Thursday, February 19, 2009
Raging Recession: 1,100 New Mexico Jobs Gone In 24 Hours; Blog Analysis & Perspective, Plus: Teague's Permanent Loan, And: More US Attorney Scandal
The full force of the fangs of America's economic calamity have sunk deeply into the fabric of New Mexico's private sector, sending over 1,100 onto the unemployment lines in just one twenty-four hour period. The layoffs, which started Tuesday afternoon and could be termed nearly massive for a state our size, sent the New Mexican political and business communities reeling and wondering just when the pain ends or at least goes into remission.
The long-predicted (at least around here) demise of Eclipse Aviation inched ever closer to reality Wednesday as 800 workers were "furloughed" but no one was betting that many, if any, of the 800 will ever draw paychecks again from the troubled company whose purchase has been delayed. Two hundred thirty miners were sacked at Chevron Mining near Questa in Taos County and the ax fell on over 100 employees of Zangara Dodge when the ABQ dealership shuttered its doors. Adding to the state's woes is the continuing crash in the oil and natural gas markets this week, promising more pain for the royalty dependent state treasury.
The failure of Eclipse was especially punishing to the state's political class which has lined up-- nearly in unison--to support millions in tax and other incentives and $19 million in direct state cash investment in the now bankrupt outfit. It was all for naught and the repercussions of the mass unemployment--if it indeed stands--will be felt in the already beaten down housing market, at small businesses tied to Eclipse and in the bottom line at ABQ City Hall where gross receipts tax collections have been steadily plummeting.
The widespread layoffs could intensify fear, causing those with jobs to further reduce spending prompting the area economy to spiral further downward. The saving grace? Southern NM is escaping the full force of Hurricane Recession, getting protection from increased military spending.
THE ECLIPSE LESSON
ABQ Mayor Marty Chavez is the politician most closely associated with Eclipse, even making his 2005 re-election announcement at the company's headquarters. He won't be doing that when he announces his 2009 bid, even if Eclipse manages to stay around. The unquestioning faith placed in Eclipse by the government and private sectors, abetted by an overly friendly media, raises serious questions about the approach to building the metro and state economies. That means the policies of Governor Richardson, Chavez and the city's economic elite. Eclipse was sold to taxpayers as the centerpiece of a new high-wage economy with predictions of spin-off businesses multiplying like jack rabbits. But now the music has stopped and there are not thousands of chairs for unemployed New Mexicans to sit in.
Even as water flooded the Titanic Pete Mitchell of the city's economic development office said of the Eclipse announcement: "We didn't see it coming." Really? That must be some powerful Kool-Aid Pete is drinking. Does it cause blindness? The demise of Eclipse has been predicted in trade publications more than the Second Coming. Pete's boss, Mayor Marty, told TV news the furloughs were "a stark reminder that ABQ is in a recession." Gov. Richardson made similar comments. (Complete audio of Eclipse media conference call announcing furloughs is here.)
The cascade of distressing economic news is turning the state's politics upside down. Liberal ABQ Dem State Rep. Al Park told reporters the state must be "fiscally conservative" as it grapples with the new reality. There was talk of state lawmakers taking up emergency measures to lessen the blow for the laid-off workers. Help today would not be too soon for the newly unemployed and their families.
Shivers are starting to go up the spines of public employees. This state is getting uncomfortably close to laying off classified government workers--a drastic action not seen here in the post-WWII era.
The federal stimulus--like it or not--is now a lifeline that thousands of New Mexicans will be grasping for before this storm passes.
IT DIDN'T COME CHEAP
Hobbs oilman and now US Congressman Harry Teague made an investment in himself when he sought the southern Congressional seat, and it turns out it was a permanent one. Teague loaned his campaign $1.7 million, but only paid himself back $50,000. Federal finance rules allow candidates to invest as much money as they like in their own campaigns, but with a catch. The law limited the amount that could be repaid after Election Day to $250,000.
Former Congressman Steve Pearce is making noise about trying to recapture the Teague seat which he gave up to make an unsuccessful run for the US Senate. But it will be tough for the out of power Pearce to raise the millions needed for a campaign. Pearce may need to bite the bullet like Teague did and write a check from his own personal oil fortune if he is to have a realistic chance of making a comeback.
Meanwhile, we checked FEC records to find out just how much of the money GOP southern NM Congressional candidate Ed Tinsley loaned himself had been paid back to his personal bank account. We counted about $165,000, plus he had about $13,000 in cash on hand. The restaurant owner generated controversy when he announced he had loaned himself $500,000 but it was soon revealed that he had scaled back in his media buy in the final days of the campaign against Teague.
WILSON AND IGLESIAS
Yet another early 2010 Guv race development. Former ABQ GOP Congresswoman and possible Guv contender Heather Wilson has made a rare statement on the US attorney scandal. From Talking Points Memo on the federal grand jury probe of the firing of NM US Attorney Iglesias and other US attorneys.
(Last year) Wilson was also questioned by the Inspector General and OPR (Office of Professional Responsibility) about her efforts to have Iglesias fired as U.S. attorney. Unlike (NM GOP Senator) Domenici and (his Chief of Staff Steve) Bell, Wilson for the most part cooperated with their effort. But there were some questions that she refused to answer from the investigators, drawing criticism from them in their final report.
Contacted at her home in New Mexico, Wilson told me she did not want to comment about whether she would now answer all questions posed to her by Dannehy or a federal grand jury because the grand jury was in an active stage.
Heather not wanting to comment about whether she will fully open up on the scandal could thwart any efforts she plans to tag her Dem foes as ethics violators. It's one of the reasons the verdict is still out on whether Wilson will actually make a Guv run.
As for Senator Pete and his staff chief Bell, their stonewalling of Justice seems to have set off the prosecutors. He is through with politics, but his standing in history--his legacy--is taking a big hit.
PATTY JENNINGS R.I.P.
"Cancer sucks, but it's not all bad. We met some of the nicest people in the world because of it." So said plain-spoken NM Senate President Pro Tem Tim Jennings as he eulogized the memory of his wife, Patty, who succumbed to breast cancer at 53. A Roswell Convention Center service was jammed with 1,800, including the Guv and Light Guv. The picture posted here of Tim and Patty in their younger days was among those viewed by the mourners. Patty Jennings lobbied in Santa Fe and helped write legislation to make health insurance more available to all.
THE BOTTOM LINES
"It's all a joke!" So says KKOB-AM radio talker Jim Villanucci of the possibility of actor Val Kilmer running for the 2010 Dem nomination for Governor. Jim may know what he is talking about--he is a former professional standup comedian and joke writer for Jay Leno and the Tonight Show....From GOP Guv candidate Greg Zanetti regarding our Wednesday blog:
Regarding Heather Wilson, I do not claim to know whether she can win a statewide primary or not. I have the utmost respect for (her) and realize that every election has its own dynamics. If I left the "wall-leaners" with that impression, it was not intended.
Okay, Greg. But if you get in a primary battle with Heather, you might want to check your etiquette book at the door. But then again winning isn't everything, or is it?
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(c)NM POLITICS WITH JOE MONAHAN 2009
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