Should teachers and administrators be armed in schools and classrooms? I don’t know. The ideas seems to have merit, but it could certainly have drawbacks as well. I’d like to see local schools experiment with various policies. My hope is that such experimentation would lead to “best practices” that would bring about policies that benefit students and school employees alike, keeping them safe from mass-shootings while also reducing the discomfort of having gun-toting officers patrolling the schools.

Unfortunately, the unique power of the government school monopoly and the unions has eliminated the possibility for such innovation and experimentation. So, if you think the NRA is on to something with its proposals, you are out of luck. If you are a teacher or administrator who’d like to be armed, sorry, the union speaks for you and all teachers/administrators.

The gun issue is only the latest education controversy to have one-size-fits-all “solutions” dictated by unions and government bureaucrats rather than parent and student preference.

See the KOB-TV story on the gun issue below:

Albuquerque Business First ran a column poo-pooing the notion that the boom in natural gas production could lead to more jobs and economic growth nationwide.

This may indeed be the case for now and it is certainly true that manufacturing doesn’t employ as many people as it did in the past (largely due to technological innovation), but it doesn’t follow that the natural gas boom is lacking in impact or that it could not have a major impact on the economies of both New Mexico and America as a whole.

For starters, Japan is desperate to buy our cheap, clean natural gas (especially from New Mexico). Unfortunately, regulatory issues in Washington (and indecision on the part of the Obama Administration) have delayed investments needed to truly unleash the natural gas boom.

The point is that sometimes economic changes take a long time to flower especially when government is involved. Maybe the boom won’t be in domestic manufacturing, but will come about in the form of more drilling and exports. If so, that is the free market at work. Oh, and this boom will be especially beneficial to New Mexicans in terms of both jobs created and economic growth.

You can read a bit about the Tombsstone case from the Cato Institute or Goldwater Institute (the state-based free market think tank in Arizona which brought the case). The case involves the US Forest Service’s refusal to allow the town of Tombstone to use modern equipment to repair a water line that serves the town.

The full brief from ourselves and the other signatories can be found here.

Check out the following video from Fox and Friends which explains the issues in the case:

The following chart shows where each dollar of federal taxes collected is spent:

It may be surprising to note that Social Security and Medicare are not at the top of the chart, but those programs are primarily fast-growing “unfunded liabilities” (totaling $87 trillion) at this point. In other words, America has been running $1 trillion-plus annual deficits and the problems of Medicare and Social Security haven’t really impacted the budget yet.

This is why we need to reduce spending at all levels in Washington and do so now. Of course, the Obama Administration would rather cut royalties payments to states like New Mexico rather than actually reducing federal spending.

Stephanie Maez of the left-liberal Center for Civic Policy makes several reasonable points about the process that hatched the big tax compromise at the end of the 2013 legislative session. I don’t think anyone would say that the process was ideal.

But there’s no doubt that the liberals would have been the first to scream and blame Gov. Martinez if Intel had decided to close up shop in Rio Rancho and move over to more tax-friendly Arizona where the company already has several large factories.

True, the Legislature should have just gone along with the tax cuts (the combined impact of the corporate income tax cuts and optional single sales factor reporting will be $100 million in FY 2017). After all, those tax cuts combined are less than half the size of the annual spending increase contained in this year’s budget.

So, the questions remains: what would the “progressives” do? Further raise the job-killing minimum wage? Throw even more money at the film industry? Waste money on pre-pre-pre K when our existing government schools are failing and the data on pre-k is indeterminate at best? Allow one or New Mexico’s largest and best-paying private sector employers leave?

The legislative process is ugly and becomes increasingly difficult when it is split on partisan lines and in terms of outlook. The hard left will criticize the process with some justification, but the truth is that their ideas have failed New Mexico for decades.

Folks in one area of Albuquerque are currently embroiled in a heated debate over whether kids one one side or another of an arbitrary line should be able to go to a particular school. The Albuquerque Journal has editorialized in favor of onerous annual proof of residency checks for Albuquerque Public Schools to make sure that “the right kids” are going to “the right schools.”

What a joke! Why should where you live have anything to do with where you go to school and how good of an education you can get?

The principled left (as opposed to the self-interested labor unions which support the status quo) has been complaining about “apartheid” in our nation’s public schools. What do you expect when the home or apartment you are able to afford also determines the quality of your child’s education?

Unfortunately, the left appears not to have any good ideas on how to improve our schools. Universal vouchers available to all kids would do the trick, but are despised by the unions. Other forms of school choice like tax credits and charter schools can help overcome the segregation (geographical, racial, and class) that is rampant in our education systems, but again, the unions often stand in the way.

It is one thing to have a disagreement over priorities. It is another thing to think one’s opinions are that of a crackpot or are downright crazy. While RGF and New Mexico Voices for Children certainly don’t agree on much (even they agree that film subsidies are a bad idea though) Nick Estes’ column in today’s Albuquerque Journal is downright nutty.

His premises are twofold: 1) budget deficits and debt don’t matter; 2) trade deficits do matter and are bad. Naturally, he is exactly wrong on both accounts.

