Space travel from New Mexico? Don't hold your breath
On October 22,2010, a smiling Richard Branson spoke to the crowd at the runway dedication for Spaceport America located in New Mexico's forbidding Jornada del Muerto desert. Two years before, his company, Virgin Galactic, had signed a twenty-year lease agreement with the authority to be its primary tenant. Virgin Galactic was going to be in the forefront of the emerging space tourism business, transporting paying passengers to the 100-km edge of space. Spaceport America was to be the hub of the new enterprise.
When Mr. Branson spoke that day, he said, as he had stated many times before, that space tourism would be coming "soon" to New Mexico. Just a few more adjustments were needed to the aircraft, he would say. Ten years and at least 225 million in New Mexico taxpayer dollars later, New Mexicans are still waiting for Mr. Branson to start ferrying tourists to the edge of space.
How did this fiscal fiasco happen to New Mexico taxpayers? It involves many of the usual suspects. Perhaps others can learn from our mistakes.
1. The technology didn't exist in 2008. The genesis of Mr. Branson's idea of taking tourists to the edge of space came from the Ansari X Prize. In 2004, Mohave Aerospace Ventures built a vehicle, capable of carrying three people, that successfully flew above 100 kilometers twice in a ten-day period. It won the ten-million-dollar prize money. Two vehicles were involved: a mother ship that carried the second vehicle aloft and the second vehicle, SpaceShipOne, a rocket plane that drops from the mother ship and then climbs to just above the 100-km elevation. Both vehicles return to Earth and are reusable. They are known as reusable launch vehicles (RLVs).
Mr. Branson licensed the technology from Mohave but determined that the rocket plane had to be larger to be economically viable. The new plane needed to be capable of carrying up to eight people, including two pilots and six passengers.
All kinds of design and manufacturing problems have been encountered by Mr. Branson in trying to create a larger ship (SpaceShipTwo). One disintegrated during a test flight on October 31, 2014, killing a pilot. To date, SpaceShipTwo has not made it to the 100-km elevation mark.
2. Other people spending other people's money on other people. This is Milton Friedman's famous rule #4 about spending money: other people (the New Mexico Legislature) spending other people's (taxpayers') money on other people (the general public). Since the politicians are not receiving any direct benefit from the spending, they have little incentive to be careful and are not!
3. Fairy-tale economic impact statements. To grease the spending skids, the New Mexico Economic Development Department commissioned two economic impact reports to determine the viability of a spaceport in the middle of the New Mexico desert. Both magically were published in late 2005, just before the January '06 legislative session, and both said that the spaceport would bring thousands of jobs and hundreds of millions of dollars of economic benefit to the area. The first was published in October '05 by the Arrowhead Center of New Mexico State University. Try to keep a straight face while reading the Economic Impact Analysis starting in section 2.2.
The second report was published on December 30, 2005 by the Futron Corporation. Pay particular attention to the Economic Impact Assessment Section beginning on page 14 and shake your head in disbelief at the numbers.
Both publications should have been subject to withering criticism.
4. No meaningful political opposition. Perhaps the best controller of profligate government spending at the state level is a vibrant two-party political system with each side closely eyeballing the other. That does not exist in New Mexico, which has had single-party Democrat rule at the state level for most of the last 90 years. The last time Republicans held a majority in both houses of the state Legislature at the same time was 1930. In the 90 years from 1931 through 2020, Dems have held a majority in both houses of the state Legislature for 80 of the 90 years. Dems have held the governorship for 58 of the last 90 years. But even when there has been a Republican governor in that time, he has never held a majority in both houses of the N.M. legislature at the same time, greatly limiting his power.
The Dems approved spending for the Spaceport in the 2006 legislative session.
5. A governor who had presidential ambitions. Dem Bill Richardson, became governor on January 1, 2003 and held the position for eight years. In 2007, he announced his bid for the presidency. His presidential campaign was forgettable, but there is little doubt that he sought to burnish his image with public works projects. Spaceport America was one such project. An even more expensive project, for another discussion, was his Rail Runner commuter train service, which became known as the Rail Roader. New Mexico taxpayers are still on the hook for both.
6. A lazy and incompetent local news media establishment. This writer has lived in New Mexico for over 40 years and cannot recall a single instance where a local news outlet has ever hired an independent economist to do a feasibility study regarding a proposed major state public works project. He is not aware of a single objection to the Spaceport America project from any local newspaper or TV news outlet.
Print media in New Mexico are suffering as they are elsewhere. Fewer and fewer people are reading newspapers, leading to reduced ad revenues, leading to shrinking profits, leading to an inability to pay enough money to keep long time, knowledgeable reporters. The same cannot be said of local TV news. The billionaire owners of the local TV stations are simply unwilling to spend the money necessary to produce a quality news product.
A strong local news media would be an important bulwark against government spending stupidity. Sadly, New Mexico lacks it.
7. Ignored Cassandras. There have been a few voices crying out from the wilderness about the folly of Spaceport America. The most persistent has been the Rio Grande Foundation. For years it has railed against the project and has been largely ignored. Attached is a recent excellent report from the Foundation describing how the Spaceport is using questionable accounting in an apparent effort to hide how much it is costing taxpayers. The report also indicates that in the last twelve years, Spaceport has cost taxpayers $275 million and has brought in $54 million. Ouch.
If you happen to be in southern New Mexico, consider visiting the Spaceport to see New Mexico tax dollars at work. Tripadvisor lists it as the 7th best activity (out of 13) in exciting Truth or Consequences, N.M. (name after a game show).
By the way, for those who don't know, jornada del muerto means journey of the dead man.