The New Mexico Film Miracle, Now Showing at Taxpayer Expense

New Mexico politicians dearly love the film industry, and why wouldn’t they?  It gives them everything politics likes best: celebrities, ribbon cuttings, press releases, big numbers, and a chance to stand in front of a camera while pretending the camera showed up entirely on its own.  If a governor or legislator can point to a soundstage, a catered lunch, a movie star hiding behind sunglasses, and a rented van full of assistant auxiliary vice-producers, then, by golly, economic development has arrived!

Or so we are told.

The official story is that New Mexico’s film subsidy is working.  Hollywood comes here, spends money, hires people, uses our landscapes, and occasionally blows up a fake gas station somewhere outside Albuquerque.  In return, the state writes a very large check, calls it a tax credit, and assures the public that this is how prosperity is made.  The whole thing is presented as if the state has discovered a magic well: drop taxpayer money in one end, and out come jobs, glamour, and—maybe—a Netflix series with better lighting than plot.

But before we start polishing the Oscar and naming a new state highway after some producer from Burbank, it might be worth asking the rude question: are New Mexico taxpayers actually making money on this deal?

The answer appears to be no.  Not “maybe no.”  Not “no, but only if you use mean arithmetic.”  More like plain, old “NO”—the kind your banker gives you when you ask whether buying a bass boat counts as retirement planning.

The film industry creates activity.  Nobody seriously denies that: when a production comes to town, people rent hotel rooms, they eat meals, and they hire drivers, security guards, extras, caterers, construction workers, set dressers, location scouts, and folks whose job titles sound like they were invented during a lunch break. Trucks move around.  People wear radios and look busy.  A local restaurant might sell 200 breakfast burritos before sunrise.  Money changes hands.  That is all real.

But activity is not the same thing as profit.  A fellow can set fire to his barn and create a lot of activity.  Firefighters arrive, insurance adjusters appear, lumber gets ordered, contractors get hired, and everybody in the county has something to talk about at the local diner.  That does not mean burning down barns is a sound rural-development strategy.

The state’s sales pitch often relies on big “economic impact” numbers.  Those numbers count money moving around.  What they do not necessarily show is whether the state treasury gets back what it spent.  That is the difference between a business’s making money and a carnival’s coming through town.  A carnival produces traffic, noise, corndog sales, and temporary employment.  But if the town must pay the carnival to show up, pay for the cleanup, and then brag that the cotton-candy stand had a good weekend, somebody ought to check the books.

New Mexico’s film credit is not just a polite tax break.  It is fully refundable, which is a fancy way of saying that if the credit is larger than the production company’s tax bill, the state will hand over cash.  That money does not fall from the sky—it comes from New Mexico people who paid taxes, including people who will never be invited to a wrap party, who will never meet a star, and who will never get residuals when the show streams in Belgium.

That is where the whole thing starts to smell less like economic development and more like political theater.

The politicians tax a waitress in Roswell, a mechanic in Farmington, a retiree in Las Cruces, and a small-business owner in Deming, then they send part of that money to a studio.  Then, when the studio hires a temporary crew in Albuquerque, the politicians hold a press conference to announce that they have created jobs.  This is a little like stealing a man’s cow, selling him a glass of milk, and then asking him to applaud your dairy program.

And what kind of jobs are we buying?  Some are good jobs.  To be fair, New Mexico does have a few skilled film workers: grips, electricians, carpenters, camera people, wardrobe people, set builders, production accountants, and other craftspeople who know their trades.  Those jobs can be skilled, respectable, and well-paid…when the work is steady.

But that little phrase—when the work is steady—is where the mule bogs down in the arroyo.

Film work is project work: the production arrives, spends money, hires people, shoots, wraps, and leaves.  It is not the same as a factory that opens, runs year-round, trains workers, buys supplies, expands, and puts down roots.  It is more like a cattle drive: there may be dust, payroll, and excitement, but when it passes through, the herd is gone.

The state’s own accounting shows that New Mexico is not making its money back from the film subsidy.  According to the Legislative Finance Committee, the film production tax credit returned only about 6 cents in state tax revenue for every $1.00 spent in FY25 — meaning state government recovered roughly six percent of what it paid out, while losing the other ninety-four cents from the treasury.  That does not mean no one made money; hotels, caterers, drivers, extras, crew members, and vendors certainly did.  But it does mean the state’s “return on investment” argument depends on counting economic activity, not actual money returning to the state budget.  In plain English, New Mexico is paying Hollywood a dollar, getting back about six cents in tax revenue, and calling the noise in between prosperity.

If you could make a state rich by using tax money to hire citizens…. You could fly by pulling on your bootstraps. 

The state also loves to talk about local jobs.  Fine.  But headcounts can be slippery.  When someone says most workers are local, are we talking about total people, total hours, or total payroll?  A local extra who works two days and earns pocket money counts as a job.  So does a driver.  So does a hotel clerk indirectly serving the production.  Meanwhile, the larger checks may go to stars, directors, producers, editors, specialists, and imported crew, all of whom show up temporarily, spend some time under our painfully blue sky, and then go home to wherever people say “the industry” without irony.

