Wednesday, December 12, 2012

On The Econ Beat: No Jobs Means No Housing Boom And Sagging Home Prices, Plus: What A Governor Can Do To Protect New Mexico Against The Blunt Budget Axe Of Washington 

Sure, jobs are tight, but most folks are employed and bringing home a paycheck. But that doesn't mean the recessionary environment when it comes to employment around here doesn't impact them. For one, if you own a home in the ABQ metro it's likely its value has taken a hit, and its price isn't going to start going up until the jobs numbers start to spike upward. The news:

In Albuquerque, the value of a typical home dropped 1.36 percent during the past 12 months, ranking it 82nd-worst among the 102 major metros.

ABQ realtors report the median price of homes sold in the metro in November is $165,000. Remember the heady days of the housing boom when that figure soared well past $200,000?

The job and housing markets are linked like Santa and his sleigh--one isn't going anywhere without the other. So while California and Arizona add jobs, housing prices there start to recover. That makes people confident about spending and gets the economy moving. That in turn creates more jobs and generates more tax revenue.

There's a party starting up all around us, but we haven't been invited. Until we start generating jobs, New Mexico is the wallflower at the dance.


It's not just bringing in jobs in here that is a challenge, it's protecting what we've got. We don't think Washington's going to jump off the fiscal cliff. Some kind of deal will be struck, but the "crisis" is highlighting just how dependent we are on federal funding. If DC doesn't get a deal done, the estimates are we could lose 20,000 jobs in our federal energy and defense complex. Governor Martinez is saying as much, but she asserts there is little she can do:

There's nothing I can do other than to encourage that they get in a room and not leave that room until they get an agreement. They really need to just buckle down figure this out...otherwise New Mexico is going to be one of the biggest losers...

Maybe the Governor needs some ideas on how she can use her good offices to protect the state's immense federal funding not just during this fiscal cliff episode, but also in the long-term fight the state has on its hands to keep federal dollars flowing. Hey, glad you asked, Susana...

---How about putting to use the skills of retired US Senator Pete Domenici and ex-US Rep. Heather Wilson? Yes, they are gone from official power, but both are tightly connected to the national defense establishment and congressional Republicans. Surely, they have some ideas. And while it may draw guffaws, Governor Martinez calling on former Governor Richardson and former ABQ Mayor Chavez for assistance is just the kind of move the state needs--bipartisan unity.

--Forming a committee seems like a bland idea, but it's a good one. We formed one in the 90's to save Kirtland Air Force Base in ABQ. It worked. A community and state banded together and working from the same page is a powerful force in Washington. What your grandpa told you about "the squeaky wheel getting the oil" remains a truism today.

--Why the administration took former GOP State Rep. Brian Moore out of the state's DC lobbying position is a mystery. Now we have no one. Republicans involved in business know better than anyone that you have to spend money to make money. Martinez needs a strong lobbying voice for New Mexico. Where is it?

--The state's economic development secretary has passed off the job of protecting the huge federal investment here as a task entirely for the state's congressional delegation. But it's not all their job. Our state government needs to work in tandem with them. They need to be friends, not acquaintances.

--Martinez's administration needs to bring together the state's business community--so much of which would not exist without federal funding and which is gravely threatened by major federal cutbacks. The ABQ Chamber of Commerce, Association of Commerce and Industry and other business players need to learn how to fight--not retreat. And the Governor and her cabinet need to lead.

--The Governor must stop saying drastic federal funding cuts to New Mexico are "inevitable." They will be if she keeps sending that signal to Washington. "Hey, cut New Mexico, they don't really care."

We've heard ad nauseum how the state must transition to an economy more oriented toward the private sector. No one disagrees, but look at the top of the blog today. It isn't happening. It will take a generation of investment, if not more.

New Mexico is making a big mistake if it allows a 70 year national security legacy to fade away like the slowly setting sun. It is what built this state's modern economy. If Governor Martinez and those advising her have a disdain for government employment of any kind, they need to look past it and do the government work they were hired to do.

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