living: Economic Freedom And The Law (2010), and The Conscience of The Constitution: The Declaration of Independence And The Right to Liberty (2013), as well as some 45 scholarly articles on subjects ranging from eminent domain and economic liberty to copyright, evolution and creationism, slavery and the Civil War, and legal issues in Shakespeare and ancient Greek drama. His articles have appeared in National Review, The Claremont Review of Books, The San Francisco Chronicle, The Washington Times, and Regulation among other places.

He is an adjunct scholar with the Cato Institute and a frequent guest on radio and television programs, including John Stossel, the Armstrong and Getty Show, the Jim Lehrer News Hour and NPR's This American Life.

Click here for event registration form!

Slow growth v. Fast growth cities

Mon, 2014-06-23 15:27

Interesting story today from Daily Ticker via Yahoo on the fastest and slowest-growing cities in America. I’ve taken the liberty of posting the top and bottom 10 below:

Top 10 Fastest-growing

1. Midland, Texas 5.8%

2. Greeley, Colorado 4.8%

3. St. George, Utah 4.6%

4. Provo-Orem, Utah 4.6%

5. Naples-Marco Island, Florida 4.5%

6. Austin-Round Rock-San Marcos, Texas 4.4%

7. Raleigh-Cary, North Carolina 4.3%

8. Laredo, Texas 4.3%

9. Palm Coast, Florida 4.3%

10. Fayetteville-Springdale-Rogers, Ark.-Mo. 4.2%

Top 10 Slowest-Growing

1. Binghampton, New York 1.0%

2. Utica-Rome, New York 1.0%

3. Pine Bluff, Arkansas 1.3%

4. Johnstown, Pennsylvania 1.3%

5. Atlantic City-Hammonton, New Jersey 1.4%

6. Danville, Virginia 1.4%

7. Beaumont-Port Arthur, Texas 1.4%

8. Kingston, New York 1.4%

9. Elmira, New York 1.5%

10. Buffalo-Niagara Falls, New York 1.5%

Notably, nine of the top 10 are cities in right to work states. Only Colorado is not (they have some other nifty pro-taxpayer protections). Seven of the bottom 10 cities are in forced-unionism states. Also, half of the top-10 cities are in states that both have no personal income tax and are right to work. Beaumont-Port Arthur is the only city in the bottom 10 located in such a state.

Correlation may not be causation, but eventually enough different data points should lead policymakers to wonder why states (and cities in states) that have adopted right to work and zero income tax consistently outperform their high-tax, forced-unionism peers.