Saturday, January 26, 2013

American Democracy: Terms of Surrender

Republican Party takes control after 2012 Democratic Party election victory.

Facing Facts

The chart shown above is not, by itself, a grim picture of a failed democracy.  If an election had been held where Republicans had swept the country, one could not only reasonably expect this outcome, but one would also be quite comfortable with its legitimacy.  The chart could very easily be representative of a robust American democracy in action.

However, the important condition in that argument would have been the one about a Republican electoral victory.  

Gosh.  If the Republicans hadn't won the election, and the results still turned out to be these results, the "legitimacy" idea would have already hidden under the couch -- under he couch with the old "robust democracy" idea.

One additional fact must be added to present that picture, and that fact is that Republicans didn't win the election.  It just looks like they did when we look at the chart.  To make all of this more easily digestible, let's try to forget that we're talking about the United States here.  Let's replace the "United States" name with that of a failed autocracy somewhere far away.

Sadam Hussein's old Baathist dictatorship would be a good example.  The rolling "imperceptibles" of Putin's Russian Federation might be another.  In cases like these, there are elections, but the results of the elections -- if anyone even knows what those results were -- don't have much influence on the distribution of power afterwards.

Here in the bastion of democracy, we know the results of the elections.  Also, around here we might have expected those results to have directed the distribution of political power afterwards, too.

When the broken down American corporate media actually reports post-election details from one of those unfortunate autocracies, that reporting paints a picture of a country about to blow its lid.  Like autocratic Egypt or Libya.  The citizens of such a country are well aware that they did not get what they voted for in the elections.

Those citizens knew very well that they were not in a democracy.

On a further note, the similarity to Sadam's Iraq can be taken another step in its comparison to the post 2012 election United States.  During the Iraq War the minority Sunnis had been convinced that they were, actually, a majority.  This "convincing" had been done by decades of relentless lie campaigns, and when the sectarian part of the war had been joined, the Sunnis had been misled to very reasonably expect an easy victory in their effort to brutally subjugate the "minority" Shi'ites.

Since the US corporate media won't touch this story with a stick, let's just settle in with this MeanMesa post for a quick run down on what's just "happened" to us.

The Post Election US House of Representatives

Every seat in the entire House of Representatives comes for a vote each two years.  Every seat.

This process can be -- and was -- subverted from any possibility of unilateral democracy by the redistricting "rights" reserved for state governments.  By gerrymandering the district boundaries, a state government can create pockets of partisan residency, masquerade these as "coinicidental" divisions of the state's population of voters while isolating pockets of opposition residency, and pretty dependably deliver "district" election "victories" which do not represent what would have happened if everyone in the state had simply gone to the polls and voted.

Eight US states had, by the 2012 election, fallen under the control of anti-democracy, Republican governments.  In these eight, both the state house and the state senate were also under control of the same group. Due to this unanimity, there was no effective dissent when the state voting district boundaries were "sliced and diced" to manipulate the election.

The anti-democracy results of these cases can best be understood by considering the alternative.  If these states had simply held a state-wide election to select House members, the total vote would have been manifest in the selection.    This was not the case when the gerrymandering had been conducted.  After that, a majority of votes  -- which would have presumably elected a corresponding majority of candidates from one party or the other -- instead, elected candidates from the gerrymandered districts.

The point here is that the House members elected in such gerrymandered elections did not, generally, receive more votes than those who lost.  In fact, if all the votes won by the House members who were elected were compared to all the votes cast for House candidate who did not win, we would see that winning more votes would not necessarily win an election in these gerrymandered states.

The number of votes for all House Republican election winners was, in fact, one million one hundred thousand lower than the total number of votes won by House Democratic election winners.  This would not be particularly troubling except that even with one million one hundred thousand fewer votes, the Republicans won a majority of the seats in the House.

In a democratic election, one would expect the party with the candidates receiving the most votes to elect the most candidates. Anyone who wishes can, at this point, begin to add a long list of "complicating factors" in the hope of resolving or buffering the paradox between what happened and a democratic election.  In MeanMesa's view, this paradox cannot be resolved or mitigated in the manner.

Something else happened here.  Something very undemocratic.

We have seen the outcomes of the election of this party's majority in 2010.  We should expect more of the same.  The tea bag House members will now not even look at the polling of their presumptive constituency.  Answering only the orders of the oligarchs who own their party, their governance would not be representational or democratic even if they had been elected legitimately.

The Post Election US Senate

Even with the illegitimate oligarchic control of the House of Representatives, a functional Senate could have theoretically continued to provide at least a modest reserve of democratic governance.  This "theoretical dream" would have seen the traditional political adversaries in the Senate proposing competitive legislative solutions in response to the needs or ambitions of their constituencies.

Had this traditional process been under way in the Senate, we would have seen the debates where alternate solutions were being presented by the respective sides.  Naturally, during such a traditional process, there would have been "winners and losers."

However, this is not what we've seen going on in the Senate.  Rather than accepting the "winners and losers" outcome of opposing arguments, arcane Senate rules have been employed -- over and over -- to preclude any outcomes at all.  Although a variety of these "rules" has been employed for these ends, the Senate filibuster has been the worst offender by far.

To be fair, the rules of the Senate have followed an historical purpose.  As a "deliberative body," the Senate has, in the past, adopted rules such as the filibuster to prevent the "tyranny by the majority" where the majority in the Senate simply runs over the minority on ever issue.  This was, reasonably, considered to not be "deliberative," and hence, not consistent with the fundamental idea of the Senate.

However, the Republican minority in the Senate during the Obama Administration has essentially employed the filibuster rule immediately every time Senate legislation has come up for "cloture," that is, every time legislation has emerged from committee on its way to a vote in the entire Senate chamber.  When this occurs, rather than a simple majority of 51 Senators to pass the bill, 60 are required.

The filibuster chart used by Dr. Maddow (image source)
The most recent problems have arisen for exactly this reason.  With Senators now voting almost exclusively along party lines, the Democrats don't have a 60 vote majority to pass legislation because the Republicans block such action with their minority votes.  The "cloture" mechanism prevents the bill's vote in this precise manner.

