A lot has been made of last Tuesday’s turnout. Many campaigns and prognosticators were predicting a low turnout – some were praying for one. As it turns out (pardon the turn of phrase), last night’s primary election turnout was higher than 2006 and lower than 2002.

More than 257,000 total votes were cast in Tuesday’s election, according to unofficial returns on the secretary of state’s web site.

That’s almost 62,000 more votes than in the 2006 gubernatorial primary, when 22 percent of eligible Republicans and Democrats participated.
(Albuquerque Journal)

Turnout was down from the 2002 gubernatorial primary, when 34 percent of eligible voters cast ballots.
(Albuquerque Journal)

But there’s more to the story of turnout than the typical (and regrettable) display of voter apathy. Last night’s election results show surprising weakness in Diane Denish’s Democrat support. Counting the 2,650 votes cast for write-in candidate Billy J. Driggs, there were 15,084 fewer votes cast in the Democratic gubernatorial primary than cast in the Democratic lieutenant governor race. That’s roughly 12% fewer votes cast for governor than for lieutenant governor. (View the statewide 2010 unofficial primary results here.)

You may be thinking… “Diane Denish was unopposed so it makes sense that she’d end up with an under vote.” Let’s take a look at the last election where an “unopposed” Democrat ran for governor. In 2006, Governor Bill Richardson topped the ticket for the Ds. In that race there 108,108 votes cast for either Bill Richardson or write-in Anselmo A. Chavez. There were 107,556 votes cast for Lt. Governor Diane Denish – a difference of 552 votes in favor of the gubernatorial contest. Richardson lost less than 1% to the write-in and actually pulled more votes than Denish. (View the 2006 primary results here.)

Tuesday, 15,084 Democrats who were involved enough to vote in a primary voted for a lieutenant governor candidate and specifically did not vote for Diane Denish. These are primary voters who are far more likely to vote the party line yet over 15,000 of them didn’t vote for Diane. In fact, sources downtown indicate that quite a few D ballots carried names like Martinez, Domenici, Arnold-Jones, Weh, and Turner as write-ins.

When you couple apparent Democrat disdain for Diane with an anemic 28% turnout of the party faithful, it’s looking more and more like New Mexico Democrats have trouble at the top of their ticket and Denish knows it. The light guv immediately went on the offensive against the Republican nominee in her primary acceptance speech. A candidate – especially a well known candidate – never attacks an opponent unless they’re a threat. Martinez’ convincing primary victory is evidence that Diane should be afraid… very afraid.

Tuesday’s poor performance could also spell trouble for down ballot Ds who need a strong top of the ticket candidate to drive turnout. There won’t be an Obama or even a Richardson on November’s ballot and Ds can’t count on Teague, Heinrich, or Ben Ray, Jr. to drive turnout. It will be up to Di to create coattails and if Tuesday is any indication, she may not be wearing a coat.

But, before anyone starts measuring the drapes on the 4th floor, Denish is a formidable opponent equipped with a ton of campaign cash. Martinez will have to do some intense fundraising to catch up and run a determined campaign lest she snatch defeat from the jaws of victory.

The five Republican gubernatorial candidates delivered a 34% Republican turnout. If Martinez runs a solid race and the party can come together behind their nominee, Denish and down ballot Ds may very well find themselves in a precarious position this fall.

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Governor (R) – Bernalillo County
Early information from sources close to the counting have Allen Weh leading Susana Martinez by a slim margin in the absentee count. However in Early/In-Person voting, Martinez has apparently opened up a considerable lead. The rest of the field seems to mirror recent polls with Doug Turner leading Pete Domenici, Jr. and Janice Arnold-Jones respectively.

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A year ago New York (which is the center of the universe) was abuzz over Ponzi Master Bernie Madoff who made off with an estimated $18 Billion and earned a 150 year prison sentence. Right here in the Land of Enchantment we have our own Mini-Madoff. Real estate broker Doug Vaughan is accused of filching $80 Million from some 600 investors. As the Albuquerque Journal article explains:

According to the SEC complaint, Vaughan gave promissory notes to investors in exchange for loans. The notes had one- to three-year terms and unusually high annual interest rates ranging from 10 percent to 25 percent. The notes were supposedly invested in real estate, which has turned out to be an assortment of primarily houses, townhouses, vacant land and Vaughan’s personal mansion — and worth nowhere near the amount of the loans they collateralized.