If the state counts every local extra and driver as proof of transformation, then we need to be careful.  A movie set can create the same kind of service jobs that a big wedding, a rodeo, or a convention creates.  That does not mean the economy has been reborn.  It means visitors came to town and spent money, partly because we paid them to.

Then there is the grand dream of building a permanent cluster of film-related businesses.  This is the part where the consultants get misty-eyed.  We are told that, if New Mexico just keeps subsidizing Hollywood long enough, the industry will take root here.  Studios will expand.  Workers will train.  Vendors will appear.  The ecosystem will mature.  One day, presumably, we will all wake up, and New Mexico will be the new Hollywood, only with better enchiladas and fewer agents named Brent. (Yeah—and the Rio Grande will have water running in it 24/7/365!)

Maybe…but film production is famously mobile.  It goes where the money is and it’s a target-rich environment.  Georgia offers money, Louisiana offers money, Oklahoma offers money, Canada offers money, and the next state governor who wants to hide economic failure will offer money, too.  (In fact, only 38 states are subsidizing film production!).  If New Mexico builds a film industry that survives only as long as New Mexico keeps writing checks, then we have not built an industry.  We have built a hostage situation.

Take, for example, the case of the Sylvester Stallone’s television series, Tulsa King.  The first season was filmed in Oklahoma because the state offered sizable subsidies.  The next three seasons were filmed in Georgia because Georgia offered a bigger subsidy.  You don’t have to be a particularly sharp viewer to notice that “Tulsa” no longer looks like Tulsa.  (The Georgia Department of Audits and Accounts reports that the state recovers only 10% of the money they spend to attract the movie industry.)

Even workforce training has a leak in the bucket.  Suppose we do train New Mexicans into real film professionals.  Good.  Then what?  A trained film worker can take those skills anywhere and when work inevitably slows down here, that person will head to Georgia, California, Texas, Oklahoma, or Canada.  The state will end up subsidizing productions to train workers who become valuable enough to leave.  And if they stay, then taxpayers must keep subsidizing Hollywood to make sure they have work.

That is not an industry.  That is Hollywood renting New Mexico’s checkbook.

New Mexico is not merely helping local grips, drivers, caterers, and extras get work—it is also helping pay the checks of people who were never New Mexicans and may never intend to become New Mexicans.  Under the film-credit system, the state can subsidize wages for certain nonresident crew, and the larger partner arrangements can reach into payments for nonresident actors, directors, producers, writers, and editors.  In plain English, that means a director flies in from Los Angeles, a star arrives with an entourage, specialized crew members come for a few weeks or months, the production wraps, and then they go home — while New Mexico taxpayers help underwrite their paychecks.  The state counts that as local economic activity because the work happened here, but much of the paycheck will leave on the same plane as the people who earned it.

Under New Mexico’s film-subsidy program, a movie star can roll into the state in a million-dollar bus, sleep in it, eat in it, shoot her scenes, cash her check, and drive away — while New Mexico taxpayers help underwrite the paycheck.  That is the magic of film incentives: even when the glamour leaves town, the bill stays behind.

The underlying question is simple: would the money do more economic good if left in the pockets of New Mexicans?

State government assumes that if it collects money from citizens and redistributes it to a politically favored industry, the resulting activity is proof of wisdom.  But maybe the citizens would have spent that money better.  Maybe they would have fixed trucks, bought appliances, paid medical bills, expanded small businesses, hired local help, repaired roofs, replaced water heaters, or just bought groceries without wincing.  That spending would also create jobs, only without needing a government office to issue a press release about it.

There is an old country test for this sort of thing: if the deal is so good, why does it need my money?

If New Mexico’s scenery, light, culture, climate, and talent pool are enough to make this a natural film center, then Hollywood should come here because it makes sense.  If Hollywood comes only because we pay it, then we are not selling New Mexico.  We are discounting it—bribing them to come.

That does not mean film production is bad.  Let them come.  Let them shoot Westerns, crime dramas, science fiction, prestige miniseries, and whatever else requires a lonely road, a suspicious sheriff, or a desert sunrise.  Sell them hotel rooms.  Rent them warehouses.  Feed them green chile.  Hire local workers.  Charge fair prices.  Welcome them warmly.

But stop pretending that writing checks to Hollywood is the same thing as building prosperity.

New Mexico has real needs: water, roads, crime, schools, courts, healthcare, broadband, housing, and a private economy strong enough that young people do not have to leave to make a living.  Against that list, subsidizing a wealthy entertainment industry starts to look less like vision and more like vanity.

The film subsidy creates smoke.  Sometimes it creates a pretty flame, too.  But after the crew leaves, the trailers roll out, the rented furniture is returned, and the last assistant director boards a plane, New Mexico is left with the bill and a politician pointing at the smoke as proof there was a fire.

Cecil B. DeMille supposedly said that young Hollywood actresses were called starlets because the word piglets was already taken.  In a similar vein, we call an elected moron in the state house a politician because the word thief was already taken.

