Thursday, April 21, 2016
Back On The Bursting Econ Beat: Top Analysts Say Intel Closure In View. Santa Fe Policy Makers Get Candid On Economy But Where's The Plan? And Readers Offer Big Ideas For A "Failed State."
the views of those who get paid to follow the chip maker is a very loud wake-up call:
Jim McGregor, a principal analyst with TIRIAS Research who follows Intel, says it's most likely that Intel will close the Rio Rancho plant: "Rio Rancho has several things going against it — it is an older fab, it is landlocked and it is not tied to a major engineering center."
Analyst Dean McCarron of Mercury Research had a similar take: "Given Intel's cutbacks on factories and the obvious lack of upgrades to Rio Rancho and the specific statement about head count reduction through combining facilities, I would say that Rio Rancho's prospects to benefit from the [Internet of things] and data center shift are very slim."
Analysts think the chance of luring a replacement computer chip company are slim.
A closure would not only mean 1,900 employees out of work but would also impact the many contractors who do business there, worsening the economic blow.
Even though the company has already shed thousands of employees, given the number still there a shuttering of Intel would be one of the most dramatic and damaging economic stories in the metro's modern history.
THEY KNOW IT
It's not that Santa Fe doesn't know what's going on. They do. It's just that there is no macro economic plan for New Mexico. And given the challenges the state faces there never may be. Look at the latest economic summary from the Legislative Council Service and the Legislative Finance Committee. The policy wonks seem more like your blog--writing more directly and forcefully about the grave condition of things:
New Mexicans, especially those who are younger and better educated, are leaving the state for better-paying and more available jobs — and an equally attractive quality of life that includes natural beauty and outdoor recreation — in surrounding states. These young, educated persons are the foundation of a workforce that attracts employers, drives the economy with their spending and helps create a vibrant socioeconomic synergy, all of which is important to a strong economy.
And the bean counters have this update on the state's depopulation:
New Mexico's population, which grew by more than 20% between 1990 and 2000, and by more than 13% between 2000 and 2010, is now projected to grow by just 6% between 2010 and 2020. Total non farm employment grew by just 300 jobs between February 2015 and February 2016, according to the Workforce Solutions Department. Higher-paying jobs across nearly every field in surrounding states continue to lure New Mexicans away from the Land of Enchantment, according to an analysis by the Legislative Council Service. . .
As we've said time and again the future New Mexico will be a much different place than your father's New Mexico.
NO MORE NM?
Reader Jim McClure is always ready to hop on the economic bandwagon and offer a pithy comment or two. We thought at first this suggestion was tongue-in-cheek but it's not:
Joe, your recent post about New Mexico being a failed state was right on target. Let’s get to the root of the problem. I’m talking statehood. Statehood probably looked like a good idea in 1912, but after 104 years New Mexico still is not making it as a full-fledged state. We have seen significantly less economic and population growth than neighboring states. Our population is shrinking as productive citizens leave the state. We depend on the federal government for support, and are so isolated that most Americans think New Mexico is a foreign country. We’re like Puerto Rico with less debt.
New Mexicans have consistently elected leaders who have failed to perform the core functions of government: public safety, education and economic development. It’s obvious that self-government is not working for us. So let’s vote to dissolve New Mexico and invite neighboring states to divvy up the territory. Our citizens would see an immediate benefit from the growing economies and rule of law in Texas, Arizona and Colorado. And Northerners would get legalized marijuana. It’s a win-win for everyone.
Sure, it’s a big step. Congress would have to approve it and remove a star from the flag. But since statehood is not working, it’s worth a shot.
History shows New Mexico got the dirty end of the stick when it was finally granted statehood. We were unable to come into the Union with Arizona as originally planned. Now 104 years later folks like McClure are starting to talk about another try. Incredible.
NM'S NEW DEAL
Joe --Juxtapose the grim economic news with the vision of ABQ Mayor Berry touting the "Albuquerque economic miracle" here at an Austin conference last month and you wonder where's the outrage?
Maybe it's because there has been no mainstream media outlets looking critically at the economic policies of Gov. Martinez/Berry for the more than half decade they've been running the show. They and the impotent leadership in the state business community have shrouded themselves in tax cuts as a panacea to all our economic woes. Guess what? It hasn't worked.
New Mexico needs it's own New Deal -- it needs large scale job retraining and adult basic education so people can have the skills to compete for jobs and support their families. It needs to completely rethink pre-K-20 education to give our kids pathways to careers. It needs an economic plan that plays to the state's strengths -- of which it has many. It needs to support (both financial and education) home-grown entrepreneurship and building the economy from the ground up. Only then, when we start making our own "scene" of innovation and can-do spirit will we be able to start attracting the outside companies looking to invest here.
This is not a two-year fix. This is a decades-long proposition. That's the challenge.
Reader Larry has more from Las Cruces:
Hi Joe, Your Monday blog only touched on education as among the many downward trends in our economy. NMSU is hemorrhaging good people as they try cover a $10.6 million cut in state funding. The good people who can find jobs elsewhere are leaving. This leaves a staff reduced in capability and thus less able cope effectively with the downturn.
A couple of weeks ago Troy Tudor, the head of the local Chamber of Commerce, argued that a good educational system is critical to reviving the states economy but then bemoaned the fact that once our kids get a good education they will leave the state for better opportunities elsewhere; a loss on our investment. The Republican mind-set.
A DYSON ADIEU
Reader Susan Bradley, VP of ABQ'S Media Strategies/Marketing Solutions, was one of several bemoaning the departure of longtime KOB-TV political reporter Stuart Dyson which we reported on Wednesday.
I’m so sorry to see that Stuart Dyson is retiring. I worked with him for several years both in radio and at channel 4. He is a first-rate journalist and has managed to maintain his sense of humor along the way, taking his job seriously but not himself. One of my fondest memories of Stuart is when he was still in radio and had the “Metro Murder Meter” report accompanied by the sounds of machine gun fire and chain saws. It was classic Stuart! New Mexico’s news coverage will suffer with his departure and frankly, I was looking forward to his political coverage as we approach the general election. . .
Aah, the good old "Murder Meter from over 30 years ago. Well, the more things change. .
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(c)NM POLITICS WITH JOE MONAHAN 2016