The promissory note program, operated through Vaughan Company Realtors, built up to roughly 600 investors, most from New Mexico, but also scattered across the country, who were owed a total of $80 million in principal, according to the SEC complaint.

The SEC alleges that loans from later investors with Vaughan were used to pay off earlier investors in “classic Ponzi fashion.”

Full story (subscription only) here. More coverage on Vaughan here, here and here.

Purveyors of Ponzis convince investors to hand over their investment cash by promising them incredible returns. The scheme often works – for a while. According to the SEC:

Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

As long as there are new investors brought into the system to pay for the fictional returns of earlier investors the scheme works.

Pyramid schemes are similar to their Ponzi cousins in that it requires an ever increasing number of new members to support the existing members. The only difference is Pyramids often involve a real or fictitious product. Both ultimately collapse under their own weight. As  the SEC explains,

With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.

While Bernie Madoff may be the most well known star of the Ponzi scheme world and Doug Vaughan may be our own Mini-Madoff, there’s an even bigger Ponzi that has been in operation since 1935 – Social Security. The “investor” pyramid has been supported by working Americans who have outnumbered those receiving benefits and an ever increasing FICA “contributions.” Social Security will temporarily flip upside down this year and do so permanently in 2016.

All of which brings us to the Ponzi Pyramid that is Obamacare. Individual mandates must be built into the system as the healthy must pay for the sick. One doesn’t have to be an actuarial genius to figure out that with the boomer bomb set to explode in 2016, Obamacare may never be actuarially sound even with the four years of pre-paid taxes designed to build the base of the pyramid. That assumes of course, that there will be any of those pre-paid taxes left after four years. Remember the Social Security lockbox?

In the private sector, we indict, arrest, and incarcerate people like Vaughan and Madoff who build their Ponzis and Pyramids on shifting sands. When their schemes collapse they take all of the investors with them. The same is true of Social Security and Obamacare. They are by their very nature unsustainable. Not if, but when these federal schemes collapse they will take the American economy with them.

Democrats in Congress have brought us the greatest Ponzi scheme and now the greatest Pyramid scheme all in the name of doing what is best for us. Unfortunately, there’s little hope of seeing a Pelosi perp-walk anytime soon. Our only remedy is to sentence these Political Ponzi Purveyors to the political wasteland next November.

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The party of King George and of tyranny has passed their healthcare bill and freedom dies to the chants of “yes we can.” The House Democrats have passed their bill 219 to 212 without a single Republican vote.

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What is it about the New Mexico Secretary of State’s Office that seems to draw shady characters and indictments? Former SoS Rebecca Vigil-Giron faces 50 – count them – 50 felony counts of fraud, money laundering, tax evasion, creating false documents and soliciting or receiving kickbacks. Now current SoS Mary Herrera is being accused by former Elections Director AJ Salazar of picking up where Vigil-Giron left off.

A corrupt elected official in New Mexico?! Say it isn’t so! Using exempt employees as campaign staff, protecting politically connected employees, and targeting whistle-blowers are the unfortunate result of 70 plus years of single party rule and an everyday occurrence in state government. But what’s amazing is that someone with writing skills that would embarrass a 5th grader managed to get elected in the first place.

“AJ this is the second time you went over my head, first time with IT and now (individual’s name blacked out) had no right running to you. She said she doesn’t agree always with DON F (Don Franciso Trujillo) and I. I brought to her attention how about the times you two go walking around disappearing from office. Ethic? Who is judging who. I do not appreciate you who I depend on going over my head.”
- Secretary of State Mary Herrera Email (Rio Grande Sun)

Sure… People don’t always use the best grammar when communicating via email, but are you kidding me?! This little snippet of laughable literature and incomprehensible innuendo barely makes any sense. It appears from this small sample that the highest ranking election official in the state is hardly literate.