Almost nothing is getting through the Senate.

Worse, when "almost nothing" is getting through the Senate at the same time that "almost nothing" is getting through the House, the government is paralysed. (The House, under control of the tea bag oligarchy, is actually passing bills right and left, but these tend to be ridiculous political statements rather than any serious legislation.  During the last session, for example, the House tea bag ideologues repealed ObamaCare 33 times, undercut the Supreme Court decision on Roe vs. Wade dozens of times and attempted all manner of other bills which had no chance of surviving the Senate or ever being signed by the President.)

The Senate, at the beginning of each current session, has an opportunity to "change the Senate rules" (by a simple majority) which will be in effect for the entire session.  One of these changes could have been a modification of the filibuster rule.  Several ideas were presented such as requiring a "talking filibuster" or putting a "time limit" on how long a filibuster could prevent progress on a certain bill.

The Democratic Senate Majority Leader, Harry Reid, had spoken openly about changing the filibuster rule during the 2012 election campaign.  Americans favored such a change by a significant majority as seen the public opinion polls.  We can see the sort of thing that the Majority Leader was saying in this except:

Huffington Post
December 5, 2012
Harry Reid: Filibuster Changes
 Will Take Place In January
(Read the whole article here. )

WASHINGTON -- Keeping with his post-election pledge to reform the filibuster, Senate Majority Leader Harry Reid (D-Nev.) on Tuesday proffered that changes to the rules of the upper chamber will be made, leaving it up to Republicans if they would like to participate.

"There are discussions going on now [over filibuster reform], but I want to tell everybody here. I'm happy I've had a number of Republicans come to me, a few Democrats,” Reid told reporters Tuesday at his weekly press availability. “We're going to change the rules. We cannot continue in this way. I hope we can get something that the Republicans will work with us on.”

“But it won't be a handshake,” he added. “We tried that last time. It didn't work.”
Asked to confirm if his comments meant that the rules would change and Republicans can choose to be a part of that change if they want, the Nevada Democrat responded, “That's right. Yup."

Senate Minority Leader Mitch McConnell, who has repeatedly slammed Democratic efforts to reform the filibuster, was unmoved by Reid’s statement.

"Well, there is growing Democratic unease with breaking the rules to change the rules,” McConnell said later Tuesday at his weekly press conference. “I think it will be very difficult for that to come about. I think it will be bad for the Senate.”

Now, remember that Senator Reid is in charge of the sole remaining element of the Congress which continues to represent an actual constituency of voters. Expectations were high that a change to the filibuster rule would result in a Senate which could actually act.  Naturally, his comments in favor of changing this rule were well received voters hoping to re-establish the representative democracy.

Now, it is January, and Senator Reid has just closed the "rule changing" period for the next Senate session.  Instead of changing the filibuster rule, Senator Reid has agreed to allow the minority Republicans continue to paralyse the Senate for the next session.  This means that Senate Republicans will continue to be able to filibuster every bill in the same way they filibustered every bill in the last session.

Reid's leadership could take some of the blame for this treachery, but the real villians were sitting in the Senate chamber casting their vote on changes to the rules.  Of course, the Republicans had been instructed to vote against the changes, but Reid's ambitions were defeated with Democratic votes.

What this really means is that we've been sold out.  What this really means is that the Senate has now fallen under the control of the same oligarchs who presently control the House.

This has happened after a majority of the ballots cast in the 2012 election were cast for Democratic candidates -- both in the House and in the Senate.

Republican Senate Minority Leader McConnell now remains in charge of the Senate.  He and his GOP cronies answer only to the oligarchs who finance their campaigns.  As common citizens, we should expect nothing from the Senate -- just like we should expect nothing from the oligarch controlled House.

 The Post Election Supreme Court

We have to comment on the Supreme Court even though the Justices were not subject to the electoral test like the Congress and the President.  The important factor for the Court comes later.  With several Justices reaching retirement age, the President will have an opportunity to nominate replacements.

During this process, the heavily soiled, reactionary Court majority appointed under the unelected autocracy of  George W. Bush can be replaced by more sober, more functional, judicial minds. 

However, any Supreme Court nominations made by the President will immediately fall into the maelstrom of the now non-representative Senate for confirmation.  Interestingly, those same Senate rules which prevented any change to the filibuster problem also happen to contain equally arcane elements with respect to arbitrary, secret blocks for such nominations.

Those "Senate rules" concerning Court nominations weren't changed, either.

Referring to the chart at the top of this post, we can see the possibility of the Senate simply not confirming any nomination should the oligarchs now issuing the orders there so decide.

It doesn't actually matter which name was on the ballot you voted for Senate.  The man in charge of the Senate remains the same as it was in the previous session, Mitch McConnell.  The Senate minority leader will remain in charge of the outcome of every bill.

In terms of the democracy, the Democratic Senators who failed to support Reid's rule changes would all, presumably,  claim to have voted based on their constituent interests.

The Post Election US Media

Like the Supreme Court, the US corporate media was also not subject to an election test in November, 2012.  However, the fundamental idea of the US "free press" is that, just as any other corporate enterprise, it is subject to a continual "market correction," that is, the idea that elements of the "free press" would have to compete with each other by offering competitive credibility.

For a "free press" enterprise to succeed in a capitalistic way, it must offer its consumers what they perceive to be credible, factual "press products."  At least, this was probably close to the original idea as it was trotted out in 1776.

The corporate media is no longer actually subject to this market correction because it is no longer faced with the necessity of competing for credibility.  Not surprisingly, the ownership of corporate US media is now limited to a mere handful of corporations, and those corporations clearly see no particular benefit in competing with each other for media credibility when their consumers have ceased demanding it.

