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Home / Articles / News / Features /  Open Season
09-14-11-politics-cover

Open Season

A look at the people, power and politics to watch in 2012

September 14, 2011, 12:00 am
On Sept. 6, in advance of President Barack Obama’s much-trumpeted jobs speech, 2012 presidential hopeful Mitt Romney released a sweeping, 160-plus-page plan for curing the country’s increasingly chronic unemployment. In spite of its grandiose claims, colorful charts and campaign-friendly sound bites, Romney’s proposal has one glaring flaw: It offers precious little in the way of real, actionable solutions. (Robert Reich, the labor secretary under Bill Clinton, called it “unremarkable, to say the least.”)

Instead, Romney’s plan contains the usual partisan rhetoric about government deficits, job-killing regulation and the evils of taxes—all common refrains during Susana Martinez’ 2010 gubernatorial campaign, and also likely talking points in 2012.

Such posturing is emblematic of what Jeff Mitchell, a senior research scientist at the University of New Mexico’s Bureau of Business and Economic Research, considers an increasingly misdirected economic debate.

“The information most people are getting about what’s going on is really, really skewed and unreliable,” Mitchell tells SFR.

Take, for instance, the fight over raising the US debt ceiling.

“There’s no doubt that government deficits are a problem in the very long term; however, I don’t find it credible that cutting government deficits will improve the economy in the short term,” Mitchell says. The main argument against excessive public sector borrowing, he explains, is that it pushes up interest rates. But that’s not happening; US interest rates are historically low across the board, Mitchell says.

If cutting government borrowing does little to help the economy, cutting government spending—to the tune of the approximately $2.4 trillion over 10 years stipulated in the recent debt compromise—has an even more dire effect.

Case in point: Even as private-sector employment finally begins to pick up, public sector cuts all but offset the improvement.

“What’s really unfolding here is that cuts in the government sector take away much of the gains in the private sector,” Mitchell says. “Government represents, on a national level, almost 25 percent of the economy—so if you have cuts, that takes the wind out of the entire economy.”

And while the notion of cushy government jobs negotiated by powerful unions is political anathema, Mitchell says cuts to government spending can have a much broader impact.

“If you start cutting Medicaid payments [and] grants to state and local government, that means there’s less demand from the public sector for all kinds of private-sector goods,” he explains. “The impact of public sector cuts goes way beyond government employment.”

In New Mexico, as of July, the seasonally adjusted unemployment rate was 6.7 percent—far below the national rate of 9.1 percent. (In January 2010, when Martinez took office, New Mexico’s rate was 8.1 percent, compared to a national rate of 9.7 percent.)

But Mitchell cautions against reading too much optimism into those statistics. New Mexico still isn’t creating jobs, he says, and most unemployment figures don’t take into account people who have stopped looking for jobs—those who have been unemployed for so long that they’ve simply given up.

Santa Fe’s employment numbers are equally unremarkable.

“We gained 2,000 jobs last year—but we also lost another 2,000 jobs, so we’re kind of running in place,” Mayor David Coss tells SFR.

Coss offers a perspective sharply opposed to the anti-government refrain of the tea party: that government can and should play a role in reviving the US economy. To that end, he’s endorsed the US Conference of Mayors’ jobs plan—one that Coss says will cost roughly as much as Obama’s $447 billion job stimulus package—and is due to introduce a $50 million bond issue on Sept. 14.

“I feel like I’m in pretty good sync with mayors around the country who are calling for investment now,” Coss says. “We can cut our way back to third-world status if we keep on going…But I’m not a Republican; I’m not a tea party guy; and I believe that government has a role in making sure the community has a strong economy. I just think: no investment, no future.”

The investment, he says, involves approximately $12 million in road and infrastructure maintenance, a possible $3 million project to establish citywide broadband service, affordable housing and renewable energy projects, and public transportation upgrades. Coss says the City Council and the public will have approximately two months to discuss the bond proposal before the November deadline required to put it on the March 2012 city election ballot.

But while $20 million of the total bond funding could come from the usual source—gross receipts taxes—at least a portion of the rest will likely require property tax increases. Coss knows the political price of raising taxes, but in his view, it’s worth the battle.

“We have great libraries, great recreation facilities, pretty good parks and pretty good police and fire, and it makes us a good place to live,” Coss says. “The rhetoric is, ‘We don’t want to pay taxes!’ and ‘This government’s too much government’—but try and cut it and see what happens, because it does make it great to live in this city.”


Blocked Memory, The past and future legacy of perhaps the worst public official in modern New Mexico history, by Dave Maass


Twitterpated, How New Mexico politicians use Twitter, by Wren Abbott


In With the New, City Council hopefuls challenge the status quo, by Joey Peters


Primary School, Almost everything is up for grabs in the 2012 primary, by Gwyneth Doland


How to Background a Candidate, SFR’s do-it-yourself guide to muckraking, By Alexa Schirtzinger

 

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