Corruption aside, Herrera is charged with running elections in New Mexico. Is it too much to ask that the Secretary of State have basic literacy skills? After all, if Herrera can’t write…

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The major difference between government and business is coercion and control. Both suffer through tough economic times. Both can be and often are self-serving. Both can be corrupt. But unlike government, private businesses are controlled by the willingness of the public to continue to do business with them (see Toyota or Government Motors).

When something goes wrong businesses will work to fix the problem and restore the relationship with the customers upon whom they depend. When the economy tanks, business pulls back, spends less, and works to run as efficiently as it can. Sometimes businesses can’t cut enough and can’t convince enough buyers to continue buying their products and services to be able to continue. So regardless of why a company is in trouble, it fails, closes up shop, ceases to exist.

Government on the other hand, has the power of coercion and absolutely no market control. “Customers” of government do not choose to purchase the product they are forced to do so. Consequently, when government falls on hard times it simply forces its “customer” to pay more for the same services.

The food tax, which was lifted in 2005, would be reimposed at the local tax rate, which averages about 2 percent statewide. The precise rate depends on what city or county the food is bought in.

The state has been reimbursing local governments for the amount they would have taken in had the food tax stayed in place. Those payments will stop, saving the state an estimated $68 million a year.
- Albuquerque Journal (Subscription)

The statewide gross receipts tax, now at 5 percent, would go up one-eighth percentage point — the equivalent of 12.5 cents for every $100 spent — under the plan.

New Mexicans pay gross receipts taxes on nearly everything they buy.

Smokers would be taxed an additional 75 cents per pack for four years, yielding another $33 million for the state, under the bill the House passed. One-third of the revenue would be allocated for public schools, under the House bill.

The state now taxes cigarettes at 91 cents a pack, while the federal tax is $1.01.
New Mexicans who itemize their deductions for income tax purposes would lose a deduction, under another provision of the tax bill.

They would no longer be able to deduct their state and local income and sales taxes, as they do on their federal returns. The bottom line for the state: another $66 million.
- Albuquerque Journal (Subscription)

That’s the power of coercion. 113 people in Santa Fe can increase how much you pay for their “services” regardless of whether you want those “services” or would ever need those “services.” Not to mention the fact that those 113 people were part of the bad management team that created a billion dollar mess in the first place.

Government needs to be smaller, more efficient, and do more with less just like a business would or like you already do when faced with smaller checks. And don’t fall for the “progressive” tax arguments made by radical leftists like Senator Griego that “the wealthiest New Mexicans [need] to step up to the plate.” Who already pays the most in taxes and who creates the jobs that pay for government mismanagement in the first place?

Until and unless politicians in Santa Fe (primarily Democrats) demonstrate that they can control their behavior by cutting their spending, voters should send them packing. The power of coercion found in government is simply too tempting to leave in their hands.

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Since the announcement of Obama’s health care summit, the most popular participatory sport in the media has been speculation on what game the President and his Democratic allies in the House and Senate were going to play. With lunch approaching, their strategy is clear. With the exception of tort reform, no matter what the Republicans say Obama’s response is “it’s in there.”

Given the 2,500 plus pages of the competing House and Senate bills, there’s probably some merit to the argument that some of the Republican concepts are in there. However, implementation is as important as conceptualization.

Take for example the concept of choice in health care insurance. The House and Senate bills technically allow choice, but they also encourage employers to drop health care benefits in favor of a fine that would be cheaper than paying the premiums. In practice health care choice will diminish and health insurance companies will simply go out of business.

Most of the problems in health care today have been directly caused by government intervention and regulation. Prohibitions against selling insurance across state lines, arbitrary and low reimbursement rates set by Medicare that shift care costs to the private sector and private insurers, and a whole host of other regulations and mandates all contribute to the rising cost of health care.

Obama is using this – the first – televised “health care summit” to compile a list of concepts that Republicans and Democrats “agree” on in order to sell the bill to a hostile American public. As usual, the devil is in the details and how you implement policy is often more important than the concept behind it. The Democrats and the President want the public to focus on the concept and allow them to decide how to implement it. Don’t watch the man behind the curtain and don’t worry about it because “it’s in there.”

