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Accuracy, relevance sought

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By Harold Morgan

A boring sameness of errors, misstatements, baseless assertions and irrelevance pervades discussions of New Mexico’s economy and what to do about it. Lea, Eddy and Chaves counties are the big exception.
The most recent sinner is one of the good guys, Paul Gessing of the Rio Grande Foundation. His op-ed is posted at www.riograndefoundation.org.
 (Disclosure: I worked with Gessing when RGF owned the former print incarnation of my Capitol Report New Mexico publication.)
New Mexico doesn’t attract businesses, Gessing claims.
That’s just not true. April brought the announcement that avionics supplier
Bendix/King selected Albuquerque for its headquarters with 100 jobs expected. Nearly another 100 jobs will come from the new Albuquerque headquarters of Tres Amigas, developers of a $1.5 billion utility interconnect station hear Clovis.
Intrepid Potash is developing a new mine near Carlsbad. Sprouts, a grocer, bought stores in Albuquerque as part of a larger deal and is considering other New Mexico cities.
A business expansion is the $3 million (or so), four-building Santa Fe compound of best-selling authors Jonathan and Faye Kellerman. It amounts to a branch plant. They come to Santa Fe from California to manufacture their product—book manuscripts—without distraction.
That we have no Fortune 500 headquarters, which is true, is supposed to validate the claim we don’t attract businesses.
 Even if we did not attract businesses, this supportive citing of large corporate locations is a rhetorical leap, begging for unkind adjectives. Fortune 500 headquarters tend toward large cities (New York, Chicago, Los Angeles), or near resources (oil) or where they started (WalMart).
Indeed, Fortune 500 headquarters locations and business climate don’t seem to correlate. Three of the top four headquarters states lead in terrible business climate. They are California with 53; New York, 50; and Illinois, 32. The good business climate outlier is Texas with 50.
In any case, Fortune 500 firms almost never move. A recent mover I remember was Boeing, which went to Illinois. New Mexico is not in the Fortune 500 headquarters game and so what.
“Entrepreneurs starting businesses and hiring people” drive economic growth is another claim.
Productivity improvement—doing more with the same or less— is perhaps the critical factor in economic growth. Agriculture is the example of the moment. Today it takes two hours of labor to produce 100 bushels of corn. That’s two percent of the pre-World War II 100 hours, says the Federal Reserve Bank of Kansas City.
Entrepreneurs neither necessarily start businesses nor hire people, the relevant Wikipedia article reminds us. Much entrepreneurial wisdom comes from the Austrians, the leading good guys of economists, especially Joseph Schumpeter and Friedrich von Hayek.
Creating something new and building it lies at the core of the idea of entrepreneurship.
The place of creation could be within a large organization or even government. Hiring people isn’t required. A new bakery might hire a couple of folks, but unless the intent is to change the bakery world, the enterprise only provides a substitute income for the owner.
The assertion collection closes with an old straw man — that New Mexico loses, not being a right to work state. (Right to work means employees of companies with a union contract are not required to join the union.)  
Of the state’s wage and salary workers in 2011, only 6.8 percent, or 49,000, are union members. Another 15,000 are represented by unions, according to the Bureau of Labor Statistics. While I don’t disagree with Gessing, outside the public sector, unions aren’t much of an issue.
The Martinez administration seems to have adopted a pragmatic and longer term approach. Education is the administration’s big fight. Taxes appear on the table, though not the needed massive shuffle.
Accuracy instead of mythology would better serve our economic development discussion.
Harold Morgan
New Mexico Progress