November 26, 2022

Do Manufacturers Need Special Treatment? – They Both Need It And Deserve It.

Posted on 22. Feb, 2012 by Stephan Helgesen in Economy, Politics

In one of the most uninformed – and counter-productive – op-eds we’ve read in the last five years, President Barack Obama’s first chairwoman of the Council of Economic Advisors, Christina D. Romer, just spent 1,200 words arguing that we should do nothing about the crisis in American manufacturing.

She meticulously constructed three straw men – market failures, jobs and income distribution – and then proceeded to knock the stuffing out of each of them.  (“Do Manufacturers Need Special Treatment?”, New York Times, 2-04-12)

It was a heroic, if not faintly humorous, performance given Ms. Romer’s recent position in the administration and the fact that few others in the country misread more the depth and the duration of the still largely ongoing Great Recession of 2007.

She was an architect of the administration’s stimulus package, its auto bailout, and its policies that led to the “green shoots” and “recovery summer” fiascos.  But none of that stopped her from eviscerating arguments meant to do something about the crisis in manufacturing.

Ms. Roemer concluded her op-ed by admitting that manufacturing was “the engine of growth that allowed us to win two world wars and provide millions of families with a ticket to the middle class.”

And yet she felt that public policy regarding manufacturing should be “based on hard evidence of market failures, and reliable data on the proposals’ impact on jobs and income inequality”, for which, in her opinion, “a persuasive case for a manufacturing policy remains to be made.”

President Harry Truman, in a moment of sheer frustration, demanded a one-armed economist. He had grown tired of dismal scientists telling him “on the one hand, we should do this. On the other hand, we should do that.”  He had a point.

Now the consensus among too many economists also seems to be that we should let cycles cycle and the economy naturally evolve – and structural collapse be damned.  They spin so many theories, twist so many numbers, and advance so many specious arguments that the cumulative result is nothing gets done.

We’ve seen the hard evidence in the eyes of the real unemployed and underemployed.  We have reliable data on how many factories have closed and how many manufacturing jobs have been lost overseas.  What we, as a nation, lack is the foresight, drive and intensity to re-spark our true engines of growth.

But those sparks will not come from the dismal scientists that Harry Truman dealt with and Barack Obama seems content to deal with.  They will only come from those who actually want to do something, who take pride in making things in America, and who are willing to look to concrete solutions rather than academic sophistry to drag us out of this jobless recovery.

Borrowing liberally from the writings and speeches of Senators Sherrod Brown (D-OH), Debbie Stabenow (D-MI) and Sheldon Whitehouse (D-RI), and from our colleagues at the New America Foundation, we first have to admit that manufacturing is, as they say, ‘critical to the American economy’.

Largest multiplier.  Manufacturing has the largest multiplier of all sectors of the economy.  Every dollar in final sales in manufacturing products supports about $1.40 in other sectors of the economy.  By contrast, the hallowed financial services sector generates only about 50 cents for every dollar of activity.

Productivity powerhouse.  Manufacturing productivity consistently outpaces productivity growth in other sectors of the economy.  Between 1997 and 2007, multifactor labor productivity in manufacturing grew at an average rate of [4.6]% per year.  This was 60% greater than in the private, non-farm economy as a whole.

Good wages and benefits.  Manufacturing employees earn higher wages and receive more generous benefits than other working Americans.   On average, manufacturing employees earn [23]%  more than workers in other parts of the economy.

Diversified employment.  Manufacturing employs workers at all skill and education levels and helps to reduce income inequality.  For non-college educated workers, manufacturing is a crucial source of good, often highly skilled jobs that pay above average wages.

On average, non-college educated manufacturing workers made $1.38 per hour (or 9.2%) more than similar workers in the rest of the economy in 2006-07.

Source of innovation.  The manufacturing sector is of vital importance in maintaining our innovative capacity.  Manufacturers are responsible for more than [70]% of all business R&D, which ultimately benefits other manufacturing and non-manufacturing activity.

Key to an improved trade balance.   An increase in the production of manufactured exports and import-replacing goods in the United States is the only thing that will bring down our trade deficit to sustainable levels and reduce America’s international debt burden.

Critical to other high value-added sectors of the economy.  The maintenance of a strong and vibrant manufacturing sector is essential to other high value-added sectors of the economy, including design, telecommunications and finance.

It’s past time to admit that the Great Recession of 2007 has only exacerbated the adverse trends in manufacturing that actually first reared their heads as far back as 1980, with the “Reagan Revolution”.  And for those thirty years the manufacturing sector has shed jobs faster than many other sectors of the economy.

While there are many reasons for the decline in manufacturing over this period – including productivity growth – and for the closely related economic downturns, productivity growth in truth is actually much less than some economists – Ms. Romer among them – would have us believe.

The now decades long decline in manufacturing is mostly because while other countries have a policy of maintaining capacity and employment, the U.S. does not have a national manufacturing strategy and has not established a framework for creating one.

U.S. government policies across the board – taxes, trade, investments, R&D, exports, infrastructure and procurement – are not integrated into a strategy to restore and grow the U.S. manufacturing sector.

And until they are and America has its own manufacturing policy to rival those of our trade competitors, U.S. manufacturing employment will continue to decline, as will manufacturing output as a percentage of GDP, and the U.S trade deficit will remain crushingly high.

In the sweeping onrush of the Recession, America’s industrial base is undergoing its most radical restructuring in decades as manufacturers dramatically rethink their businesses, with far too little support from Congress and the administration.

These moves are accelerating the U.S. manufacturing economy’s longer-term shrinkage, as well as exacerbating its shift away from heavy sectors.  In some cases, companies are investing in smaller, more-efficient facilities that rely heavily on goods manufactured overseas.