This kind of comment is a common lament.  MeanMesa, however, is not convinced that these common complaints actually communicate the gravity of the destructive influence this exerts on the democracy.  Rather than having a few isolated peccadilloes of "over editorialized" reporting, we find a significant minority of the American electorate "living in another world" where they are constantly saturated with "corporate truth" in the place of this credibility.

In terms of similarities, we can recall the mass, voluntary civilian suicides which occurred on Saipan and Okinawa when US forces were capturing those islands.  The civilians had been saturated by Japanese propaganda for decades.  They had been told repeatedly that US soldiers and Marines would systematically murder them, rape the women and eat their children.

When faced with the immediate prospect of this actually happening, mothers holding their infants, young lovers in a last embrace and entire families holding each other's hands dutifully stepped off the cliffs to fall to their death.

This media saturation effort here has produced a myriad of open threats to kill the President or "escape" to another country should he be re-elected.  These are not fascinating exceptions.  Such thoughts have become the daily fare for millions of Americans.  There are no "correcting data" or "countering arguments."  The water in this saturating pool of media manipulation is calm, tepid and relentlessly wet.

The Post Election Strategy of the Oligarchs

This cannot not fairly be described as the strategy of Republicans.  Whatever "strategic capabilities" remaining in the remnant of the Republican Party have been entirely overwhelmed by the strategy of the oligarchs and corporatists which now control it.

The oligarchs learned a few things during the election.  Prior to November their deep cynicism allowed them to be convinced that the sheer persuasive weight of their media money would deliver the power they sought -- all this absent any particular element of policy or explanation.  Even on election night, these anti-democracy players remained, embarrassingly, under the thrall born and nurtured by exactly this cynicism.

The uninformed, illiterate and uninterested making up the GOP base took the bait just as expected, but the essentially uncontrollable remainder of the electorate were more interested in their personal living conditions.  The psych-handlers for the oligarchic think tanks had not anticipated this showing up on election day to nearly this extent.

The oligarchic strategy had been, actually, quite pragmatic.  Expecting the number of votes against their artificially profiled candidates to represent a smaller majority, they had carefully orchestrated every possible manner of election crime in the areas under their control, that is, in states where they controlled the entire state government.  The election results show us that they had under-anticipated the scale of the rejection of their candidates -- one which could have been mitigated by the electoral crimes.

It is not a mystery why the anti-democracy forces have concentrated their ambitions on the Republican base.  In a maneuver quite similar to the under principles of the prevailing religions, every fear and desire was exploited to prepare the narcotic arguments.  Racism, classism, effortless dreams of the ambition for wild success and incendiary propositions of humiliation inflicted at the hands the whatever caste was to be castigated were packed into the oligarch pitch.

These were precisely the mechanisms employed to propagate pseudo-religions such as modern Christianity and Islam.  This was not a coincidental, unanticipated, unexpected affinity.  It drew the "less than high school" Republican base eagerly into the vacuous ideology of the carefully groomed tea bags, one over spiced with the induced pain of a failed economy, the ghostly fear of sexual inadequacy compared to black men and the inebriating prospect of being elevated and respected, valid or not.

With the intentionally confusing fog of the campaign rhetoric now receding, we can easily isolate the post election posture of the oligarchs.

1. Austerity

The program has been a dismal failure everywhere it has been implemented.  It has effectively cratered the economy of the EU; it has deeply wounded the domestic economy, too.  Neither application has demonstrated any remedy for the Great Republican Recession of 2008.

2. Spending

The ready clue here is the incessant repetition of the meme from the think tanks: "We don't have a revenue problem. We have a spending problem."  Every Republican who gets close to a microphone comes up with this before anything else.

3. Wealth Redistribution

Don't be mistaken.  Austerity and spending cuts have everything to do with wealth redistribution and practically nothing to do with economic recovery.  We can add to the list the brazenly ideological spending cuts for things like abortion and, in the converse, spending increases for things like military procurement.

4. Tax Policy

The oligarchs know that if they cannot control the House, they can be hurt by what replaces their artificial majority.  The mood of the populus is to increase their taxes -- big time.  That same mood includes cutting their corporate subsidies -- big time. This goes with military spending, financial regulation, consumer protection, environmental protection, climate change mitigation and so on.  Every one of these will ultimately be paid for by money which is currently in the pockets of the oligarchs.

5. Permanently Redefined Conservatism

The traditional definitions of conservatism are useless to the oligarchic ambitions now. We see this in all sorts of cases, perhaps most notably, in the paradox between the image and reality of the alleged conservative paragon, Ronald Reagan.  While the idea of conservatism must be refined into a usable modern corollary, the oligarchs have hit the wall like obstacle of the basically total lack of education in their base.

This base could manage to claim a very fleeting view of traditional conservative ideas, but simply can't keep up with the task of understanding what they are supposed to understand now after things have changed now.  We see this in two important ways.

a. Conservative voices embarrass themselves with comments like the ones we heard about rape and abortions.

b. There is no real possibility for a coherent replacement for the traditional model, hence, no particular policy or platform -- just talking points.

6. Fear of Their Own Record

The modern Republicans are actually managing a remarkable game of "bait and switch."  They have clearly become infatuated with issues such a deficits, debts, international respect and the like. Yet, the exact policies they find most onerous in the 21st Century US government are precisely those which are attempting to repair damage inflicted by past Republicans.

The think tanks have warned their owners that this is, at best, a tenuous, temporary tactic for this very reason.  There is a constant possibility that some -- or many -- of the loyal hill billies in their base will, someday, realize all of this. The "distance" between the sign slogan complaints at a tea bag rally and the unfortunate reality of the last Republican President is not that great.

Unhappily, compared to this very utilitarian policy of denial for political and economic catastrophes, bigotry seems conveniently eternal.


Normally, someone visiting a blog and encountering this word as a topic would, perhaps, simply grumble and search for alternate reading somewhere else.  In defense of MeanMesa, consider the picture painted in the post above before you make that quick conclusion.

This is YOUR democracy being discussed here.