New Mexico, An Art Colony Built Around a Gas Station

On and off for the last couple of weeks, I’ve been talking about cities getting dangerously close to plunging into an economic death spiral, primarily New York City because I find the likelihood of a young socialist like Mayor Mamdani fixing the city’s financial problems about as likely as a spavined hearse horse winning the Kentucky Derby.

An economic death spiral is what happens when a town gets to circling the drain like a tired dog before a nap: businesses pull out, workers move off, tax money dries up, the roads go to washboard, the schools start selling raffle tickets for copy paper, and the only folks still optimistic are the chamber of commerce, three realtors, and a man at the diner who insists a new truck stop is going to turn everything around just as soon as somebody fixes the exit ramp.  As tax income dries up, the city government inevitably tries to raise revenue by raising taxes, thus lighting the bundle of rags tied to the tail of the last fleeing business.

But, it is not only cities that can enter that downward spiral, but whole states can also do it as well, and my state, New Mexico, would be a classic example—if not for one saving economic factor that is an industry that our state government absolutely hates.

There is an old joke that New Mexico is a poor state with excellent scenery.  Like many old jokes, it survives because it is uncomfortably close to true.

If one were brutally honest—and honesty is rarely encouraged in economic development brochures—it is difficult to avoid the conclusion that, if not for the oil and gas industry, New Mexico would be firmly planted in an economic death spiral somewhere between “rust belt cautionary tale” and “forgotten Soviet republic.”

This is not entirely New Mexico’s fault.  Geography dealt the state a strange hand:  It is large, sparsely populated, dry, mountainous, and far from the great population centers of the country.  Unlike Texas, California, or Florida, nobody accidentally passes through New Mexico and decides to move there because the freeway exits looked lively.

What New Mexico does possess is beauty, culture, laboratories, military bases, chile, and an astonishing number of turquoise shops.  Unfortunately, none of those things generates the kind of tax revenue required to keep an entire state government fed, paved, pensioned, and air-conditioned.

Enter oil.

Oil in New Mexico is less an industry than a life-support system with pump jacks.

The southeastern part of the state—in the Permian Basin region—produces staggering amounts of wealth compared to the rest of the state economy.  One could argue that Hobbs and Carlsbad are effectively subsidizing Santa Fe’s ability to debate bicycle lanes, climate justice, and whether chile should be capitalized in official state documents.

Without petroleum revenue, New Mexico would face a deeply uncomfortable reckoning.  State government spending would have to shrink dramatically or taxes would have to rise to levels usually associated with medieval tribute systems.

This creates one of the great political ironies of modern America: New Mexico is culturally and politically suspicious of the very industry preventing its becoming economically indistinguishable from rural West Virginia with better sunsets.

The state’s public rhetoric often treats oil companies the way Victorian families treated embarrassing relatives: tolerated because they pay the bills, but never mentioned in polite company.  A recent governor of New Mexico declared that it should be the primary goal of the nation to reduce the dependency on petroleum by 50%.  Cut New Mexico petroleum income by 50% and the state will be desperate for a recipe for sand soup.

Meanwhile, every time oil prices rise, state government revenues suddenly bloom like desert wildflowers after a thunderstorm.  Budget surpluses appear.  Legislative wish lists expand.  New programs emerge.  Everyone becomes an economic genius for six months.

Then oil prices wobble and panic quietly spreads through Santa Fe like a norovirus outbreak on a cruise ship.

The deeper issue is that New Mexico has never quite solved the puzzle of creating a broad, diversified private-sector economy.

There are islands of success:

• Los Alamos,
• Sandia,
• defense contracting,
• tourism,
• healthcare,
• and, a trickle of retirement migration,

But these sectors do not combine into a roaring engine of population growth and entrepreneurial dynamism.  They create pockets of prosperity floating in a much larger sea of government dependency, low labor participation, and economic fragility.

One sees this in the demographics.

Young educated people leave in such large numbers that they may well be the state’s largest export.  Many rural communities steadily age, so that entire small towns seem to survive on a mixture of federal transfers, retirees, and determination.  Outside of Albuquerque and a few select corridors, economic momentum can feel thin.

And yet, oddly enough, New Mexico narrowly avoids outright collapse.

Why?

Again: oil.

Oil revenue functions like an enormous invisible subsidy that holds together a state economy otherwise struggling to generate sufficient taxable activity on its own.

New Mexico’s state government is not merely “helped” by oil and gas; it is structurally dependent on it.  Using the cautious state-budget framing, roughly one-third of recurring general-fund revenue comes from oil and natural gas, while a broader accounting that includes severance taxes, royalties, gross-receipts taxes, corporate taxes, worker income taxes, permanent-fund distributions, and related economic activity can push the oil-and-gas share into the 40%-50% range of general-fund support.  The direct money alone is enormous — billions from severance taxes, rents, and royalties — but the real dependency is larger because the industry also supports high-wage jobs, contractors, local purchases, and investment funds that feed the state treasury.  In practical terms, New Mexico can talk like an energy-transition state, but its schools, roads, agencies, reserves, and recurring spending are still heavily financed by the petroleum economy.