In other cases, such as with General Electric’s avionics business, they are continuing to relocate labor-intensive operations to countries where wages are cheaper and subsidies, often illegal, are available.

As a result, right-headed economists expect unemployment to remain high for many years as millions of American workers in the hardest-hit sectors struggle to find new jobs.  And while some economists see this restructuring as inevitable, those right-headed ones worry that the sheer scope of the cutbacks could doom companies that ought to survive and further weaken an already depleted manufacturing sector.

The erosion of our manufacturing base – our skilled workforces and our plants, production processes and supply chains – continues even as economists like Ms. Romer urge us to do nothing.  But doing nothing is not an option now.

With nearly a fifth of our workforce idled in real terms and with competitor nations buying our under-utilized machines, now is the time to do what we’ve always done: roll up our sleeves and make the best of a bad situation.

A great nation like ours requires time and space to change directions.  As with a supertanker, there is misdirection to slow and shed before a new course can be set.  And there are always obstacles – naysayers, overseas competitors and the inherent inertia of a very large economy – to overcome before resuming flank speed.

We haven’t a moment to lose.

This article was submitted by Leo Hindery, Jr. who  is Chair of the US Economy/Smart Globalization Initiative at the New America Foundation, Co-Chair (with USW President Leo Gerard) of The Task Force on Jobs Creation, founder of Jobs First 2012, and a member of the Council on Foreign Relations.  Rick Sloan is the Communications Director of the International Association of Machinists and Aerospace Workers and Executive Director of its Union of Unemployed.

The penalties of feel-good energy policies

Posted on 22. Feb, 2012 by Stephan Helgesen in Energy/Environment, Politics

Because of the unproven notion that burning fossil fuels causes global warming, saving energy has become the cultural norm with the expectation that reducing the use of coal-fueled electricity and gasoline will help everyone.

More and more wind and solar generation is being installed and cars use less and less gas, with some being all-electric. This should be a good thing, but it ends up costing everyone—and disproportionately penalizes the poor.

Installing an unsubsidized residential solar photovoltaic (PV) system is expensive and the payoff can be decades. As a result, they are typically purchased by only those with substantial disposable income. A few years ago, I participated in a “solar fiesta.”

I live in rural New Mexico where we often have snow on the ground from late October through early March. Due to cost, I only heat my home to 58 degrees in the winter. I have a large south-facing roof surface. I figured I was a prime candidate for a solar PV system. I visited different vendors.

When I asked about the payoff, one vendor looked down his nose and emphasized: “It is not about the payoff.” I could not afford to go solar. I still burn pellets in my stove and bundle up all winter.

Those, who can afford the up-front costs to take advantage of the free energy from the sun, can avoid paying their utility company anything. They may even feel smug that they have beat the system. With net metering, when they generate extra power, the meter may literally spin backward. When the sun isn’t shining, they use the power they’ve banked. The end of the month total can balance out.

However, there are still costs to the electric company. The usage is still monitored. The home, or business, is still tied to the grid. The wires and other system services require maintenance and those costs are factored into the per-kilowatt-hour price and are borne by all the rate payers.

But what happens when the wealthy few, who have the luxury of installing a solar system, no longer contribute to the communal cost of service? The overall cost must be spread to a smaller pool of users, which means rate increases for everyone—except those who are getting “free” electricity from the sun.

Case in point, in Hawaii, government mandates have encouraged the installation of solar systems. In 2011, Hawaii Electric Company (HECO) customers installed nearly triple the number of solar PV panels over the previous year, enough to generate a maximum of 30 megawatts of electricity.

While this free electricity is saving homeowners and businesses millions of dollars in their utility bills, the personal savings translate into a $7.4 million loss to HECO—revenue that would typically contribute to fixed maintenance costs and system upgrades. As a result, HECO needs a rate increase that will cost the average ratepayer up to an additional $10 a month or $120 a year. The Honolulu Star-Advertiser reports: “HECO customers who don’t have solar panels will see their rates go up because of the increase in customers who do.”

Solar advocates often tout the fact that, with subsidies, a system can be almost free—which makes my point. Where do the subsidies come from? Either government funds—meaning taxpayers (you and me)—or from utility company-funded programs—meaning ratepayers (you and me). Either way, everyone pays for a few to benefit and feel good. In the HECO case, Hermina Morita, PUC chairwoman acknowledges, “It’s not equitable. It’s something the commission will have to look at closely.”

On a national scale, there are mandates that cause similar problems.

In 2009, President Obama proudly announced new Corporate Average Fuel Economy (CAFE) standards for vehicles: 35.5 miles per gallon by 2016. Just six months ago, to great fanfare, he ceremoniously upped the ante: 54.5 mpg by 2025. The CAFE part is that a company’s overall fleet must have an average fuel economy of 54.5 mpg. Because Americans continue to purchase more trucks and SUVs with much lower mpg, a company must produce cars like the Volt or the Leaf that are measured at 93 and 99 mpg equivalent. Overall the average might come out in the mandated range. T

he CAFE standards also mean that manufacturers use technologically advanced lighter materials—as a light car gets better mileage. These materials are also more expensive, which increases the sticker price and makes it harder for lower-income people to purchase a new car and may lock them into buying used cars, with lower mpg and frequent expensive repairs.

Like the solar PV users in Hawaii, drivers of electric cars are using the infrastructure, but not paying for it. Drivers of high-mileage cars are using less gas and, perhaps, driving more. Because a good portion of highway construction and maintenance is paid for through gasoline taxes, many states are now looking for additional ways to collect needed funding. While Kansas has only two dozen Chevy Volts registered in the entire state, a bill has been proposed that would impose a new fee on electric- and hybrid-car owners—though it is unlikely to pass.

