Articles

Changes in Required Rates of Return on CDs: Unintended Consequences of New Mexico State Treasury Policy

In July 2008 the State Treasurer's Office (STO) released a document titled "CD Program Enhancement Due Diligence." In the document the STO expressed concern with regard to the return and safety of funds in the Certificate of Deposit (CD) Program managed by the State. Historically, funds deposited with state-chartered banks and savings and loans have been required to pay a rate approximately the same as the rate paid on U.S. Treasury bills. The proposed policy would increase the required rate of return to the higher LIBOR. While the logic underlying the proposed policy change was reasonable, a desire to earn a return commensurate with risk, the unintended consequence would be a reduction in the ability of state-chartered financial institutions to fund local economic activity.
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Exports and Job Quality (and a note on New Mexico)

Like all states, New Mexico is interested in economic development. The goals of economic development are many, as are the strategies used to pursue those goals. One important goal is to increase the number of quality jobs in a state, and one strategy for achieving this goal is to promote exports. This brief article summarizes a larger research project, conducted by the authors, that focuses on the connection between state exports and state job quality.
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Talking Points

There is no good news. Recession has come full force to Las Cruces and the recession is very broad based, with only education and health services seeing employment growth. The news statewide was little better. The turnaround locally depends on a national recovery, which is nowhere in sight at this point.
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