Imagine a household where one cousin works offshore rigs in the Gulf and sends home checks large enough to support twelve other relatives who spend most of their time discussing sustainable gardening and beadwork.  That, in simplified form, is New Mexico’s fiscal structure.

The state’s defenders will object that New Mexico has recently experienced pockets of economic growth.  This is true:  Intel has reinvested in Rio Rancho and Albuquerque has seen some revitalization, so there are real success stories.

But remove the petroleum sector from the ledger and the picture changes very quickly.

Worker participation remains weak compared to many states and private-sector depth is limited.  Many counties remain heavily dependent on government employment.  The state consistently struggles to retain college graduates.  Crime concerns in Albuquerque continue to hurt perceptions.  Educational rankings remain stubbornly poor despite decades of reform efforts and spending increases.

And while businesses are fleeing California and New York for the Southwest, almost none of them come to New Mexico because of our state personal income tax, our generally anti-business climate, and the state’s strong union laws.  If we draw a line across the United States, going along the northern boundary of New Mexico stretching from the Atlantic Ocean to the Pacific, only two states below this line are not right-to-work states:  California and New Mexico.  These two are also the only states below that line whose industrial bases are declining.

On paper, New Mexico has quite a few advantages:  several large state universities, low land cost, and a low cost of living.  Even with those resources, economic activity stops at the state border, as can be seen by this satellite photo of the Texas/New Mexico border at night.

The result is a state that often feels suspended between two futures.

One future imagines New Mexico transforming into a southwestern Colorado: affluent, outdoorsy, technologically sophisticated, culturally rich, and attractive to remote workers and retirees.

The other future looks more like a slow demographic fade: stagnant population, shrinking economic dynamism, rising dependency ratios, and a permanent reliance on federal and petroleum revenue to sustain living standards.

At present, oil is keeping the second future at bay, which creates a curious emotional atmosphere in the state.

New Mexico simultaneously behaves like:

• a frontier state,
• a federal dependency,
• an arts colony,
• a retirement haven,
• and an energy exporter. 

These identities do not always coexist gracefully.

The state wants the tax revenue from petroleum without fully embracing the culture that produces it.  It wants environmental prestige while depending heavily on extractive industry revenue.  It wants Scandinavian-style social programs with an economy that’s closer to rural Arizona plus uranium ghosts.

These contradictions could continue for quite some time.  Governments are perfectly capable of living with contradictions, especially when oil is above $70 a barrel.

But long term, New Mexico faces uncomfortable strategic questions:

What happens if the petroleum industry contracts substantially before the state develops a replacement economic engine?  What happens if the petroleum availability expands and the industry begins shutting down wells in states where governments tax production the most?

These questions lurk behind almost every optimistic press release about film studios, green energy corridors, aerospace hubs, startup incubators, and artisanal lavender festivals.

Because, despite all the brochures featuring happy hikers and attractive people drinking craft beer beside adobe walls, New Mexico’s modern fiscal reality remains astonishingly simple:

The oil patch is paying the electric bill…

And deep down, almost everyone in Santa Fe knows that and hates it.

The Ghost Ship, the Wrong Submarine, and the USS Stewart That Wouldn’t Stay Sunk

When I lived on Galveston Island, I frequently toured the USS Cavalla (SS-244), a World War II submarine on display at Seawolf Park.  This produces one of those small historical misunderstandings that only a tourist attraction can create.  Because the submarine is in Seawolf Park, many visitors naturally leave with the impression that they have toured the USS Seawolf. This is impossible, unless the Navy has developed a very aggressive museum-restoration program involving recovery from the bottom of the Pacific, because USS Seawolf (SS-197) was lost in 1944, most likely to friendly fire.  The Galveston Naval Museum identifies the submarine on display as the Cavalla, and the destroyer escort beside her as USS Stewart (DE-238).

The friendly-fire part of the Seawolf story is one of those grim little naval footnotes that make history feel less like a marble monument and more like a dimly lit office with too many filing cabinets.  The evidence indicates that Seawolf was probably sunk by the destroyer escort USS Richard M. Rowell after failing to respond properly during a tense anti-submarine search.  The Navy did not exactly put “We may have sunk our own submarine” on a recruiting poster, but the friendly-fire explanation was part of postwar accounting rather than a secret locked away until the age of the internet.  The Naval History and Heritage Command say the evidence suggests friendly fire was the most likely cause.

Still, I was not there primarily to solve the Seawolf confusion. I was there to tour the Cavalla, the submarine that sank the Japanese aircraft carrier Shōkaku, a veteran of the Pearl Harbor attack.  That is a pretty good résumé.  Most museum ships can say they served their country, the Cavalla can say she helped send one of the Pearl Harbor carriers to the bottom.  That gives the tour a certain edge.  You are not just ducking through hatches and trying not to bang your head; you are walking through a machine that once changed the balance sheet of the Pacific War.