In West Virginia, lawmakers are considering a “user fee” to make up the shortfall in the State Road Fund. Citing “less gas tax paid” due to “the fuel efficiency of new vehicles, especially hybrids and alternative-fuel vehicles,” Oregon has been testing a mileage-based charge where a point-of-sale system sends data to a central computer that calculates the mileage fee. Washington, DC, is considering a system where a “transponder would calculate the totals” “and drivers would be charged accordingly when they purchased gas.”

Until new systems are in place (despite their big brother-like implications), those who can afford the more expensive, low mpg or electric, vehicles are beating the system by using infrastructure they are not paying for and sticking the rest of the population with the tab and increased operating costs resulting from bad roads. The wealthy, who are saving energy, are increasing costs for everyone.

Like solar power, wind energy is believed to be a saving—by reducing the burning of fossil fuels. Instead, it costs all of us, as the industry is heavily subsidized. Without taxpayer funding, it will fail, which is why advocates have been lobbying for an extension of the twenty-year-old production tax credit. But this supposed energy-saving technology would also cost all ratepayers more.

A recent report on wiring wind energy shows that costs are nearly double what had been estimated. The increased costs will be paid through higher rates. Building a new gas-fueled power plant near the consumers would be cheaper than bringing the wind energy from afar. But once again, the few are benefitting while the average person pays.

Free energy sounds good. Saving energy makes people feel good. But the costs of these sound-good, feel-good policies penalize those who can least afford it—trapping them in a life of government dependence. Since we do not have an energy shortage, maybe that is the goal of all of these energy-saving policies, after all.

This article was submitted by Marita Noon who is the author of Energy Freedom. Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

The most dangerous sentence

Posted on 20. Feb, 2012 by Stephan Helgesen in Politics

Danger walks among us. It stalks us every day of our lives, especially if we’re politicians, and especially if we dare to utter the following sentence…“I changed my mind!”

Those four, simple, innocent words which, when strung together in that manner, can have a disastrous effect on a candidate’s entire political career and persona.

My premise is, quite simply, that it is eminently human and natural to change one’s mind. Indeed, it is unnatural not to! Devolution (read: change) from some previously-held position is actually evolutionary thought!

We must change our minds from time to time in order to further define ourselves and clarify our own personal philosophy. In fact, most of us already do it when new information comes to light OR when we experience a true epiphany (by the way, you don’t have to be religious to have an epiphany; you just need to have an open mind).

That said, there’s a huge difference between changing our beliefs and changing our belief system, but that distinction seems to disappear as soon as one enters the political arena.

Enter the flip flop

Origins of the term flip flop or latch is a circuit that has two stable states and can be used to store state information. Its origin is 1918. The term flip flap which described a cheap thong-type sandal  probably came into being in the mid-nineteenth century. An 1861 letter to the editor of The New York Times mentioned poorly equipped troops in the Seventh Regiment Volunteers wearing flip-flaps. Later, the letter reads: “The men have not yet been supplied with shoes, and yet still march flip-flop. Why?”

In political speak, flip flop has been used to describe candidates who’ve vacillated between two positions. For example, the earliest mention of flip-flop in a political context (as a change in someone’s opinion) was in an October 23, 1890 report of a campaign speech in New York City.

John W. Goff, candidate for District Attorney, said of one of his opponents: “I would like to hear Mr. Nicoll explain his great flip-flop, for three years ago, you know, as the Republican candidate for District Attorney, he bitterly denounced Tammany as a party run by bosses and in the interest of bossism…”

Fast forwarding nearly a century later, it appeared in the 1976 Presidential election campaign, when President Gerald Ford used it against his opponent Jimmy Carter. In 1988, Michael Dukakis used it against his opponent Richard Gephardt, saying, “There’s a flip-flopper over here.”

A very versatile (and equal opportunity) epithet, it has been adopted by Republicans and Democrats. The appellation was heard, repeatedly, in the 2004 Presidential campaign to describe Massachusetts Senator John Kerry and stuck thanks to a chorus of repetition.

It’s now been dusted off and is being used against another Presidential candidate, former Governor Mitt Romney. This time, the focus is on Romney’s stance on abortion (or as the left prefers to call the issue, reproductive rights).

While flip flopper may be a catchy term, it’s often a misguided missile launched against people whose thinking has evolved over time and resulted in a change of a particular belief. Though it may seem that these new positions are proof that the individual has completely reversed himself or herself, it may be unfair to claim that it has changed their entire belief system.

In the Mitt Romney example, I’m guessing that his opinion on abortion is not a reversal of his belief in the overall sanctity of life in general, but of a specific aspect of how our society protects it.

In any case, and regardless of our political affiliation, we should not be criticizing each other because we’ve changed our minds, but instead focus on what has led us to those changes. If change was for political expediency, then fire at will, otherwise let us praise those who continue to grow by redoubling their quest for truth and knowledge.

- Editor

The Invalid Economy?

Posted on 19. Feb, 2012 by Stephan Helgesen in Economy

It’s time to stop pretending that we are preeminent whether it be in design, manufacturing or marketing, and it’s high time that our economy and job market find its elasticity and re-capture the fundamentals necessary to return us to the world’s top spot in any one or all of those three areas.

In some circles, that statement would be interpreted as unpatriotic, but for those who study the world’s economies and markets, it’s probably regarded as reasonable when considering the paucity of our exports and the anemic investment in manufacturing in the USA.

We must not view ourselves as a dowager nation searching for a comfortable chair, limping along with a bad case of economic gout from living too high on the hog, the victim of spending our wealth before it’s earned, but it’s hard not to. Our public sector has grown way too fast in the last decade and especially during the past three years of the Obama administration which has added nearly five trillion dollars of debt and over 100,000 government jobs while losing 13 million private sector ones.

Who’s at fault?