You may think MeanMesa's conclusions to be overly hyperbolic and tastelessly dramatic.  Yet, anyone who is so inclined is welcome to refute what has been presented here as fact.  In fact, this skepticism is encouraged.  This proposition is too serious to simply avoid it.

Further, if it is, in fact, too serious to be avoided, it is also too serious not to elicit corrective action.  Political action --  and, maybe, more than political action.

Whether you like to admit it or not, you depend on this democracy.  Everything about the life you anticipate living here depends on this democracy.  Your future will be defined by the politics, policies and decisions which derive from this democracy.

Enough said.

Sunday, January 20, 2013

New Mexico Windows & the New Mexico Legislature

About This Post

This is another MeanMesa post in the series about job creation and economy growth in New Mexico.  Some of the most recent previous posts on this subject can be found at these MeanMesa links:
It is also important to note that this post is actually intended to accomplish a few things.  Most importantly, it presents an action plan which it would be nice for the Round House to consider.  If, as a New Mexican, you think that some or all of the proposals might actually help the State's economy, take a minute and email a note to Santa Fe.

Second, it contains the rationale behind the MeanMesa proposal to get New Mexico rental owners to participate in the window renovation plan. This part of MeanMesa's proposal is an important one.  New Mexicans with higher incomes are doing well enough, but the "poverty part" of being the "poorest state in the union" extends for miles in every direction from the gated communities -- like tattered wall paper.

State legislatures in more prosperous places have to deal with "pockets" of poverty.  New Mexico has "pockets" where there isn't poverty.

One would assume that Santa Fe is eagerly awaiting some sort of plan to address this!  This post runs through exactly what the role of our State government would be if they really wanted to help.

 A Quick Look At Where We Are

The MeanMesa posting first listed among the links above contains a few direct quotes from the Governor.

Gov. Susana Martinez must have been listening. While addressing local chambers of commerce on Jan. 3, she rolled out her New Century Jobs Agenda that included what has been called a “single sales factor” that would only tax products and services sold within the state. And she outlined a plan to reduce corporate income taxes from 7.6 percent to 4.9 percent for companies generating more than $1 million in net income.

and there was this,

Other aspects of the governor’s jobs agenda include: $10 million to fund the Local Economic Development Act for recruiting companies to the state; $4.75 million for hiring and training new employees through the Job Training Incentive Program; refining the capital outlay process for state infrastructure projects; passage of an “informed consent law” for spacecraft manufacturers and supplies; and increased investment in the New Mexico MainStreet program to preserve downtown historical and cultural locations.

These are "schemes."

Just the kind of "supply side schemes" that ALEC really likes.  The kind of "schemes" ALEC doesn't mind "paying" for, either.

The "supply side" aspect is worth just a little more inspection here.  What the Governor has proposed with the one sided corporate income tax exposure "scheme," has everything to do with making it even cheaper and even more profitable for companies which re-locate to New Mexico. 

Ask yourself.  What does policy like this do for the entire State of New Mexico?  The answer is: "next to nothing" compared to the advantages it carves out for the businesses that won't have to pay State income tax on almost any of what they produce.

The twenty or forty jobs created when one of these re-locations takes place will  probably employ New Mexicans who already had jobs.  Further, these jobs will last until the next state somewhere else offers a larger bribe to re-locate there.

There are two million people living here, and lots of them need jobs.  It's almost inconceivable that schemes like this can even hit the table in our State legislature.  It's like no one in the Round House can so much as think of anything else.

In the first quote, the Governor wants to reduce taxes by excluding any sales made to buyers outside of the state from New Mexico State [Corporate] income taxes.  But wait.  The things which are being produced in New Mexico can, basically, not be sold in New Mexico anyway  -- the poorest state in the union -- because New Mexicans don't have the discretionary wealth to buy expensive German solar panels, space trips, private jets or pricey computer gizmos.

Then in her second quote, the Governor is trotting out another $20 + Mn for "job training" and "bribing" out of state businesses to relocate here.  Maybe ideas like this would have sounded a little better if we had not already practically bankrupted ourselves trying them over and over already.

$20 Mn worth of State of New Mexico funding -- or even loan guarantees -- would pay for a pilot plant to produce windows.

Does this mean that we have to just keep trying these schemes as long as there is a dime left in the Treasury for another "tax expenditure"  financed incentive?  We really need to move on from the idea that New Mexico is at the brink of becoming Silicon Valley if we just throw enough State money at the transformation.

From the previous post on this subject, we can look again at exactly what is being proposed here.

The MeanMesa Windows Modernization Proposal

The over all goal of the proposal is to replace the inefficient casement windows which saturate every corner of our State with very affordable, modern insulated windows.  The replacement windows would be manufactured inside New Mexico.  The financing necessary for the purchase the new windows would be provided by State of New Mexico programs.  The installation labor would be performed exclusively by New Mexicans, trained, bonded and certified to do this work.  Both home owners and renters -- everyone who pays a monthly heating bill -- would benefit from the program.

Of course, that "benefit" that we're looking for here is an increase in discretionary wealth, that is, more money in New Mexican pockets to buy things.  This is absolutely the founding principle of what we have described as a demand economy.  When the discretionary wealth increases, well, " floats all boats."

So, where do we start?

Because it's very unlikely that the State legislature would be interested in managing something like this in the first place, the job will almost certainly be  handed off to a State "enterprise" management commission responsible for setting it, starting the process and running it once it starts.  The legislature might be willing to be responsible for some kind of "over sight" so long as the accounts arrive in Santa Fe in a nice, clean package.

We'll need to match up the actual work with folks who are competent to do it.  This is not a theoretical proposal.  With respect to schedule, this same Governor should appear on local television still in this term -- hopefully her last -- with the first window emerging from the new factory in New Mexico.

The Legislature's Part

 Of course most New Mexicans reading this post will assume that our State Legislature will do nothing.  The Governor will be too busy chasing after a electronic umbrella maker who is looking for a totally unregulated "profit paradise" where wages are as low as China, relocation incentives are high and folks will "look the other way" while his plant's effluent dribbles into the river.