See the chart below as a starting point:

Yes, World War II saw an incredible run-up in the national debt. Thankfully, this was a TEMPORARY situation as the debt was “invested” in defeating Imperial Japan and Nazi Germany. That’s a good investment if there ever was one. Notice what happened to the debt after the War. It went down quickly. Notably, federal spending declined dramatically after WW II which was decried at the time by Keynesians who thought it would plunge our economy into another Great Depression. It obviously did nothing of the sort. Instead, the massive resource shift from war fighting to the private sector economy drove the economic boom of the following decades.

Today’s debt is a result of decades of overspending and the design of our so-called “Entitlement” programs, specifically Medicare and Social Security. As the chart above illustrates, the debt problem will get a whole lot worse, not better, with no end in sight.

Oh, and just because “we owe it to ourselves” doesn’t make indebtedness any less problematic. The problem with debt is not in the debt itself, but the burden it places on those who must pay it back and the potential for default. Remember the housing bubble? “Owing it to ourselves” didn’t make it any less painful. Ever make a bad loan to a friend or relative? Still painful.

Estes’ 2nd point is that trade deficits DO matter. Wrong again. China and other nations with which we have trade deficits are giving us stuff and accepting dollars. When it comes down to it, I’d rather have stuff than dollar bills because you can do a lot more with stuff than those slips of money which are being printed (not bills, but just zeroes these days) by the Federal Reserve. Oh, and Estes is wrong again in stating that China is not the world’s worst currency manipulator. It is actually the USA and Ben Bernake.

UPDATE: If Mr. Estes or anyone from Voices for Children reads this column, I’d love to set up a public debate on these issues, especially the all-important government debt/deficit issue. Any reasonable time, any reasonable place. It would be great to have a public discussion on these issues.

The latest information piling on to what we already know (Albuquerque’s economy is doing poorly) comes from the center-left Brookings Institute which finds the following:

Overall recovery in the Mountain region’s largest metropolitan areas continued apace in the fourth quarter of 2012. On the Monitor’s measure of overall recovery—which takes into account changes in employment, unemployment, output, and house prices together from each metropolitan area’s respective troughs through the fourth quarter of 2012—nine Mountain-region metropolitan areas
saw no change in standing relative to peers nationally over the quarter.

A strong end to 2012 proved sufficient to advance Las Vegas ahead two full quintiles over the quarter into the second-strongest group
of performers since recession’s end. Of the metro areas with no change, Boise, Phoenix, Provo, and Salt Lake City remained among the most strongly recovering metropolitan areas in the country. Denver, Las Vegas, and Ogden followed in the second-strongest performance quintile on this composite measure. Tucson landed in the third quintile; Colorado Springs in the fourth; and Albuquerque, with the region’s slowest recovery, languished in the fifth.

Another choice quote:

Six Mountain metro areas—Boise, Denver, Ogden, Phoenix, Provo, and Salt Lake City—closed 2012 with four consecutive quarters of job growth. By contrast, employment levels in Albuquerque fell for the fourth straight quarter, by 0.2 percent in the last three months of 2012, to a new low.

While we support the recent tax compromise, the tax cuts don’t fully take effect for five years and (as we noted) the package contains several economically-harmful measures as well. The Legislature and its continued unwillingness to make New Mexico competitive is holding our state (and its largest city) back.

The Rio Grande Foundation recently hosted John Blundell for a series of talks on Margaret Thatcher and Ladies for Liberty. Video of the Thatcher presentation is below:

3-26-13 Blundell on Thatcher from Paul Gessing on Vimeo.

The Ladies for Liberty presentation can be found here:

Blundell Ladies for Liberty from Paul Gessing on Vimeo.

It is amusing and frustrating to read some of the opinion writers’ views on economics. Today we are treated to an author who states “tax cuts won’t bring more jobs.” The author argues against so-called “supply side” tax cuts on business and in favor of raising the minimum wage. He couldn’t be more wrong, but perhaps not for the reasons you might think.

Jobs are not the issue in our economy. Wealth creation is the issue. I could create millions of jobs in America overnight by banning the use of construction and farm implements. Doing all such work with shovels by hand would sure create jobs, but what would it do to our living standards? They’d go down. So, job-creation in and of itself is not a good thing.

The author mentions Henry Ford to justify the minimum wage. Ford paid his workers more because he wanted them to continue working for him and not to leave for his competitors. Ironically, the labor-saving assembly line which was invented by Ford was a huge job-killer. After all, the time and effort for one craftsman to make a car from hand would be immeasurable. The assembly line created tremendous wealth by reducing the amount of time it took for cars to be built, thus creating plenty of jobs, but it is also a labor-saving-practice which cost many other people their jobs. Imagine the poor horse-and-buggy makers!

Lastly, tax cuts, while not a panacea, should reduce the “friction” involved in every day economic activity. When they are applied at high rates and tax things like income, taxes provide a disincentive to do more of a particular activity. In a federalist system like ours, New Mexico’s high corporate tax rate will chase such businesses to other states. While we’re not celebrating the relatively minor tax plan passed at the end of the legislative session, it would be folly to say that tax cuts are not good for everyone.