Our unemployment rate has stayed above 8.0% (and even hit the terrible 10% mark) for over 30 months while the number of workers that have given up searching soars from month to month and is now thought to be around 20 million. Our export growth rate (which should be analyzed in terms of volume and diversity of goods produced/sold and not solely as a dollar figure relative to GDP) has lagged behind many of our competitors’ while our companies steadily contract for more manufactured goods (originally designed or developed in the USA) to be made overseas.

Our economy has been robbed of its vitality and jobs by sins of commission as well as omission, but the blame cannot be placed on outsourcing alone. We need to drill down into the fundamental structure of our economy for the real reasons.

Where are the advocates for common sense?

Labor unions and right-of-center talk shows and cable news channels were, up until the President’s recent manufacturing charm offensive, the lone voices crying in the wilderness about job losses, especially those due to off-shoring. Off-shoring, however, is a fig leaf covering our unwillingness to tackle the BIG problems (over-regulation, government intrusion into the free marketplace, a Gordian Knot tax system, etc.).

We’re living on borrowed time, and the clock is rapidly ticking while we attempt quick government fixes like ‘Stimulus Packages’ that are only postponing the inevitable day of reckoning when we could see whole industries fall by the wayside and new small business start-ups stop dead in their tracks.

Job-creating foreign investment has slowed to a trickle in an America that was once thought of as ‘Treasure Island,’ the place where fortunes were made and where real estate turned freely and often. America’s factories, office buildings and now homes lay empty waiting for the day when the For Sale sign is replaced by the Repo sign.

Real corporate values have plummeted, and while some would say that these are market corrections or periodic adjustments, others offer a more dire explanation and posit that they are the harbinger of a serious flight from risk-taking and a wholesale desertion of confidence in the American engine of growth. To many, we’re looking more like the “Little Engine That Could” as we chug along, trying our best to get up the hill towards prosperity, buoyed by our own cheerleading.

What about infrastructure?

Our country is a dike that has sprung many leaks from neglect. Our infrastructure is crumbling. Apart from the obvious roads and bridges that desperately need repair throughout the USA, we need a massive investment in our energy grid that could cost upwards of $1.5 trillion. Our broadband coverage in some parts of the country is truly third-world. We have no coherent short-term or long-term workable energy plan that will assure us the energy we need to jump-start energy-intensive industries and provide for the general public’s mobility.

If the President is looking for a ‘Sputnik moment’ to galvanize the country and move us out of our economic morass, he’s going to need to make it himself with sound leadership by addressing some of the problems I’ve described. Incurring more government debt won’t cut it.

Pouring money helter skelter into fledgling industries or companies like recent billion dollar plus investments in solar energy companies or electric cars won’t cut it, either. That will get you a temporary bump in the polls among academicians, scientists and special interest groups, but the general public knows that these fixes aren’t easy ones. Good speeches and bad investments won’t solve the problems we are facing.

The Wall Street Journal recently published an article (“Manufacturing Decline,” Feb. 17, 2012). In it they propose that we should take heart, because our manufacturing sector is not as bad off as we think, pointing to advances in productivity as one of the main reasons that we should not despair. But everybody knows that worker productivity has grown because fewer workers are doing more work due to retrenchments in the workplace AND because of a steady adoption of automation.

Technology’s not to blame.

None of us should be against new technology or technology-spurred innovation in America’s workplaces, but all of us should be concerned that a country our size cannot live by selling services to one another (the service sector, as a percentage of GDP in 2010, grew by 24% while manufacturing grew by only 11.7%).

While the problem of right-sizing the American economy is enormous, we have no choice but to tackle it both as virus that’s attacking our immune system and as a debilitating illness.  Antibiotics and short-term measures may kill what’s immediately assaulting our system, but we also need a lifestyle change which includes going offline for awhile and thinking through the impact of all of the decisions we make that will ultimately affect our economic lives.

Stephan J. Helgesen





- Editor

NM Driving Licenses to Illegals: An Affront to U.S. Security

Posted on 17. Feb, 2012 by Stephan Helgesen in Politics, Social/Cultural

The New Mexico Senate once again showed its true colors by not supporting legislation that would have  overturned New Mexico’s driving license law that allows illegal aliens (or undocumented migrants as they are likely to be called by the Democrats) to obtain an important transitional ID card. This is further proof that our Democrat Senators (not one Republican voted to retain it) are motivated by either a deep-rooted open borders ideology or are unwilling to follow the wishes of the voters who overwhelmingly (some 70%+) opposed the law.

This is not a racial or ethnic issue; it’s a security issue

With this vote, New Mexico retains its number one position as the laughingstock of the rest of the nation with its head-in-the-sand mentality about the real security dangers our current law presents. The claim that the Richardson Administration made about the law’s passage boosting the number of insured drivers on New Mexico’s roads was probably a Trojan Horse for the real reasons: so that Governor Richardson could ingratiate himself with an ethnic group that didn’t quite view him as one of their own or a wish to appease our neighbor to the south during a time when he had aspirations to a higher political office.

There is absolutely no proof to that hypothesis, but what other reasons would there be? Was he intent on compromising the security of our flying public by giving possible criminals who held legitimately issued documents a way to get on board or was he interested in increasing the number of potential voters who would use this license to obtain a legitimate voter ID card (and who would presumably vote for him)? I don’t think so.

Then what other reasons are left except the flimsy argument that by giving people who are here illegally a way to legal status on our roads they will immediately take out expensive liability and collision insurance policies for themselves and their vehicles? Does anyone really believe that would – or has – happened and where are the statistics that prove it?

No, it is more likely that this NM driving license issuance must be viewed as the first legitimization building block in protecting our illegal aliens from getting their cover blown while they’re here. We know it created an industry of illegal license sales by companies that specialized in getting them for paying clients, thus causing a lack of credibility for NM driving licenses around the U.S.