All this brings up what might be one of the first things on the Legislature's "to do" list.

The State needs to establish a state "enterprise commission" to not only watch out for our state by watching over some of the relocated businesses which are already here, but to protect new enterprises such as the windows project from New Mexico's "natural predators" which have traditionally been able to crush dreams just as handily as, say, the US Senate.

1. Drunk, corrupt or incompetent locals who have no interest in an enterprise's success, and see it only as an opportunity for mismanagement, misdirection and theft.

2.  State Legislative ideologues -- such as ALEC "cross interest" politicians -- who will eagerly wreck even a sunny afternoon if it means a political advantage.

3. Ruthless out of state competitors who are equally eager to lay waste to an enterprise in New Mexico, take whatever loot breaks away easily -- usually complicit with someone in Santa Fe -- and leave with the cash.

It's time for New Mexico to quit being so surprised when this happens here, over and over.  Realistically planning for it can make all the difference in the world.

The necessity of improving the individual economic status of individual New Mexicans is not theoretical.  Sure, we've tried some things that didn't particularly work in the past, but that is no reason to allow the prospects for the task to grow an exaggerated difficulty or even slip into the realm of "impossibilities."

Let's look at the chart of legislative activities.

1.  Conduct the preliminary research for the pilot program:
  • plant site options
  • window design
  • area for pilot program window installation
  • financing criteria
  • program cost estimates

Site options:  The legislature has already constructed and paid for a fair number of unused buildings across the state.  Commercial real estate vacancies in Albuquerque -- including a few dreams about the use of the old rail way terminal -- are at an all time high in Albuquerque.  MeanMesa thinks the pilot program should probably go in somewhere which currently has a crippling unemployment problem.  There's no reason to wait to attack the problem.

Window design:  Low cost, high efficiency, cheap installation are all high priorities.  A window factory is nothing remotely similar to a computer chip manufacturing facility.  The window design could provide a good engineering contest for the technical universities the State supports.  The prize could be a scholarship.

[MeanMesa will have more designs to be engineered -- coming in later posts.]

Pilot Program Installation:  The pilot program is just that.  By limiting the region of the state which will receive the first windows, much of the transportation and installation labor issues will be more manageable. The experience derived from the pilot program's first installation phase will be invaluable.

Financing Offer: The  State's "enterprise management" entity can respond to unanticipated difficulties, mistakes and innovation advantages.  The pilot program installation will also be a good opportunity to work out the details of credit qualification, financing and other, business issues.

Cost Estimates:  Of course there will be a projected cost estimate for the pilot project along with a preliminary estimates for the cost of the project once it enters its matured state. The costs for manufacturing windows can be fairly well contained, but installation costs may be another case.

In any event, the actual costs for the pilot project should provide good data for the overall cost of the program once it is fully under way.

2. Write legislation to start the windows pilot project and fund it

Santa Fe wrote legislation to fund the New Mexico Space Port for $210 Mn.  That "enterprise" is now teetering at the edge of becoming the equivalent of a New Mexico Afghanistan.  The local news last night reported that the subsidized value of the facility investment which could be recouped in case of the project's failure would be worth around $3 Mn if the current trends continue.

With this as a preface, MeanMesa will be interested in hearing Santa Fe's arguments that the windows pilot project -- or at the very least, something similar to it -- is not needed, too expensive, too complicated or simply can't be attempted.

The space port provides around 60 jobs. Most of these employees would have been employed even if the space port had never been built. Even in the reduced scope of the windows pilot project there would be hundreds of jobs.  Many of these employees would have been unemployed without the windows project employment.

The manufacturing and installation work of the windows project can be located where the jobs are needed most and where the windows are needed most.

3. Set up a bi-partisan oversight committee to monitor project schedule and costs

First, there are no parts of the windows proposal which cannot be entirely transparent.  There are no convenient niches for technical secrets, financing secrets or political secrets.

Second, the folks in the Round House have to actually be capable of managing something.  This is not an unfair expectation.  MeanMesa doesn't even see the possible necessity of consultants for this mission.  New Mexicans have not had the best results from legislation which depended on consultant services.  Public service responsibilities and loyalty seem to vaporize somewhere "down the hall" in the consulting company offices.

4. Establish pilot program landmarks to verify project progress
5. Establish regular reports to New Mexicans about the project's progress
6. Set up an educational program to completely explain the project to citizens

Program transparency with respect to both State policy and public interest needs a bit of rethinking here in New Mexico. In the past a theoretical trail of data which could be followed to finally reveal the facts has served as "transparency."  The predictable result is that common citizens find that they know less and less of the actual process under way in Santa Fe.

The results bring three dilemmas.  First, the frustration with the difficulty of establishing good information about the actions of State government leads to a stoic cynicism.  New Mexicans simply, and perhaps even somewhat understandably, "shut down."  What goes on in Santa Fe stays in Santa Fe.

Second, as citizen interest diminishes, citizen over sight also suffers.  This presents the less than entirely honorable folks in the State government with the cover needed for all sorts of corruption.  This claim could be more easily discharged as a simple exaggeration if we had not seen so many repeated examples.

Third, even when the efforts made in Santa Fe to govern the state fail miserably, the legitimate of outrage among voters has long since been exhausted.  The Round House should be filled with a continuing presence of voter outrage, but the voters have, instead, adopted a level of tacit acceptance.

The missing idea is not all that complicated.  Citizen interest must be courted.  The information to form a solid opinion about State policy still needs to be "marketed."  MeanMesa isn't entirely sure whether or not this is a foundational under pinning of the democracy idea, but, facing facts, it seems necessary.

Part of the legislative role in the windows project is to not only present the entire program to New Mexicans, but to also keep everyone informed along the way.  As mentioned before, there is nothing about this proposal which can be served by secrecy or reasonably be obscured by being deemed as "too sophisticated" for general consumption.

