This Week on the Rio Grande Foundation Bi-Weekly "New Mexico Freedom Hour" Radio Show on 770 KKOB AM Radio!

This Saturday From Noon to 1:00PM!

The "New Mexico Freedom Hour" is presented by the Rio Grande Foundation. It next airs on Saturday, December 20, 2014 from noon to 1:00pm on 770 KKOB AM.

Steve McKee Dax Contreras

This week, Paul Gessing will be interviewing Steve McKee and Dax Contreras. McKee, an Albuquerque-based businessman, is president of McKee Wallwork & Company and author of Power Branding and When Growth Stalls. He's also a frequent contributor to Businessweek. Contreras is the new Executive Director of the newly-formed "Jobs for All New Mexico."

They'll discuss the New Mexico economy and what we can do to improve it. Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333. The show is also available streamed online at www.770kkob.com.

Thanks for your interest and support.

Misconceptions Abound on “Right to Work”

In the wake of the 2014 elections, New Mexico has a unique opportunity to enacted long-overdue economic reforms. The goal of those reforms must be to wean our struggling economy off of an increasingly-unreliable Washington by developing a strong private sector.

At the top of the agenda is a “right to work” law which, far from being “anti-union” would simply prohibit so-called “closed shop” agreements that require workers to pay union dues as a pre-condition of employment. Forcing workers to pay dues for any organization is simply wrong. Private sector unions can and should exist and they would be better advocates for workers if they actually have to prove they are worthy of membership.

It is worth noting that 20 of the 24 current “right to work” states have higher private sector unionization rates than New Mexico. In other words, due to the historical weakness of New Mexico’s private sector, these unions have had relatively few members. If New Mexico can strengthen its private sector with “right to work” and some other pro-growth policy reforms, private sector unions could see real growth.

Union growth took place in “right to work” states between 2011 and 2012 when those states saw an overall increase of 39,000 union members while non-“right to work” states lost 390,000 members, a 3.4 percent decrease.

Energy Expert Robert Bryce Discusses "Smaller, Faster, Lighter, Denser, Cheaper" in Albuquerque

Robert Bryce is one of America's foremost authors and experts on energy. Specifically, he is an optimist about America's economic future fueled in part by affordable, reliable energy. Bryce is also a skeptic regarding the "politically-correct" sources of energy beloved by environmentalists.

He discussed his book and his views on some important energy issues including the "shale revolution," coal, "renewables," and his optimism about America's future. Video is available below:

Robert Bryce discusses, Smaller, Faster, Lighter, Denser, Cheaper in Albuquerque, NM on December, 9, 2014 from Paul Gessing on Vimeo.

Explaining the folly of NM's Spaceport

New Mexico's political leaders have few tools available to make the New Mexico Spaceport a viable initiative moving forward. We the taxpayers have already dumped $220 million into the facility to build it (sunk costs). The question at this point seems to be whether the facility can at least generate enough revenue to pay for day-to-day operations. I recently sat down with Channel 13 KRQE to discuss the issue (my comments come toward the end of the story):Given the recent crash in the Mojave Desert, there has been an upsurge of interest both nationwide and around the world. I recently discussed New Mexico's struggles with the Texas Tribune and was quoted by a reporter from the UK's Guardian newspaper.

Rio Grande Foundation Corrects Ten Misconceptions about Impact of Right to Work on New Mexico

(Albuquerque, NM) — In the wake of the 2014 elections, it appears that New Mexico’s Legislature may consider making the Land of Enchantment the 25th “right to work” state in the United States. The new policy brief, “Top 10 Misconceptions about Right to Work in New Mexico,” Rio Grande Foundation president Paul Gessing corrects some of the popular misunderstandings about what a law will and won’t do for our State.

As a starting point Gessing notes that “right to work” laws are first and foremost about free association. Individuals should be able to join or not join unions as they wish and should not be coerced into joining them or paying dues to them as a condition of employment.

This principle of free association is not “anti-union.” Rather, a “right to work” law means that unions have to provide real, tangible benefits to their members. It is worth noting that, according to the Center for Economic and Policy Research, 20 of the 24 states with existing “right to work” laws have higher private sector unionization rates than New Mexico.

Said Gessing, “Given New Mexico’s historical lack of a strong private sector, adopting a “right to work” law would be a logical first step for economic development.” In the paper, Gessing notes that “right to work” states have seen faster growth in jobs, per-capita income, and overall population than their “forced-unionism” brethren.

Not surprisingly, noted Gessing, “Given the fact that more and more people are voluntarily moving to live and work in ‘right to work’ states, once living costs are accounted for, residents of those states enjoy median incomes that are more than $5,000 higher than those in ‘forced-unionism’ states.” In other words, while median incomes are somewhat lower in “right to work” states, Americans continue to move to those states due to the greater worker freedom and because the reduced cost of living more than makes up for the slightly lower pay.

Lastly, according to polling data collected in August 2014 from Gallup, while Americans support unions by a 53-38 percent margin, they support “right to work” laws by much wider margins and across party lines. While it is difficult to find such widespread agreement on any issue, 77 percent of independents, 74 percent of Republicans, and 65 percent of Democrats support “right to work.”

States that currently are Right to Work are shown in red in the map below:

Rio Grande Foundation Submits Comments in Opposition to EPA’s Clean Power Plan

(Albuquerque, NM) —The Rio Grande Foundation today joined with elected officials and organizations from 50 states representing a wide range of industries to voice strong concerns with the U.S. Environmental Protection Agency (EPA) flawed “Clean Power Plan.”

For more than 70 years, New Mexico has exercised exclusive jurisdiction over its retail electricity markets. With the passage of the Federal Power Act in 1935, the Congress codified New Mexico’s—and all States’—prerogative to oversee their retail electricity markets, unencumbered by federal intrusion. EPA’s Clean Power Plan, by its very terms, would erase this “bright line” in jurisdiction between federal and state governments.

In addition to usurping the state’s authority, the rule adds insult to injury by imposing unreasonable costs on New Mexico ratepayers. Residential rates are projected to increase by 13 percent to 14 percent, while industrial rates are projected to increase by 23 percent. Making matters worse, the rule also poses a threat to electric reliability.

In response to previous EPA rules, utilities already have announced the closure of 633 megawatts of coal-fired electricity in New Mexico. EPA modeling for the Carbon Pollution Rule projects that the regulation would cause an additional 1,001 megawatts of electricity generating capacity in New Mexico to retire.

The Rio Grande Foundation’s comments are available online.

Said Paul Gessing, president of the Rio Grande Foundation which organized and submitted the comments, “Reliable and inexpensive electricity is critical to creating a prosperous economy. Working class New Mexicans, small businesses, and those on fixed incomes, cannot afford to see electricity prices skyrocket due to unnecessary and ineffectual federal regulations.”

Gessing further noted that it is not just his opinion that the regulations will be ineffective, in September 2013 testimony before a House committee, EPA administrator Gina McCarthy conceded the agency’s climate-change regulatory regime would not affect the climate, because the preponderance of current and future greenhouse-gas emissions originate in Asia.

In conclusion, the EPA is imposing significant costs on New Mexico businesses and rate-payers for no net reduction in current and future greenhouse-gas emissions.

Discussing the prospects for and importance of Right to Work in New Mexico

Rio Grande Foundation president Paul Gessing sat down recently with Mike Cosgrove of KNAT TV on the topic of "right to work" and what it could mean for New Mexico's economy.

rgf 2014-11 from Paul Gessing on Vimeo.

Tax-Funded Spaceport was never a Good Idea

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

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