The real reasons for the Senate’s ‘no’

I suspect there may be other reasons why all but one Democrat Senator voted to maintain the status quo. It could be because a large percentage of the Senators’ constituents are among that group of illegal immigrants that have these licenses already or they are related to people who have these licenses. Had they voted to take them away they would have been roundly criticized for discriminating against refugees from a failed economic state. They would have risked being called ‘turncoats,’ ‘racists’ or worse. Like so much in New Mexico, it’s all about politics. Too bad there aren’t more stringent licensing requirements for politicians.

- Editor

Roundhouse Roundup – Feb. 13, 2012 11:30pm

Posted on 14. Feb, 2012 by Stephan Helgesen in Politics

On a vote of 12 to 30, New Mexico Senators voted down a bill to make it illegal for those here illegally to receive a New Mexico Drivers’ License

Santa Fe–On a vote of 12 to 30, New Mexico State Senators voted against a floor substitute bill that its sponsor said would have made it illegal for illegal immigrants  living in the state to get drivers’ licenses.

Senator Bill Sharer (R-Farmington) proposed a floor  substitute to Senate Pro Tem’s Tim  Jenning’s SB 235/a that Senator Sharer  said would have protected the two million New Mexicans who deserve a New Mexico license and the bill would have denied a New Mexico drivers’ license to those are here illegally. Senator Sharer said he was disappointed there was very little discussion on his substitute bill.

Senate Passed Bill to Require Assisted Living  Contract Refund Policy

Santa Fe-  The New Mexico State Senate unanimously passed a bill to require a refund policy for contracts with assisted living facilities  when a resident dies.

Senate Minority Leader Stuart Ingle (R-Portales) sponsored the legislation that requires contracts to include a prorated refund policy effective when the resident has died and the personal effects have been removed from the assisted living facility.

Senator Ingle sponsored the legislation after being contacted by a family whose loved one died a day after the family had paid a full month’s assisted living rent and the facility  would not refund any of the rent, even after it had rented the room to another resident.

“This situation really touched me.  I just cannot believe a business can behave this way. I talked to a number of assisted living facility directors who do have policies to refund the rent.  But for those who do not have such policies, we need a law to require this refund policy,” Senator Ingle said.  “I just felt like something needed to be done.”

The substitute for SB 275 passed the Senate 38-0. It now goes to the House for consideration. There is an emergency clause on the bill.

Hard-hitting, Bipartisan, Anti-corruption Landmark Piece of Legislation Passes Unanimously Both Senate and House

News Conference can be found at:

And at

SB 197 Felonies for Public Officials

Sponsored by Senate Minority Whip  Bill Payne (R-Albuquerque)

Passed House 67-0, Passed Senate 39 to 0- on to Governor

Santa Fe— A hard-hitting, bi-partisan, anti-corruption bill passed the House today 67-0 after having passed the Senate 39-0 last Thursday. The sponsor of the bill, Senate Minority Leader Bill Payne (R-Albuquerque) said it is one of the major bills of the session to pass both Houses.  He has been working for four years on the bill to fine corrupt public officials who are guilty of a felony related to their public office.

The Democratic Majority Leader of the House, Rep. Kenny Martinez  carried SB 197 in the House.

Under this major anti-corruption bill,  SB 197- Felonies for Public Officials- corrupt officials could receive a fine and lose their fringe benefits like their pensions if they are found guilty of a felony related to their public office. They could also lose the salary they were paid from the point the corruption began which was associated with their public office.

In addition to a criminal trial, a separate trial would be held to determine the additional penalties to the basic criminal sentence. Those penalties may be increased by an additional fine not to exceed the value of the salary and fringe benefits paid to the offender.

“Corrupt officials should lose their salaries and benefits when using their office for criminal activity,” Senator Payne said. “Public officials who violate the public trust should receive a greater punishment than just the basic sentence. Being fined the amount of their salary and benefits might make these corrupt officials think twice about violating corruption laws.”

Senate Bill 197 is an anti-corruption legislation that adds a new section to the Criminal Sentencing Act.   It imposes an additional fine not to exceed the value of the salary and fringe benefits paid to the offender if  the offender holds an elected public office and the conviction relates to the office held. The salary/ benefits calculation starts after the commission of the first act.

- End Roundup







Roundhouse Roundup – Today, Feb. 13, 2012 at 10:45am

Posted on 13. Feb, 2012 by Stephan Helgesen in Politics

What Might be Major Bill of Session to Pass Both Houses on House Floor Today?

Anti-Corruption Bill Passed Senate Unanimously last Thursday

SB 197 Felonies for Public Officials

Senator Bill Payne

Passed Senate 39 to 0, 17th Item on House Calendar today

Santa Fe— What might be one of the major bills of the session to pass both Houses is on the House Floor today. The State Senate has already unanimously passed SB 197, a bill to fine corrupt public officials who are guilty of a felony related to their public office. The Democratic Majority Leader of the House, Rep. Kenny Martinez is carrying  Senate Republican Whip Bill  Payne’s bill in the House.(R-Albuquerque)

Under this major anti-corruption bill,  SB 197- Felonies for Public Officials- corrupt officials could receive a fine and lose their benefits like their pensions if they are found guilty of a felony related to their public office.  In addition to a criminal trial, a separate trial would be held to determine the additional penalties to the basic criminal sentence. Those penalties may be increased by an additional fine not to exceed the value of the salary and fringe benefits paid to the offender.

“Corrupt officials should lose their salaries and benefits when using their office for criminal activity,” Senator Payne said. “Public officials who violate the public trust should receive a greater punishment than just the basic sentence. Being fined the amount of their salary and benefits might make these corrupt officials think twice about violating corruption laws.”