7. Legislative incentives for land lords to participate in the program

There are, to make things simple, three basic groups of New Mexicans as we consider the windows project.

a.] Home owners who already have installed high end thermal windows
b.] Home owners  who are currently unable to afford to install high end thermal windows
c.] Renters living in rental units which need efficient windows but with land lords who have no incentive to install them

While both the second and third groups comprise the target market locations for the project, the "incentive question" really affects the third group.  In terms of spurring growth in the state economy by increasing discretionary wealth by lowering non-discretionary spending on home heating, this third group is what we can call a "gold mine."

Any reductions in heating bills will immediately leave more money in the pockets of this group -- money which we know will be spent.  When this happens, demand increases.  We already know that the jobs the windows project will introduce will help the economy, but when renters have lower heating bills, that will increase the economy even more. When demand increases, the economy grows.

We clearly need to "break the habit" of distributing thermal efficiency subsidies exclusively to home owners.  The real pay back is waiting when we can offer these advantages to renters.

Let's just allow this narrative to enter the realm of imagination.  Of course, there's legislative work to do, but instead of threading through all of that, we can envision what things would be like after it was done.

If you are a land lord, you would have hired a thermal imaging service to make winter time infra red pictures of the apartments you want to rent.  These would provide the information needed to calculate the over all "R" factor -- the apartment's thermal efficiency based on the heat loss shown in the survey photograph.

When you show your apartment to a potential renter, you could then tell that renter what this "R" rating was.  While the renter would naturally be interested in the amount of rent for the apartment, he would also be quite interested in the apartment's insulation efficiency.  The information about the "R" factor would be a good way to estimate how much the heating bill was going to run during the winter.

While MeanMesa is sure that the ALEC "free market" influence in the Round House would prevent this from ever becoming an actual law, as a land lord, you would realize that the other apartments your potential renter was considering were, most likely, offering this information.

The apartment with good thermal insulation -- and, consequently, lower heating bills -- would be chosen even if the rent were the same.  The way things are now, land lords don't have to compete with the heating efficiency of the apartments they offer.  In the terms understandable to the "free enterprisers," this means that renters enjoy no advantage from competition on this basis.  

It means that there is very little possibility for one of the "free enterprisers'" favorite things -- a "market correction."

"Hello.  We were looking at the apartment you advertised.  Can you tell us the unit's 'R' factor please?"

"I ain't lettin' no big government thugs tell me what I gotta' do with my own property."

"Oh, I see.  Good bye."

If the land lord winds up with crappy thermal efficiency for his apartments, he's not simply stuck.  The Windows Modernization Program will include State financing or loan guarantees for this land lord to improve the "R" factors of his rental units by installing efficient windows made right here in New Mexico.

Hmmm.  Window manufacturing jobs.  Window installation jobs. Window and supply transportation jobs.  Manufacturing facility construction and maintenance jobs.  Financing access jobs. Infra red photography jobs.  Informed renters.  Increased discretionary wealth.  More demand.  Growing economy.

8. Lay out full scale windows modernization program

With a pilot project accomplished, and the inevitable challenges addressed and solved, the path forward to a full scale project becomes quite manageable.  All the "moving parts" of this program won't magically appear over night, but none of those "moving parts" are imponderables.  They are all quite straight forward.

They can all be managed.

This means that whatever might "come up" during the process can be handled, fixed, adjusted, replaced, rethought and so on.  All we need is the will to get busy and start solving our economic "poverty" problem.

Stay Tuned!  There's More To Come

While this post is primarily about the legislative leadership we will need, the next MeanMesa post in this series will be all about what will happen "on the ground."

We hope you're not getting tired of proposals.  There are more after the windows modernization program.

Thursday, January 17, 2013

New Mexico: Land of Financial Expertise

 New Mexico's Demand Economy

Given the content of this posting, it may be a bit of a "heavy lift" to connect the mismanagement of the New Mexico Finance Authority to the creation of jobs, pay checks and demand for the growth of New Mexico's economy. However, this is precisely how this works.

The Finance Authority is charged with providing the money needed for all sorts of necessary projects in the State. The Authority is responsible for selling bonds in order to meet these needs. We New Mexicans pay interest on those bonds, making them a good investment.

The basic "sales pitch" might run something like this: "Buy our bonds. They are guaranteed by the State of New Mexico, so you'll never lose your money. And, by the way, we know all about how to run an operation like this because we are experts."

MeanMesa selected the following reporting on this subject from Bloomberg News, a fairly respectable, East coast business site. However, there is a small point to be made before you read through the article.

The reference to Standard and Poors rating should really be taken in a broader context. Although S&P is a traditional bulwark for economic forecasting which is often cited in such articles, the firm has a rather soiled past after its shenanigans in the last few years. Under more than a few layers of "invisible ownership," S&P, it turns out, permanently exists with a few intermediary holding companies under the thumb of Mitt Romney and others like him.

Of course, MeanMesa has posted on this before. Here's the link: MeanMesa: A Standard and Poors Primer ] We'll have a look at the Bloomberg report, then look for a few conclusions.


[Read the original article here. ]

New Mexico Scandal Cancels Bond Sales
as Cities Borrow Elsewhere
By Amanda J. Crawford 08-22-2012
[Links in the article remain enabled.]

Cities and school districts in New Mexico may face higher borrowing costs and have to scale back or delay projects after a scandal involving a phony audit halted bond sales by the state lending agency. 

The New Mexico Finance Authority has used its favorable ratings to sell securities for billions of dollars in public public works over the past two decades. It canceled $145 million in bond issues and stopped funding larger loan requests after officials discovered its 2011 financial audit had been falsified said the agency's chief financial strategist, Michael Zavelle. 

The authority's chief operating officer and former controller were arrested earlier this month. Moody’s Investors Service and Standard and Poor’s have put the agency’s ratings under review for possible downgrade as investigations continue in New Mexico, the state with the nation’s worst-performing economy. Local governments are trying to secure alternative financing for projects ranging from a dam in the small city of Las Vegas to infrastructure for a delayed housing development in Albuquerque

“Clearly, this has not benefited anyone, and I think many entities across the state are in some way negatively impacted,” Zavelle said. “There is a broader impact: when you see these kinds of things coming out of the state of New Mexico, people wonder about how the whole state is run.”

