SFR’s current cover story on economic inequality has been bouncing around the econoblogosphere. It’s also getting some attention in the Roundhouse. Apparently, New Mexico Lt. Gov. candidate and state Sen. Jerry Ortiz y Pino just plugged the story in a budget hearing. That’s according to the New Mexico Independent’s liveblog.

Here’s a visual appendix to the story that lawmakers might find useful. SFR made the following color-coded charts using Internal Revenue Service data for the 2007 tax year. The first shows that New Mexico is a solidly working-class state, with only a sliver of the population claiming even moderate wealth.

Approximately 18,500 New Mexicans reported incomes over $200,000, versus 719,200 who reported making less than $50,000.

Continue reading »

Just before the 2010 legislative session began, former New Mexico Gov. Gary Johnson was standing on the corner of Old Santa Fe Trail and Paseo de Peralta in the snow, wearing a parka that looked thick enough for Everest. (Oh, wait…)

Johnson and Republican gubernatorial hopeful Doug Turner were there to protest new taxes when SFR (clad in no such parka) caught up with them.

Continue reading »

Interesting tidbits keep turning up in the Thornburg Mortgage bankruptcy case, one of the largest in US history.

Court documents show that in October, the company, now known as TMST, had $24 million in the bank (or rather, banks—foremost among them being New Mexico Bank & Trust). That month alone, TMST made a gross profit of $2.2 million from servicing mortgages—and has made $19.9 million since filing for bankruptcy in May. After legal fees and “general and administrative” costs, TMST has netted $816,773 since the bankruptcy. Of course, all that belongs to its creditors.

The case is also shedding light on what kind of tax burden one of Santa Fe’s largest private employers faces, or rather, doesn’t.

Since filing for bankruptcy, the company has paid a $107,850 in combined state and federal taxes—or 13 percent of its net profit in that time. For comparison’s sake, check out the federal income tax brackets. A married couple making the median income in Santa Fe is going to pay 15 percent. Such a couple is likely to pay property taxes, as well—unlike TMST, which pays no property taxes on its corporate HQ, thanks to a clever deal with the city of Santa Fe.

Click on the image below for a breakdown of TMST’s tax payments.

Note that TMST, which laid off 130 workers in April and more since, has paid all of $973 in unemployment taxes in the months since its bankruptcy. Two years ago, Gov. Bill Richardson—who has received many thousands in campaign contributions from company founder Garrett Thornburg over the years—signed into law a bill that cut employer unemployment tax payments to the lowest rate allowed by federal law, saving corporations an estimated $26 million in 2008.

More on Thornburg after the cut.

Continue reading »

The New Mexico Business Weekly republished a Wal-Mart press release this afternoon:

The Walmart Foundation is giving $75,000 in academic scholarships to 25 college-bound students in New Mexico.
Each student will receive a $3,000 Sam Walton Community Scholarship for the 2009-10 academic year.
The funds are a slice of $8 million that the Walmart Foundation is giving nationally to students for college.

Those scholarships should make everyone feel better about the $11.6 million in state corporate income taxes the company tried to dodge by setting up bogus shell companies and paying itself rent.
Thanks, Wal-Mart, for kicking in 0.00056 percent of your annual profit toward the cause of higher education for New Mexico’s young men and women. At that rate, we’ll restore some balance to this economy by the time their great-great-grandchildren get out of debtors’ prison.

From MSNBC.com and Moody’s Economy.com, a website by the same folks who helped bring you the bogus credit ratings behind the subprime mortgage crash, now comes the “adversity index,” a nationwide data-mash of cities that are better off and worse off in the recession.

Readers will be pleased to learn that Santa Fe, according to this 20,000-mile analysis, is a “recession-resistant area.”

Now, that has been the case in past recessions—and so far, in this one, this city has held out better than many others.

But.

There’s a big but. And it has to do with the rationale for putting Santa Fe on that list in the first place. Here’s what Moody’s posits as our relative strengths and weaknesses.

Strengths
* Well-educated workforce.
* Above average household income.
* Long-term employment growth is relatively stable.

Weaknesses
* High house prices have deterred in-migration in recent years.
* Relatively high unit labor costs.
* Nearby research labs are susceptible to federal defense-related budget reductions in coming years.

Santa Fe benefits from a “well-educated workforce”? Where did they come up with that? Maybe they mean the transplant retirees with ranch homes who graduated Princeton back before it let women in.

As for that “above average household income”—well, it depends how you figure the average. And in what part of town you look.

As for Santa Fe’s “weaknesses,” Moody’s doesn’t like our “relatively high unit labor costs.” That would be the “living wage,” folks. According to these jackasses, it’s bad that a motel cleaning lady with two kids can make nearly $10 an hour, instead of just over $7.

Apparently, Santa Fe makes the “recession-resistant” cut because it’s a “military center,” like many other cities on the list. Actually, there’s a couple other cities that would count as New Mexico’s military centers, but not Santa Fe. This town is all state and local government, and tourism. Tourism goes down, the government runs short of cash, the local infrastructure deteriorates and then nobody wants to live here.

This package looks like an example of what happens when journalists let numbers overwhelm the story—it comes off as somewhat detached from reality. For instance, Bend, Oregon is on the recession-resistant list. That town was just featured on NPR, in a story titled, “Bend’s Highflying Economy Takes A Nose Dive.” Unlike this MSNBC-Moody’s package, the NPR story actually interviewed people in Bend.

“Want to live in a sunny town that’s immune from recession?” the story begins. Then try a couple of southeastern military base hellholes, or a sprawling area in rural Washington “that will pay glowing dividends for thousands of years: nuclear waste from the Manhattan Project and the Cold War.”

Oh. Great! Nuclear waste will save us from breadlines. Maybe Santa Fe should just move to Los Alamos.

Bill Dedman, whose byline tops this package, has a pretty top-notch reputation among investigative reporters. And he acknowledges—even in the story’s headline—that nuclear waste and foreign wars are not wise pillars for economic sustainability. But he concludes that Rochester, Minnesota, home of the Mayo Clinic, has an economy to “envy”—as long as health care spending remains high.

That’s like saying as long as we maintain the status quo in our wasteful, bloated and broken private health care system—a system that sucks a massive amount of money out of the economy while providing subpar service those lucky enough to have health insurance—then some people in one town in Minnesota will be OK.

Instead of slavishly following Moody’s flawed measures of economic health, maybe we should take a tip from Bhutan. There’s more to life than margins.