Senate Bill 197 is an anti-corruption legislation that adds a new section to the Criminal Sentencing Act.   It imposes an additional fine not to exceed the value of the salary and fringe benefits paid to the offender if the offender holds an elected public office and the conviction relates to the office held. The salary/ benefits calculation starts after the commission of the first act.

Senator Payne has sponsored similar bills for the past several years, but none of them has passed both Senate and House chambers to become law.

Earlier in the session today, Senate Minority Caucus Chair Steve Neville’s SB 53- A bill designed to remove any possible undue political influence that could lead to corruption on the State Investment Council- unanimously passed the Senate.

For more information, contact: 505/986-4702

- Editor

Roundhouse Roundup: Feb. 12, 2012 – The Senate

Posted on 13. Feb, 2012 by Stephan Helgesen in Politics

State Veteran Definition would include those National Guard members and Reservists who have not been called up to active duty

Santa Fe—The New Mexico State Senate unanimously passed  Senator Bill Burt’s (R-Alamogordo) bill to define a New Mexican veteran to include reservists and National Guard members who have not  been called up to Federal active duty.

Senator Burt said the practical impact of the bill will allow National Guard members and Reservists who have not seen active duty to access state veterans’  benefits.

“By including reservists and the National Guard in our definition of veteran, they will be able to get a slight break on their property taxes and will be able to enter for free our  state parks on Veteran’s Day,” Senator Burt said. “It is more than symbolic,  our guardsmen and women and reservists are veterans and deserve to be recognized even if they have not served in active duty.”

SB 369-Veteran Services Dept. Definitions- defines a New Mexican veteran to include those Reservists and National Guard members who have been assigned to duty for a minimum of six continuous years.

Those who have been dishonorably discharged would not be able to access the state benefits.

Senate Minority Leader’s Hay Bill First of Session to pass both Houses and to be placed on Governor’s desk  (first bill outside of bill to pay for session.)

Santa Fe—Senate Minority Leader Stuart Ingle’s hay bill is the first bill,(outside of the feed bill that pays for the session), to pass both houses and to be placed on the Governor’s desk for her action.

Senator Ingle said, “Perhaps being the first bill to pass both houses this session can spotlight how important this hay bill is to solving a huge problem for all New Mexicans,” Senator Ingle said. “This bill is especially important  for the dairy industry in Southeastern New Mexico that has struggled to feed its livestock because of the extreme drought in recent years.”

Hay in recent years has had to be hauled in from other states and as far as Canada creating challenges to the agriculture industry.  Senator Ingle’s bill will allow oversized hay loads, that will not forego highway safety, to be transported on state highways.

“On behalf of the agriculture industry, I am hopeful the governor will sign this bill quickly so it can take effect immediately with its emergency clause,” Senator Ingle said.  “Because of the drought, hay from outside the state needs to be transported on the interstate system and that high fuel costs has made  it necessary to maximize the hay loads on each truck.”

SB 56/a- Hay Transportation Permits & Distances- eliminates distance limits on hay transportation and allows special permits to be issued by the Motor Transportation Police for truck loads wider that what are currently allowed.  Current law requires permits for loads up to 12 feet wide and then only if the load is transported no farther than 200 miles.

Senator Ingle said New Mexico is one of the leading dairy states in the nation with livestock that needs feed, because of the multiple years of drought, New Mexico has not been able to  grow the hay needed to sustain the livestock industry.

Senator Ingle has said, “The point here is to make it easier to haul hay,” Senator Ingle said.

The emergency clause on the bill means it will take effect immediately if it is signed into law.

Senate Passes One Year Extension for School Budget Flexibility

SB 209   School District Financial Flexibility-

Senator Vernon Asbill

Passed Senate 28-14

Santa Fe—The New Mexico State Senate tonight passed a bill to give a one year extension for school districts on how they spend their limited dollars.  Senator Vernon Asbill (R-Carlsbad), the sponsor of SB 209, said because of continued budget constraints, school districts  need a  one year extension to the three years they received in 2010 to get waivers to operate in exempt of the public school code. Those exemptions would include being able to make adjustments to class loads, length of school days, class materials  and other operating expenses.

“This extension is a necessity. No one likes it, but school districts need the flexibility on how they spend their limited dollars during these continued tight times,” Senator Asbill said.

The Senate passed the bill 28-14.

Schools would still need to apply to the Secretary of Education to temporarily waive rules pertaining  to some items covered in the public school code.

The bill will give school superintendents and school principals one more year of  flexibility in operating their schools as they face possibly having to adjust their budgets to live within the reality and means of fewer tax dollars going into the state coffers.

The bill continues to require the Public Education Department to monitor the waivers and report to the Legislative Education Study Committee and Legislative Finance Committee any adverse affects the waivers could have on student learning.

Senate Passes Bill to Help Make ERB Solvent

In what was called a balanced approach, the New Mexico State Senate passed a bill to help make the Education Retirement Board retirement fund  (ERB) for employees of  public schools and universities solvent.  Without the corrective action in the bill, it was estimated the fund would be insolvent in less than 30 years, in 2039.

The substitute bill for SB 150- Educational Retirement Changes- makes primarily three adjustments.

It would require  both  public schools and universities and their employees to gradually contribute  more  out of each paycheck to the retirement fund over the next seven years.  On a graduating scale until 2020,  employees would contribute 3.4% more of their salary into their retirement fund and the schools would contribute 2.5% more into the fund.

The bill would also create for the first time the minimum retirement age of 55 to receive retirement benefits  for those starting to work after this July.  Now, a person could start receiving retirement pay as early as age 45 if they had started working at age 20

And the bill requires eight years of service to be vest compared to five years for employees who start after this July.

The legislation is sponsored by Senate Minority Leader Stuart Ingle (R-Portales) who said, “The changes have to be done for the good of our hard working school teachers and university personnel so they will receive the retirement they have worked so diligently  for. Without these changes, the money will run out and won’t be there for the future.”