Recovery Lags

The scandal at the lending agency, which was at the center of a pay-to-play investigation in 2008 involving then-Governor Bill Richardson, comes as New Mexico’s economic recovery lags behind the rest of the nation. Over the past year, New Mexico’s economy ranked the worst of the 50 states, according to the Bloomberg Economic Evaluation of States. There has been little job growth in New Mexico, where almost 51,000 jobs were shed from the peak in April 2008 to September 2010. It has added back only 2,800 jobs. 

Employment losses in the construction sector have been particularly severe. From June 2006 to December 2011, nearly one-third of construction workers lost their jobs. The total number of people in New Mexico employed in construction declined by 18,800 over this period, and the state has since only added back 2,000 of these jobs. 

“This is not good news for the construction sector, particularly in some of the smaller communities,” said Jeffrey Mitchell, senior research scientist at the Bureau of Business and Economic Research at the University of New Mexico. “Economically, we are looking at very small communities where individual projects can be relatively small by other standards but can be impactful. It is going to slow and postpone the kind of projects that are really needed right now.”

Poverty Level

The per capita income in New Mexico was $33,368 in 2010, one of the lowest in the nation, ranking it 46th out of 50 states. And more residents live below the poverty level -- 18.4 percent in New Mexico, compared to 13.8 percent nationally, according to the U.S. Census Bureau. 

Cities and other entities that planned to finance projects through the agency are weighing their options and still trying to figure out what to do, said William Fulginiti, executive director of the New Mexico Municipal League, who also serves on the NMFA board. Some may try to wait until the finance authority can go to the bond market and start funding larger projects again -- which Zavelle said the finance authority hopes could happen as early as next spring, after new audits are completed. If they have projects that can’t wait, governments will look for their own financing, potentially taking a hit on cost, Fulginiti said.

‘More Money’

“My fear is that it is going to cost them more money,” Fulginiti said. “And the fact that it will cost them more money may mean lesser projects or lesser number of projects. We’re worried about that.” 

Fulginiti said he knows of one city considering a loan with an interest rate almost double what it was expecting from the NMFA, which has a AAA rating from S&P and Aa1 rating from Moody’s on its senior liens. Both agencies are weighing a downgrade, which could mean higher borrowing costs in the future.

James Breeding, an S&P credit analyst in Dallas, said the rating company is awaiting the results of a forensic audit now underway and other investigations to see if there are findings, such as a systemic lack of financial oversight, that could warrant a downgrade. 

The scandal at the agency came to light in July after the state auditor flagged officials to a missing audit. Gregory Campbell, the agency’s former controller, and John Duff, the agency’s current chief operating officer who was Campbell’s supervisor, were arrested Aug. 8 on allegations they provided false information to potential bond investors.

Criminal Charges

Campbell, 52, is charged with forgery, securities fraud, racketeering and conspiracy, according to a criminal complaint filed Aug. 7 in New Mexico state court in Santa Fe. Duff, 70, is charged as an accessory to securities fraud and racketeering as well as with conspiracy. 

According to the complaint, Campbell admitted he forged the agency’s 2011 audit report by copying and pasting the letterhead and signatures from the 2010 audit report. The phony audit was part of the official statement for a $24.3 million bond issue in March. Campbell is also accused of, with the knowledge and permission of Duff, “cooking the books” by concealing a loss of $40 million in agency revenue in 2010 and 2011, according to the complaint. 

David Freedman, a lawyer for Duff, didn’t return a call for comment on the allegations. Campbell doesn’t have a lawyer, according to S.U. Mahesh, a spokesman for the New Mexico Regulation and Licensing Department, which brought the complaint. A call to a number listed for Campbell in Albuquerque wasn’t returned. No arraignment has been scheduled yet, Mahesh said.

Earlier Scandal

The scandal isn’t the first to embroil the NMFA. In 2008, it was at the center of an investigation into whether Beverly Hills, California, financial adviser CDR Financial Products won business from the agency after making contributions to Richardson’s political committees. The Justice Department didn’t file criminal charges against Richardson after the year-long probe by a federal grand jury, which prompted the Democrat to withdraw from consideration to be President Barack Obama’s commerce secretary.

‘Muted Reaction’

So far, the current scandal is eliciting “muted reaction” in the market, said Josh Gonze, portfolio manager at Thornburg Investment Management in Santa Fe, which oversees $7 billion in municipal bonds. Investors are demanding 0.30 to 0.40 percentage point of additional yield for NMFA bonds. The debt typically traded at 0.30 percentage point more than top-rated bond and now it’s trading at 0.60 to 0.70 percentage point more, he said. 

“It’s one of those issues where there’s uncertainty regarding how seriously to take this,” Gonze said. 

The finance authority suspended loans above $5 million earlier this month, allowing it to use $25 million in cash on hand to continue to help towns buy fire equipment and finance other small projects, Zavelle said. Still, those projects will have to be weighed carefully or “it is quite possible we could be out of money in four months,” he said.

Among more than $294 million in larger projects on the agency’s radar that were put on hold was a $27 million project to build infrastructure for a 500-lot home development that had already been stalled for a decade in Albuquerque. Michael Riordan, the director for municipal development, said the city sought out private financing and was surprised to get an offer with terms similar to what they could get from the finance authority.

Moving Forward

Smaller cities don’t expect to be so lucky. Dan Dible, the city manager of Gallup in the western part of the state, said his city is moving forward with refunding two bond issues of more than $20 million each that it had hoped to refinance through the NMFA. While the city won’t get as good of a rate, it can’t afford to wait, he said. 

“We know we won’t do as well,” Dible said. “We don’t want to wait out NMFA because we have no idea how long it is going to take and this market is so good we are going to go after it now.” 