But I always ended the visit by touring the ship tied up beside her: the USS Stewart (DE-238), an Edsall-class destroyer escort.  Destroyer escorts were not glamorous in the way battleships and carriers were glamorous.  They did not get much help from Hollywood.  They were the practical shoes of naval warfare: sturdy, necessary, and unlikely to be featured in a recruiting poster unless all the battleships were busy.  The Galveston Naval Museum says Stewart is one of only two remaining destroyer escorts in the United States, and the only surviving Edsall-class destroyer escort.

Reading up on Stewart, I discovered that there were actually three U.S. Navy ships named USS Stewart, all named for Rear Admiral Charles Stewart, who commanded the USS Constitution during the War of 1812.  This is where the story stops being merely interesting and starts behaving like it was written by a screenwriter who had been told, “Make it weirder, but keep the ships real.”

The first USS Stewart (DD-13) was one of the Navy’s earliest destroyers, a Bainbridge-class vessel from the dawn of the destroyer age.  She was small, narrow, fast for her time, and armed with the kind of optimism that early destroyers required.  In World War I, she escorted convoys off France, and even attacked the German submarine U-108 in 1918.  The Naval History and Heritage Command photo caption notes that Stewart’s funnel carried a star signifying that she had sunk or disabled a German submarine, though later evidence showed U-108 survived.

The second USS Stewart (DD-224) had the truly fabulous career, by which I mean a career that included almost every indignity short of being converted into a floating seafood restaurant.  She was a Clemson-class “four-stacker,” commissioned in 1920, and by World War II she was already an elderly antique destroyer in the Asiatic Fleet.  In peacetime, she had done the usual imperial-era chores: showing the flag, visiting China, rescuing people after the Kanto earthquake, patrolling rivers, and reminding everyone that the United States Navy could appear in your harbor whether or not you had invited it.  In 1938, Stewart even helped search for the missing Pan Am Hawaii Clipper, which vanished between Guam and Manila.  According to one timeline, Stewart left Manila on July 30 to search for the missing flying boat and was ordered to abandon the search on August 6.

The Hawaii Clipper mystery deserves its own shelf in the library of prewar weirdness.  The aircraft disappeared with fifteen people aboard, and no confirmed wreckage was ever found.  One rumor held that passenger Wah Sun Choy, also known as Watson Choy, was carrying millions in gold certificates intended for Chiang Kai-shek and the Chinese Nationalists.  That led to theories that Japanese agents hijacked or destroyed the plane, something Japan vigorously denies, but we shouldn’t let that get in the way of a good story.

Then came World War II, and Stewart’s life became genuinely strange.  In February 1942, during the desperate defense of the Dutch East Indies, Stewart was damaged in battle and made it to Surabaya, Java, for repairs.  There, in one of those moments that makes a sailor consider changing careers, she slipped off the blocks in a floating dry-dock and bent her propeller shafts.  With Japanese forces closing in, the Americans destroyed the ship with demolition charges, scuttled the dry-dock, and left her for dead.  The Navy struck her from the list in March 1942.That should have been the end of it.

It was not the end of it.

After nearly a year underwater, the Japanese raised her, repaired her, and commissioned her as Patrol Boat No. 102.  This is where Stewart became the “Ghost Ship of the Pacific.” Allied pilots began reporting the extremely awkward sight of what looked like an old American four-stack destroyer operating deep behind enemy lines. 

One can imagine the debriefing.  “You saw what?”  “An American destroyer.” “Where?”  “In Japanese waters.” “Have you been sleeping?”  “No.”  “Would you like to start?”  The Naval History and Heritage Command says multiple Allied pilots reported seeing the ship behind enemy lines after the Japanese commissioned her as Patrol Boat No. 102.

At war’s end, American occupation forces found the battered former Stewart afloat near Japan.  In a ceremony that was either touching, bizarre, or both, the U.S. Navy recommissioned her in October 1945 as DD-224.  Her crew nicknamed her RAMP-224, borrowing the language used for Recovered Allied Military Personnel, as if the ship herself had been a prisoner of war.  This is sentimental, absurd, and somehow exactly right.  Ships are just steel until sailors start talking about them; after that, they become characters.

The Navy brought Stewart back to San Francisco, but there was no real future for an old four-stacker that had served both sides, been sunk, raised, captured, recovered, and insulted by every ocean she met.  On May 24, 1946, she was used as a target ship and sunk off the California coast.  Even then, she did not go quietly.  Reports say she absorbed rockets, machine-gun fire, and naval gunfire for more than two hours before finally going down.  Some ships are sunk, Stewart had to be persuaded.

For decades, that was the end of the story.  Then, in August 2024, undersea searchers found the wreck of USS Stewart (DD-224) in the Cordell Bank National Marine Sanctuary off northern California.  She lies in about 3,500 feet of water, largely intact and nearly upright.  The National WWII Museum says the discovery was made by a team including Ocean Infinity, the Air/Sea Heritage Foundation, SEARCH, NOAA’s Office of National Marine Sanctuaries, and the Naval History and Heritage Command.