The contribution changes will affect all public education employees.

The bill passed 30 to 12.

Senate Unanimously Passes Bill to Unlock Nearly $2 Million for Low- Interest Business Loans

Senator Sue Wilson Beffort is Sponsoring Pro-Businesses Bill-

SB 189- Development Training to Encourage Economic Development

Senate passes 41-0

Santa Fe-  The New Mexico State Senate passed unanimously a bill to unlock nearly $2 million in low-interest loans for New Mexico small businesses. The $1.9 million would be able to be spent on economic development projects if a bill that passed the Senate 41 to 0  becomes law.  The bill sponsored by Senator Sue Wilson Beffort (R- Sandia Park) is needed so the state’s Economic Development Department can access $1.9 million worth of development funds,  currently they do not have the authority to spend it. SB 189 now goes to t he House.

“Freeing up these funds should have a big impact as we  try to do all we can to help New Mexico businesses,” Senator Wilson Beffort said. “These funds would be used for community development and for low interest loans for small businesses and for training.  I am hopeful real jobs will result from this money being spent on economic development projects throughout the state.”

SB 189- Development Training clarifies that the $1.9 million balance in the development fund can be invested in economic development and will not revert at the end of  the fiscal year to the General Fund.

“If this bill passes, this pool of money  will be available to be invested in New Mexico business development and no tax increase would be required to have this money flow into our communities,” Senator Wilson Beffort said.

Senate Passes Bill to Quicken Background Checks  Prior to Placing Children in Emergencies

SB 147/a CYFD Emergency Placement Background Checks

Senator Sander Rue

Senate Passed 37 to 2

Santa Fe—The New Mexico State Senate passed SB 147/a  to improve the safety of children placed in the home of relatives, neighbors or friends in an emergency situation.  If it becomes law, abused and neglected children needing emergency protection from the state would not be placed in a home with a known convicted felon because background checks would be conducted faster than the current process  and prior to a child being  placed in a home.

State Senator Sander Rue (R-Albuquerque, Rio Rancho) is sponsoring the bill to allow the Children, Youth and Families Department (CYFD)  to conduct a federal criminal history records check with the FBI of all adults residing in a home where a child might be placed by the state when there is an emergency and a child is in need of state protection. It would producer faster criminal checks than what CYFD is currently able to attain.

“We want to ensure that when an emergency arises,  the state places  no child in a home that could be potentially volatile if a felon is living in the home,” Senator Rue said. “The state needs to do everything it can to protect these children that are under its care and we need to be able to do it quickly.

This will allow the state to do instant nationwide name checks through the National Crime Information Center.”  The NCIC conducts a broader, nationwide check to cover what could be potential concerns in the home.”

CYFD currently conducts fingerprint-based national criminal records background checks on all foster and adoptive parent applicants, however these checks do not provide immediate results. The bill provides CYFD with more timely access to federal criminal records histories than currently is available.  This information is critical to assessing child safety in the placement.

This bill adds a new section to the Children’s Code permitting the Children Youth and Families Department (CYFD) to request from a criminal justice agency a federal name-based criminal history record check of each adult residing in a home where a child will be placed in an emergency due to the absence of the child’s parents or custodians.

The bill also contains provisions for fingerprint-based verification by the department of public safety of name-based checks completed.  The bill contains an emergency clause.

According to bill analysis, law enforcement may place a child into the emergency protective custody of CYFD when law enforcement believes that a child is abused or neglected and that there is an immediate threat to the child’s safety.

In such circumstances, the parent is unavailable to provide care and protection to the child, and CYFD is responsible for identifying a safe and appropriate placement for the child. Placement options can include appropriate relatives so as to reduce the trauma to the child and preserve family connections.

The bill also establishes provisions for follow-up on any name-based check with a fingerprint-based check within fifteen calendar days from the date of the name-based check.  The bill provides provisions to remove a child from the home immediately if any adult resident in the home fails to provide fingerprints or written permission to perform a federal criminal history record check when requested to do so.

When placement of a child in a home is denied as result of a name-based check and the resident contests the denial, the bill allows the resident to still submit fingerprints with written permission allowing for the fingerprint based check.

For the purpose of this bill, the term “emergency placement is defined as instances when CYFD is placing a child in the home of private individuals, including neighbors, friends or relatives as a result of sudden unavailability of the child’s primary caretaker.

End Roundup

Federal Campaign Finance Reform and Corporate Responsibility Run Hand in Hand

Posted on 12. Feb, 2012 by Stephan Helgesen in Politics

At the dawn of this election year, American democracy is emerging as a victim of collateral damage in a long war over the responsibilities corporations bear to their shareholders and the nation.

The battle has been underway since at least 1970, when John Gardner, a Republican who had earlier resigned from President Lyndon Johnson’s cabinet, founded Common Cause and sparked the movement for campaign finance reform.  On one side were men like Gardner and Edmund W. Littlefield, a natural resources company executive who then headed the Business Roundtable. They argued that a truly responsible CEO has equal and concurrent responsibility to his employees, shareholders, customers, communities and the nation.

Their views long held sway. So much so that, in 1981, the Business Roundtable and the nation’s most prominent CEOs formally embraced the multi-constituent view of corporate responsibility and, along with it, opposition to undue and inappropriate influencing of politics by corporations.

But beginning with a much-publicized, May 1970, New York Times Magazine article by economist Milton Friedman, conservatives have gradually redefined corporate responsibility. Friedman held that CEOs and corporations had responsibility only to maximize the value of shareholders’ equity and that a substantial portion of that equity should be held by senior management in the form of stock options.