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New Mexico is in a budget crisis. Spending is outpacing revenue by as much as $1.2 Billion. What did Governor Richardson and the New Mexico Legislature accomplish in their 2010 legislative session?

Nothing.

Not that I’m particularly upset about the legislature failing to pass a budget that includes a slew of tax increases and relies on short-term “stimulus” money to fund long-term liabilities… I’m not. So far, the Democrats in charge have failed to recognize the fact that their spending ways have inevitably led to the current crisis. Instead of addressing the root of the problem – state spending – they’re looking for ways to use short-term money to fund long-term liabilities.

To make matters worse, instead of dealing with the budget in a time of financial crisis legislators were busy working on cell phone use and domestic partnerships among other things. The main priority in a 30 day session is the state budget. Failing to produce a budget during a budget session in the middle of a budget crisis is unforgivable.

This is more than a case of legislative lethargy -  it’s a case of legislative irresponsibility. Republicans are holding the line on requiring spending cuts while Democrats are in denial.

Understand the days of financial largess due to oil and gas revenue are over. The state has made it near impossible to make a buck pulling oil out of the ground in New Mexico and natural gas prices aren’t likely to rise again anytime soon. The solution to the budget crisis is to reduce state spending – something the Governor, Lt. Governor and Democrats in the legislature refuse to do.

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The Rail Runner is New Mexico’s $400 plus Million black hole. In 2008, voters decided to try and help fill the bottomless pit by approving a gross receipts tax that is supposed to bring in $12 Million a year – a little over half the $22 Million operating budget.

The train’s operating budget this fiscal year is about $22 million, with $12million expected to come from gross receipts tax revenue, about $2.9 million from fares and the rest from a combination of other sources. (ABQ Journal – Subscription)

The Rail Runner burns $22 Million a year, receives fare revenue of $2.9 Million and GRT revenue allegedly equaling $12 Million (figures vary wildly). Including the claimed $750,000 budget gap, the Rail Runner receives approximately $6.35 Million from “other sources” – nearly a third of their annual budget.

Understand that these “other sources” are the same sources as every other tax dollar thrown into the abyss – New Mexico taxpayers. We foot the bill to the tune of 87% of the train’s annual budget. Only 13% of the Rail Runner budget is paid for by those who consume the state’s transit “product.”

Now, Big Bill wants to use $643,500 from Obama’s slush fund to keep the train alive for one more year. It’s immediately obvious that Richardson is stalling for time. But more importantly, the governor is refusing to recognize the dire need to cut spending just like his fellow Democrats in the New Mexico Legislature.

The Rail Runner is running about a 3% deficit. The Governor and Rio Metro would have us believe that without the stimulus money the Rail Runner would stay in the barn on Sundays. If one day a week costs $643,500 a year then the total Rail Runner budget would be less than $5 Million a year. For $5 Million a year the Rail Runner might even be worth the subsidy!

The fact is Rio Metro should be able to close a 3% budget gap without threatening 14% of the available service or using non-recurring federal stimulus. But, every time Democrats get caught with their budgets showing they expect the public to pick up the slack while they continue to spend as if nothing had happened. Not only is Richardson kicking the budget train down the track, he’s rewarding bad behavior and encouraging inefficiency.

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The House Appropriations and Finance Committee passed out of committee – on a party line vote – their idea for “balancing” the state budget. Apparently, the Democrats on the committee believe that they can close an almost 9% budget gap with a 1.4% reduction in spending.

The proposed spending of state and federal money is about 1.4 percent, or $82 million, below this year’s budget.

The measure relies on $203 million in extra federal aid next year, some of which has yet to be approved by Congress.

The budget also leaves a hole to be plugged with $300 million in new state revenues from tax increases. (Albuquerque Journal/Subscription)

Notice those last two sentences. The Democrats’ budget relies on over $500 Million of money that they don’t have, but might get. Meanwhile, New Mexico’s spending addiction rages on with barely a noticeable reduction.

So when does $82 Million equal $600 Million? When Democrats are in denial about the mess that they have created and desperately need to claim that they’ve “balanced the budget.” Must be the new math or something.

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