So there she rests: an American destroyer, a Japanese patrol boat, an American destroyer again, and finally a ghost on the seafloor.  If one is willing to be mischievous, she may be the closest wreck of a Japanese warship — sort of — to San Francisco.  Legally, historically, and emotionally, that statement requires several footnotes and possibly a naval lawyer.  But as a punchline, it is irresistible.

The next time someone visits Seawolf Park and says they toured the Seawolf, let them down gently.  They toured Cavalla, which sank Shōkaku, and Stewart, whose predecessor had one of the strangest careers in naval history.  That is not a disappointment.  That is an upgrade.  After all, any ship can have a service record.  Very few can say they served two navies, died twice, came home, and still managed to become a ghost story.

New York and the Search for the Last Taxpayer

There is an old joke that New York City could tax oxygen if only the air could be properly assessed and invoiced.  Given recent political trends, I fully expect a future press conference announcing the “Progressive Atmospheric Equity Contribution Fee,” payable quarterly by anyone breathing south of Yonkers.

This raises a serious question hidden beneath the humor: At what point does New York’s increasingly enthusiastic effort to tax the rich begin to resemble a man trying to drain a sinking boat by drilling new holes in the bottom?

To hear some people tell it, the rich are already fleeing New York in biblical caravans.  Hedge fund managers are supposedly racing across the Florida border in armored Bentleys while investment bankers rappel out of Midtown office towers carrying sacks of untaxed capital gains.  Somewhere in Palm Beach, according to this narrative, there is now a gated community populated entirely by former Upper East Side residents wearing linen suits and complaining about how hard it is to find decent bagels.

The truth, as always, is less cinematic and more interesting.

There is, in fact, real evidence that wealthy people have been leaving New York City.  New York’s own tax data show that millionaire out-migration increased sharply during and after COVID, with relocation rates rising well above historic norms.  Some of the ultrarich, especially those earning tens of millions annually, clearly decided that sunshine, lower taxes, and fewer regulations sounded preferable to paying both New York State and New York City income taxes while carefully navigating feces-laden sidewalks on the way to dinner.

And honestly, from a purely mathematical standpoint, one can understand their concern.  New York State already imposes one of the highest income tax burdens in the country.  Add New York City’s local income tax on top, then pile on property taxes, corporate taxes, sales taxes, mansion taxes, congestion pricing, assorted fees, and Mayor Mamdani’s threat of a pied-à-terre tax, and eventually even a billionaire may begin quietly Googling “residency requirements in Florida.”

Florida, meanwhile, waits offshore like a giant tax-free aircraft carrier.

No state income tax.  Warm weather.  Palm trees.  Private airports.  And an endless supply of real estate agents whispering, “Sir, your taxes alone could pay for this waterfront estate.”  New York tax officials admit almost 1,700 millionaires moved their tax address out of New York in just 2024.  New York hasn’t released the data for 2025 or 2026, but I doubt that many moved back.

Not surprisingly, Miami and Palm Beach have become popular landing zones for finance executives and wealthy retirees.  Texas has benefited too.  Wealth migration toward lower-tax states is real enough that entire industries now exist to help wealthy individuals establish legal residency elsewhere while keeping one tasteful Gucci loafer still planted in Manhattan.

But before we declare New York a post-apocalyptic wasteland populated only by rats and deranged graduate students, it is worth noting that the “everyone is fleeing” story is also wildly exaggerated.  New York is not in the red-light danger zone, but it is in the warning orange zone.  The NYC Comptroller says the city is already operating with a structural deficit, meaning spending is already running ahead of recurring revenue, and the budget relies on optimistic revenue projections, reserve drawdowns, unspecified savings, and reduced fiscal flexibility.  The state comptroller also warned that the city’s budget reduced contingency reserves, including the general reserve, down to the $100 million statutory minimum.

New York remains one of the most economically powerful cities on earth.  It still dominates finance, media, publishing, fashion, advertising, law, and international business.  People continue to move there because it offers opportunities unavailable almost anywhere else.  The city still attracts massive tourism, investment, and foreign capital.  And despite all the horror stories, the overall tax base has not collapsed.  Official projections still show growing tax revenue in coming years, although that may be offset by predictions of even faster growing expenditures.

This is because wealthy people are often less mobile than politicians and cable news hosts imagine.  Moving is not just a tax decision—it involves business networks, schools, family ties, social status, office locations, cultural institutions, and personal identity.  A hedge fund manager may enjoy saving millions on taxes in Miami, but he may also discover that his entire professional ecosystem still functions in Manhattan.

In other words, it turns out that civilization is annoyingly sticky.  But, with each arrival of a new millionaire or business in a Southern state, a small part of that missing social infrastructure is re-established, making it easier for the next hedge fund manager to set up shop. 

Still, New York faces a genuine long-term risk, and it is not necessarily the dramatic overnight collapse people imagine.  The real danger is something slower and far more bureaucratic: a gradual erosion of the tax base combined with increasingly optimistic government spending.

This is where economics stops being exciting and becomes terrifying.

Suppose Mamdani inevitably announces yet another new “tax the rich” proposal that is anticipated to raise $500 million annually.  Headlines celebrate.  Advocacy groups cheer.  Editorial boards declare that fairness has finally arrived.

Then reality intervenes.

More wealthy residents leave.  Others restructure income.  Investments are delayed.  Real estate transactions slow.  Businesses expand elsewhere. Capital gains are realized in different states.  Accountants suddenly become the most powerful people in America.

Instead of raising $500 million, the tax brings in $300 million.  Unfortunately, by this point the government has already spent the imaginary $500 million three times over and created six new agencies to administer it.

Now there is a budget gap.

The response, naturally, is to propose another tax, and triggering even more capital flight.

This is how cities wander into fiscal quicksand.  Not through a dramatic catastrophe, but through an endless cycle of optimistic revenue forecasts colliding with human behavior.  This is how Detroit, St. Louis, and Philadelphia triggered rapid economic decline.

The core problem for New York is concentration.  A tiny percentage of taxpayers provide an enormous share of tax revenue.  Millionaires account for a massive portion of New York’s income tax collections.  This means the city’s financial health increasingly depends on the continued willingness of a relatively small number of highly mobile people to remain exactly where they are and continue earning exactly as much money as before.

That is not a stable long-term strategy.  It resembles balancing the city budget atop a stack of champagne glasses.

And yet, the political incentives always favor more taxation because the immediate math looks irresistible. If one billionaire pays millions annually in taxes, then taxing him a little more appears painless.  Multiply that across thousands of wealthy taxpayers and politicians see visions of balanced budgets dancing in their heads.

The trouble is that economists are forced to deal with the horrifying reality that human beings react to incentives.

Raise cigarette taxes and fewer people smoke.  Raise gasoline prices and people drive less.  Raise taxes on capital and wealth, and eventually some capital and wealth relocate.

This should not be controversial, but somehow every generation of politicians acts shocked when it happens.

The final irony is that if New York ever truly succeeded in driving out large numbers of wealthy taxpayers, the burden would not vanish into thin air.  It would simply shift downward onto the remaining middle class, homeowners, renters, and businesses.  By the time officials realized the rich did not produce the projected tax revenue after all, the spending commitments would already exist.

And then a new politician would arise with a fresh PowerPoint presentation explaining why one more tax increase will finally solve everything forever.

At which point the last remaining taxpayer in Manhattan will quietly board a flight to Miami carrying nothing but a laptop, a residency affidavit, and a deep appreciation for palm trees.

The Mystery of the Lost Mysteries

I have always loved mysteries, probably because I worked my way through the entire Hardy Boys series in the second grade.  I was hooked early by secret panels, hidden staircases, stolen jewels, mysterious strangers, coded messages, and the absolute certainty that two boys with flashlights could outwit every adult in town.

Eventually, I moved on to Ellery Queen, Agatha Christie, Rex Stout, Lawrence Block, John D.  MacDonald, and a host of other great mystery writers.  The best of them understood something important: a mystery is not just a crime story.  It is a puzzle, a game, a contest between the writer and the reader.  The writer lays out the clues, hides the truth in plain sight, and then dares the reader to arrive at the solution first.

Good mystery books are still being written, and it is not hard to find one.  If you are looking for your next mystery, I would recommend subscribing to the newsletter from The Mysterious Bookstore, the “World’s Oldest and Greatest Mystery Fiction Specialty Store,” run by Otto Penzler.  You can find them here.

What I cannot find, or at least cannot find very often, is a good mystery movie or television mystery.  There are plenty of television shows and movies that call themselves mysteries, but most of them are not mysteries at all.  They are police procedurals, character dramas, revenge stories, thrillers, or episodes of “watch the star solve the case while everyone else stands around looking suspicious.” They may have a corpse, a detective, a lab report, and a confession, but that does not make them mysteries.

They all seem to fail in the same ways.

First, they frequently are not actually mysteries.  In the opening act, we often see who commits the murder.  We watch the killer creep into the room, pull the trigger, push the victim off the balcony, or poison the wine.  Then the rest of the episode consists of the detective slowly discovering what the audience already knows.  That can be suspenseful, but it is not a mystery.  It is a waiting game.

There is nothing wrong with that form, exactly.  Columbo made an art of it.  The pleasure of Columbo was not guessing who did it.  The pleasure was watching Peter Falk’s rumpled, shambling, apparently harmless detective worry the murderer to death with “just one more thing.”  But Columbo worked because it knew what it was.  It was not pretending to be a whodunit.  It was a how-will-he-catch-him.

Too many modern television mysteries give us the murderer early and then still expect us to pretend we are solving something.  We are not.  We are just watching the hero catch up.

Second, in the vast majority of television mysteries, the murderer is the highest-paid guest star.  This may be the single greatest weakness of television mystery writing.  The casting department destroys the plot before the first commercial break.

If a familiar actor shows up in the first ten minutes, has no obvious reason to be there, and then disappears into the background, you can safely arrest him immediately.  Television cannot resist this pattern.  The famous guest actor is never just the victim’s lawyer, the dead man’s neighbor, or the slightly rude restaurant owner.  He is there because the show paid for him, and, by heaven, they are going to get their money’s worth in the final scene.

This is especially true when the actor is just famous enough to be recognizable, but not famous enough to be above doing one episode of a network crime drama.  The moment he appears, the mystery is over.  You do not need fingerprints, blood spatter, or motive.  You need only ask, “Which guest star has the strongest IMDb page?”

Third, the suspect list is usually too small.  A real mystery needs room to breathe.  It needs several people who could plausibly have committed the crime, several motives that overlap, and several clues that point in different directions.  In a good mystery novel, almost everyone has something to hide, even if only one person is hiding murder.

Television usually gives us three suspects, and one of them is obviously innocent because he cried too much in the interrogation room.  One is too obvious, one is too sympathetic, and one is the guest star.  That is not a mystery.  That is a seating chart.

The problem is partly time.  A television episode has perhaps forty-two minutes after commercials.  In that time, it has to introduce the crime, interview witnesses, include a lab scene, give the regular characters something to do, provide a red herring, solve the case, and leave time for a final emotional conversation in a dimly lit office.  There is not much room for real detection.

Fourth, the structure gives the game away.  Television mysteries are often built on a rigid rhythm.  The first suspect is wrong.  The second suspect is also wrong.  The third suspect seems impossible, then suddenly becomes obvious after a late-breaking clue.  Someone lies.  Someone else says, “I should have told you this earlier.”  The detective sees something tiny, stares thoughtfully into the middle distance, and suddenly knows everything.

Once you know the rhythm, you are not solving the crime so much as reading the clock.  At minute twelve, the angry spouse did not do it.  At minute twenty-four, the business partner did not do it.  At minute thirty-five, the sweet old friend says something odd, and there it is.  Cue the confession.

The formula is so familiar that it drains the story of tension.  We know the first explanation is wrong because it came too early.  We know the second explanation is wrong because there are still eighteen minutes left.  We know the killer will be revealed at the exact moment the episode needs to start wrapping up.

Fifth, the detective often knows more than the audience.  This is a fatal flaw.  A fair mystery lets the audience reason alongside the detective.  We should see the important clues, even if we do not understand them at first.  When the solution is revealed, we should be able to say, “Of course.  I should have seen it.”

Too many television mysteries cheat.  The detective notices something the camera did not show us clearly.  Or a lab result appears at the last minute.  Or the hero remembers a detail from an earlier conversation that was not emphasized enough for any sane viewer to retain.  Then, in the final scene, the detective explains everything as if the solution had been obvious all along.

That is not mystery writing.  That is withholding evidence.

Agatha Christie, at her best, played fair.  Rex Stout played fair.  Ellery Queen practically invited the reader to stop before the final chapter and solve the case.  Television usually does the opposite.  It hides the usable clue, then congratulates itself for revealing it.

Sixth, character drama replaces detection.  Many television mysteries are less interested in the murder than in the detective’s personal problems.  The detective has a divorce, trauma, a drinking problem, a dead partner, a troubled daughter, a dying father, a corrupt boss, or all of the above.  The murder becomes a coat rack on which to hang the regular character’s weekly emotional burden.

Again, there is nothing wrong with character drama.  We like detectives with personality.  Sherlock Holmes had cocaine, a violin, and a tendency to be insufferable.  Nero Wolfe had orchids, beer, and an unwillingness to leave the house.  Travis McGee had a houseboat and a deeply complicated view of paradise.  But the mystery still mattered.  The character did not replace the puzzle.

On television, the crime often exists only to illuminate the detective’s feelings.  A murdered teenager reminds the detective of her own daughter.  A dead soldier reminds the detective of his time in the service.  A poisoned husband reminds the detective of his failed marriage.  By the end, the killer is almost an afterthought.  The real climax is the hero staring out a window, having learned something about grief.

Finally, the solution must be simple enough for one episode.  A good mystery needs misdirection, motive, opportunity, timing, character, and surprise.  It needs the solution to be unexpected, but inevitable.  That is hard to do in a novel.  It is much harder to do in forty-two minutes with a B-plot and recurring cast obligations.

So television reduces the mystery to something simple.  He lied about where he was.  She wanted the inheritance.  The brother was jealous.  The business partner was stealing.  The victim knew a secret.  The killer made one mistake, and the detective spotted it.

That may be enough for a crime show, but it is not enough for a real mystery.  A real mystery should make the audience lean forward, not merely wait for the reveal.  It should give us the pleasure of suspicion, deduction, failure, and sudden recognition.  It should make us think we might solve it, then punish us for being overconfident.

Television rarely does that anymore.  It gives us crimes, detectives, corpses, and confessions, but not mysteries.  The machinery is there.  The puzzle is missing.

And that is why, when I want a mystery, I usually go back to books.  The corpse may be imaginary, but at least the game is real.