By 1997, the same Business Roundtable which in 1981 so honorably defined corporate responsibility formally reversed its view. This embrace of the Friedman view has prompted big business to open wide its previously rather pinched-off spigot of campaign contributions and lobbying budgets, turning a multi-decade period of corporate responsibility into the era of corporate irresponsibility.

The shift is largely why income inequality in the United States is now the most extreme since 1928 and why the average public company CEO now earns 400 times as much as his average employee.

While relatively few bulwarks remain against this rising tide of oligarchic corporate influence, Common Cause has continued to work for campaign finance reform, including the McCain-Feingold Bipartisan Campaign Reform Act of 2002.  But the progress forged through McCain-Feingold was dealt a near fatal blow in 2010 with the Supreme Court’s landmark decision in Citizens United v. FEC.

In Citizens United, the Court determined that corporations essentially are “people” and that the First Amendment prohibits government from limiting political speech funded by corporations or unions.  The decision did not remove the ban on direct corporate contributions to candidates and parties. But by giving corporations and unions the unlimited ability to fund “independent” political ads, it handed a relatively small group of CEOs near-unlimited powers of persuasion in what the Founding Fathers intended as the quintessential democratic process of the Republic.

Another ruling in 2010, by the District of Columbia Court of Appeals, applied Citizens United to allow, a not-for-profit organization, to accept unlimited contributions from individuals for independent expenditures.  Thus “Super PACs” were born.

Before we as a nation succumb to the abandonment of fairness and balance in our electoral process, we need to press the current Congress to stop the bleeding. And we need to use the 2012 election cycle to determine whether the values and views of the candidates can provide the long-term electoral process fixes we need and thought we had found in McCain-Feingold.

To start, institutional investors, policy makers and voters should demand administrative policies, legislative action, and voluntary steps by corporations to limit corporate political spending.

The Securities and Exchange Commission, in conjunction with the FEC, should use its existing powers to force public disclosure of all corporate political contributions and lobbying to the investing public.  The disclosure requirement should include contributions made through a “bundler” or intermediary such as the U.S. Chamber of Commerce or the Business Roundtable.

Separate and apart from any regulatory action the SEC might take, executives should be pushed to make a voluntary choice not to use company funds to influence elections.

The two best ‘voices’ to help advance this cause and begin to again redefine corporate responsibility are the nation’s public pension funds and progressive civil rights organizations.

The civil rights community traditionally has been little interested in campaign finance reform. But it is indisputable that big business and its massive campaign contributions to Congressional candidates have directly enabled insensitive immigration policies, regressive tax policies, and continuing attacks both on reproductive rights for women and equal rights for gays and lesbians. That should spur civil rights organizations to demand an end to political contributions which work against a fair and inclusive society.

We are at a genuine turning point in electoral politics, when as a nation we will decide whether corporations and a few extremely wealthy individuals or the working majority of blue- and white collar workers, small business people, students and others striving for the American Dream, will control our government. If we don’t rein in corporate political contributions and their influence, then for the middle class the analogy of bringing a pocket knife to a gunfight will continue to stand true.

This article first appeared in Common Cause Guest Blogs and was submitted by Leo Hindery Jr. who is chair of the US Economy/Smart Globalization Initiative at the New America Foundation, co-chair (with USW President Leo Gerard) of The Task Force on Jobs Creation, founder of Jobs First 2012, and a member of the Council on Foreign Relations. He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media, and is currently an investor in media companies.


2011 New Mexico Home Sales Nearly Equal 2010 Numbers

Posted on 12. Feb, 2012 by Stephan Helgesen in Economy

13,233 New Mexico sales were reported to the REALTORS Association of New Mexico (RANM) during 2011.  This number is 1.4% less than the number reported for the year 2010.  Twelve of the counties reporting sales showed an increase in 2011 over 2012; 16 counties reported a decrease.

Fourth Quarter 2011 sales numbers were 8.4% higher than numbers reported for the fourth quarter of 2010.  December, generally a slow month for sales, bucked the usual trend and 2011 numbers were only .3% less than November 2011

RANM President Debbie Rogers of Silver City says “The pattern of home sales in recent months seems to point to a modest market recovery.  Record low mortgage interest rates, job growth, and bargain home prices are giving more consumers the confidence they need to enter the market.”

Distressed sales continue to be reflected in the median price of homes.  Both the fourth quarter and December 2011 median price statewide was $165,000.  For the year 2011, the statewide median was reported at $167,000.  This number if 10% lower than the 2008 median price, but only 4.5% less than the 2010 median price.

Steven Anaya, RANM Executive Vice President, speculates “Median prices are still going down, but at a slower rate than previous years.  This seems to indicate the number of foreclosure and short sale homes is slowly beginning to be a smaller portion of the monthly sales.”

The trends and numbers reported are only a snapshot of market activity.  If you are interested in buying or selling, consult a REALTOR familiar with your market area; he/she can provide information on specific trends in your neighborhood.

Statistical information and trends are based on information furnished by New Mexico Member Boards and MLSs to U. S. House Stats. Current reporting participants are: Greater Albuquerque Association of REALTORS, Las Cruces Association of REALTORS MLIS, New Mexico Multi-Board MLS (Artesia, Carlsbad, Clovis/Portales, Deming, Gallup, Grants, Hobbs, Las Vegas, Sierra County areas), Otero County Board of REALTORS, Roswell Association of REALTORS, Ruidoso/Lincoln County Association of REALTORS, Santa Fe Association of REALTORS, San Juan County Board of REALTORS, Silver City Regional Association of REALTORS, and the Taos County Association of REALTORS. Reports represent single family residential data only.  Information does not necessarily represent all activity in any market/county.  Figures based on reports run 1/18/12.  Visit (housing trends) for county and board statistics.

This information was submitted by The REALTORS Association of New Mexico which is one of the state’s largest trade associations, representing over 5,800 members involved in all aspects of the residential and commercial real estate market.


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