In Las Vegas, New Mexico, a city of 14,000 northeast of Santa Fe, city manager Timothy Dodge said it may have no choice but to pay a higher interest rate to reconstruct a leaking dam. Though construction is at least six months out, the city is weighing other options, including working directly with private banks. That will likely mean higher interest rates than going through the finance authority, he said. 

“The finance authority has always been an asset to local government here in New Mexico,” Dodge said. “It is going to impact the state.”

Impacting the State

Naturally, when the in state infrastructure projects like the ones mentioned in the article are actually contracted to New Mexico companies, we see an immediate boost in employment. When these jobs are contracted to out of state companies -- which is, sadly, the habit of the current bunch in the Round House and the Governor's Office -- our taxes leave New Mexico right away.

After all, Texas is just across the border.  And, there's more Texas in Santa Fe than we'd like to think.

In fact, given the current climate in our state legislature with ALEC looters hiding behind every bill that can ever manage to finally escape the Round House,  most New Mexicans aren't even sure that the infrastructure projects we are struggling to finance even help the state's economy.  Just about every iota of trust has long ago been exchanged in a quick profit scheme.

This disaster in the article is far from the only episode undercutting New Mexicans' confidence in Santa Fe.  We let convicted murderers out of prison -- not once, but twice.  We have State and local law enforcement employees dropping like flies only to reappear in the next county or city. 

Now, when we should be spending every breathing moment trying to do something about the crushing State-wide poverty, we are focused on tormenting undocumented immigrants by extracting their drivers' licenses.

All the players in this scam are counting on New Mexicans to do their part.  "Their part?"  Sure.  Our part is to not notice any of this.

It turns out that we were, actually, able to "notice it a little less" for a while, but only as long as the outrages didn't scream at us quite as loudly as this one does.

This one is a screamer.

The "NMW - New Mexico Works" logo at the top of this post is not an oversight.  If we intend to direct what money we have left toward fixing the State's economy, we have to groan when we see our plans undercut again and again by this kind of crookery.  As New Mexicans, we really need to quit hiring one government after another to keep us flat on our backs while we continue to take them seriously and pat them on their backs.

Sunday, January 13, 2013

NM Jobs: It's Not Working! Do It Some More!

Another Republican Who Still Doesn't Know That
 They Lost the Election
Hmmm.  Rio Rancho or the Round House?

Okay.  The 2012 ballot results are just "chuck full of clues" which might shed light on what folks are thinking.  If we were to form a rough, conjectural estimate, hypothetically of course, of what voters were not thinking, it might include some of this stuff.

Voters are really tired of corporations telling them that if they'd just lower taxes, the economy would get better, 

Heh heh, that "they would make the economy better."

Voters are also getting tired of Republican politicians telling them things like this just because a corporate "contributor" said it.

Voters are exhausted after surviving a massive tax cutting scam that left a handful of corporatists and oligarchs knee deep in dough while the rest of the economy collapsed -- while the personal wealth of voters plummeted 40% in a matter of weeks.

Now, while the hill billies and bigots who comprise the Republican base might be willing to go along with this gang rape for another decade, most normal folks have had it.  We, "normal folks" have pretty much lost interest in the heavily soiled tea bag ideology of talking points, implied threats and brazenly opportunistic politics.  Our problem, most likely, is that we keep winding up being the "opportunity."

MeanMesa is not one of the three dozen New Mexicans who actually reads the Rio Rancho Observer, so we have to thank Dave, one of our regular visitors, who sent this along.

This little jewel fits right in with MeanMesa's series on NMW - New Mexico Works. [Read the article here. ]

"Wean us from the federal government trough."
You've got to be kidding ... right?

Rio Rancho Observer
Our View: Support Job Plan
January 13, 2013
[no by line]

During the Rio Rancho Economic Development Corporation’s annual meeting in October, Intel Vice President of Technology and Manufacturing David Baglee said New Mexico’s corporate tax structure is at a disadvantage compared to neighboring states.

The current corporate income tax formula factors in payroll, property and in-state sales to determine net profit subject to taxation. Baglee suggested that for the state to become more competitive, it should just tax in-state sales.

Gov. Susana Martinez must have been listening. While addressing local chambers of commerce on Jan. 3, she rolled out her New Century Jobs Agenda that included what has been called a “single sales factor” that would only tax products and services sold within the state. And she outlined a plan to reduce corporate income taxes from 7.6 percent to 4.9 percent for companies generating more than $1 million in net income.

In her speech, Martinez pointed out that because the state depends on federal tax dollars, it will get hit disproportionately by cuts in federal spending. By making the tax structure more corporate-friendly, the state can begin to transition its economy from a dependency on government funding to job-creating businesses.

While any kind of tax cut will affect the amount of revenue the state collects, the long-term advantage of making the corporate rates competitive with surrounding states will encourage larger corporations like Intel to make long-term investments in the state. Martinez suggested that the new rates should be implemented during a four-year period.

Other aspects of the governor’s jobs agenda include: $10 million to fund the Local Economic Development Act for recruiting companies to the state; $4.75 million for hiring and training new employees through the Job Training Incentive Program; refining the capital outlay process for state infrastructure projects; passage of an “informed consent law” for spacecraft manufacturers and supplies; and increased investment in the New Mexico MainStreet program to preserve downtown historical and cultural locations.

When our legislators convene at the Roundhouse this week, they should help move Martinez’s job agenda forward. These are programs that we can all benefit from, and they ensure that companies such as Intel continue to wean us from the federal government trough.

We've Really, Really, Really Had Enough

MeanMesa encourages all our visitors to take a look at our NMW series of posts on real economic growth for our state.  We have been through these thinly disguised schemes enough times already to be intimately familiar with this latest pitch from some ALEC parasite.  You know, "intimately familiar" like a rape victim is "intimately familiar."

Come on, Governor.  We're already walking bow legged.

Lowering corporate tax rates is not what will fix the "poorest state in the union."  If you want to be Governor, you'll have to actually think. 


Other MeanMesa posts on this subject: