New Mexico is a
desperately poor state, if it cost a dollar to go around the world, the state
treasury couldn't finance a bus trip to Oklahoma. Our unemployment rate is the highest in the
nation, and the most valuable export from the state is newly graduated college
students seeking jobs. The annual exodus
of our best and brightest is the educational equivalent to eating your seed
corn.
Recently, I have
come to realize that these problems have historical roots that go back much
further than I had previously realized.
In fact, roots of the problem go back half a millennium.
It is easy to
forget that it wasn't that long ago that New Mexico was part of Mexico for
about half a century. Before that—for
about 300 years—this was New Spain, part of the Spanish Empire. Unfortunately, you can still see the signs.
Spain treated
her colonies as assets to be shorn, strip-mined, and squeezed until the last
peso had been extracted. (This is
exactly the way Enema U still treats her students—perhaps this is where my Alma
Mater learned this trick.)
This extreme
protectionism is called the mercantile system. (Take notes, there will be a quiz next
Friday.). Colonies were expected to produce raw materials and to manufacture
NOTHING that could be purchased from Spain.
Clothing, wine, metal goods, paper products, tools—anything manufactured
you could think of—were forbidden for the Spanish colonies in the New World to
make.
The colonies
were not even allowed to trade with each other.
These severe limitations not only stalled economic development, but left
scars that can still be seen today. An
excellent example is the lack of infrastructure in some of the former Spanish
colonies. There is not—nor has there
ever been—a railroad connecting any two of the countries of Central America,
and until well within my lifetime, there were almost no highways. (Actually, Belize, Guatemala, El Salvador,
and Nicaragua no longer even have internal railroads: most of the track and rolling
stock have been sold as scrap metal.)
The Spanish
colonial policy resulted in some curious supply shortages. Pretend that you live in Santa Fe in the year
1700. The annual governor’s ball is
coming up and you decide you need a new hat.
A local merchant gladly takes your order, and for a small deposit, has
one shipped from Spain (it being illegal to manufacture one in the new world).
The merchant
will have to wait until the next supply wagons depart from Santa Fe, traveling
down the Camino Real to Chihuahua, and then continue on to Mexico City. This means there will be a couple of months
wait, but eventually the ox-drawn wooden carreteras—moving at a pace that would
make Congress look productive—begin traveling southward. A man could easily walk ahead of the oxen for
an hour, then spend the rest of the morning taking a nap while waiting for the
oxcarts to finally catch up with him.
Once the order
finally reaches Mexico City, it will be taken by yet another line of oxcarts
making their way eastward to Vera Cruz, the only port on the east side of New
Spain allowed to trade with Spain.
(This simplifies tax collection and makes smuggling more
difficult.) Spain, worried about
pirates, combined all shipments to and from the New World into single convoys
each way—La Flota—each sailing only once a year. Unfortunately, your order has just missed
this year’s convoy, but will certainly be sent next year!
Assuming that
the ship (a Spanish ship with a Spanish crew, of course!) carrying your order
were to make the perilous crossing of the Atlantic, eventually your order will
reach Seville—the only Spanish port allowed to trade with the colonies—and be
filled by a merchant licensed by the crown.
When the next convoy finally leaves Spain, your new hat will be subject
to an additional tax of 7.5%, the almojarifazgo, an import
and export tax. When the ship finally
arrives in Vera Cruz, this is technically an importation, so the almojarifazgo
will be charged again.
Your hat slowly
makes it way from the coast, by oxcarts, to Mexico City, then Chihuahua, and
finally back to Santa Fe, where the original merchant charges you an additional
10% sales tax, the alcabala, for your hat. After a wait of a mere two years, your new
hat has finally arrived and you discover that not only can you not afford the
costly item, but it’s the wrong size.
Note. Spanish is the sexiest language—I don't care
what the French say. It is a shame that
beautiful words like almojarizgo and alcabala are used to denote taxes. My favorite word in Spanish is
'estacionamiento'. Pretend that Ricardo
Montalban is saying that in his sultry "rich Corinthian Leather"
voice: e-sta-ci-o-na-mi-en-to. It is not
my fault that the word means 'parking lot' and from now on, I think the word
should mean: "moonlight reflected off of still ponds".
Obviously, these
economic policies stifled colonial development, all but forcing the colonists
to turn to smuggling and cheating on taxes.
As revenue to the crown fell, the shortsighted kings behaved exactly
like the inbred Hapsburg monarchs they were—they raised taxes and increased
economic sanctions...And as revenue continued to decline, they raised taxes
again and again.
The inbred
Hapsburg monarchs kept repeating their stupidity until neither they nor the
economy could get it up, and both died out.
The new royal family, the Bourbons, abandoned most of the previous
economic policies, lowering taxes and freeing trade. As it does every time this economic relief
has been tried, the economy took off, trade increased, and government revenue
increased dramatically.
Unfortunately,
the reforms arrived too late to help the impoverished colony at New Mexico,
which by that time, had become a royal patronage colony (meaning that the King
of Spain paid the expenses of New Mexico, recognizing that it was too
impoverished to be self-sufficient).
When Mexico became independent, the king naturally withdrew his
patronage, and economic conditions in New Mexico collapsed to the point that
even the Catholic Church removed its priests.
Today, New
Mexico still wallows in Hapsburg thinking.
The state has high taxes, excessive regulation, and punitive license
fees. We have strong union laws that
protect unions that have never (and probably will never) exist in this
state. The only revenue the state could
consistently count on was from extracting raw resources—usually oil and natural
gas—that we sold to the states that manufactured goods for us.
Suddenly, the
global market is awash in oil and natural gas.
As the price of oil drops below $50 a barrel for oil, our state
treasurer has become as nervous as a whore in church. And just like the Hapsburg monarchs, an
impotent state legislature is attempting to balance the budget by raising
taxes, creating new fees, and restricting licenses.
New Mexico is
still a patronage colony, even though our "charity" no longer comes
from a royal purse. For every $1 the
state pays in federal taxes, it receives $3 from Washington, DC.
To paraphrase
Blanche Dubois when she, like New Mexico, began to lose her grip on reality,
"We have always depended on the kindness of strangers."