​Don’t miss episode 72 of the Let People Prosper show with guest Avik Roy, president of the Foundation for Research on Equal Opportunity (FREOPP).

We discuss America’s biggest economic problems and how to solve them. 

​Avik and I discuss the following and more:

• America's biggest economic issues today pushing it toward fiscal insolvency and how to address them with Freedom Conservatism;
• Why free enterprise and liberty are central to lifting people out of poverty, and how to expand both; and
• The importance of minimizing the government's role at the federal and state levels, issues with populism and the National Conservatism movement, and the “Cost of Thriving.” 

Check out the full show notes at my Substack newsletter and subscribe to get my posts directly in your inbox. 

To show my gratitude this Thanksgiving, I am offering a limited-time special giveaway to one lucky winner!

I hope you all had a wonderful holiday yesterday, and thank you for tuning in to today’s 36th episode of “This Week’s Economy.”

This episode includes a special opportunity for one of you to win a complimentary year-long subscription to this newsletter, which is essential in light of my transitioning to a paid format soon.

Click the link to enter the giveaway. 

​Texas lost jobs in October and faces major headwinds with a weak U.S. economy and a poor performance by this year’s 88th Legislature. There is a better way.

• This included the largest spending increase, largest corporate welfare increase, largest amount passed in constitutional amendments, and subsequent second-largest property tax cut in the state’s history.
• Texas has yet to pass universal education savings accounts during the ongoing fourth special session called by Gov. Greg Abbott (R), and likely will not pass them until at least 2025.
• Texans expect more from the largest red state in the country.

 
Free-market capitalism is the best path to let people prosper, as it is the best economic institution that supports jobs and entrepreneurship for more people to earn a living, gain skills, and build social capital.
 
Table 1 shows Texas’ labor market for October 2023 from the U.S. Bureau of Labor Statistics. These data compare the following important dates: 1) June 2009—Dated trough of that U.S. recession, 2) February 2020—Dated peak of the last U.S. expansion before the COVID-19 shutdowns, 3) April 2020—Dated trough of the last U.S. recession, and 4) October 2023—Latest data available.

​The labor market declined last month continuing a weakening trend in Texas.

• The payroll survey shows net nonfarm jobs in Texas declined by 1,300 last month, resulting in the first decline after employment increases in 40 of the prior 41 months. This brings employment down to 14.04 million, breaking the streak of record highs for 24 straight months.
• Compared with a year ago, total employment was up by 391,500 (+2.9%)—the third fastest growth rate in the country—with the private sector adding 339,400 jobs (+2.9%) to 11.98 million and the government adding 52,100 jobs (+2.6%) to 2.07 million.
• Figure 1 shows that inflation-adjusted average weekly earnings are increasing in some industries in Texas, with inflation still running hot at least at 3.2%. Many Texans are struggling to keep up with less purchasing power from excessive spending by Congress, excessive regulations by President Biden, and excessive money printing by the Federal Reserve. But these are exacerbated by excessive state and local spending, high local property taxes, restrictive local zoning, and other factors in Texas.

​

• The household survey shows that the labor force participation rate is higher and the employment-population rate matches those in February 2020, but the former is well below December 2007 at the start of the Great Recession.
• The state’s unemployment rate of 4.1% is higher than the U.S. rate of 3.9% but this is a weak indicator as it’s highly volatile based on changes in the labor force, and the labor force continues to increase in Texas unlike in many states.
• Shortages in the labor market are across the economy as many still sit on the sidelines from profligate safety nets primarily from the federal government over the last three years.

 
The economy continues to expand in Texas though there are headwinds.

• The U.S. Bureau of Economic Analysis (BEA) reported the real gross domestic product (GDP) by state for 2022.
• Figure 2 shows Texas had the fifteenth fastest real GDP growth of +3.0% to $1.94 trillion in 2023:Q1 (above the U.S. average of +2.0% to $20.28 trillion). 

​

• The BEA also reported that personal income in Texas grew by 6.7% to $1.94 trillion in 2023:Q1 which was the 22nd highest in the country. This is above the U.S. growth rate of 5.1% (to $22.51 trillion).

 
As Texans face an affordability crisis from high inflation and high property taxes and an uncertain future with the U.S. economy likely in a deepening recession, the Legislature provided some tax relief but not nearly enough because of excessive spending.

• Other states are cutting, flattening, and phasing out taxes, passing responsible budgets, and passing school choice, so Texas should have made bold reforms to support more opportunities to let people prosper, mitigate the affordability crisis, and withstand destructive policies out of D.C.
• Figure 3 provides a comparison of the size of government, economic freedom, and economic outcomes among the four largest states and nearby Louisiana. 

• While Texas does relatively well, there is much more to do for more liberty and prosperity.

The Texas Legislature should improve the Texas Model by:

• Passing pro-growth policies that:
  • Spend Less: Lower state government spending and pass responsible local spending limits.
  • Tax Less: Start eliminating local property taxes with historic surpluses at the state level to buy down school district M&O property taxes and at the local level by using their own surpluses to buy down their own property tax rates.
  • Regulate Less: Improve workforce development, remove barriers to work, reduce occupational licensing, reform safety nets, and enact universal school choice.

 
Strengthening the Texas Model will help Texans better resist D.C.’s overreach, be more competitive with other states, and, more importantly, flourish more for generations to come.
​

Don’t miss episode 71 of the Let People Prosper show with Dr. Norman Horn, president of the Libertarian Christian Institute and co-author of “Faith Seeking Freedom.”
​
We consider controversial questions to help Christians understand how to glorify God in the marketplace.

Dr. Horn and I discuss the following and more:

• How individual liberty and free markets provide abundant ways to glorify God;
• Whether or not Jesus would be socialist and what the role of government and churches should be in caring for "the least of these”; and
• Encouragement for Christians in their careers, reasons for optimism for the future, separating conservative politics from Christianity.
  
  Full show notes here. 

Originally published at Econlib.

President Biden signed a sweeping executive order to “harness” and “keep” artificial intelligence, two words you never want to hear from the government. This new regulation will inhibit Americans’ flourishing because restricting free markets never works.

The EO is reported to ensure safety, equity, and responsible development. While these goals may appear laudable, delving deeper reveals that this motion will hinder economic progress and stifle the innovation it aims to promote. That’s why policies must always be judged by their results rather than their intentions.

Details of the order’s objectives include safety tests, industry standards, and government oversight to address potential risks associated with AI. Forcing AI companies to conduct safety tests before going public, known as “red teaming,” will significantly slow the development and deployment of AI technologies. 

It’s well-established that innovation thrives in an environment of minimal regulatory interference called “permissionless innovation.” So introducing these bureaucratic hurdles will hinder fast-growing AI and all the industries that have begun to rely on it. Medicine and biotech, in particular, have realized remarkable potential with AI that has life-saving ramifications.

But Biden’s overreaching EO wants to harness that. 

As is the case with many regulations, the EO comes at not just a cost to the individuals it affects but to the government’s pocketbook as well. 

As part of its endeavor to “preserve individuals’ privacy,” the administration will fund the Research Coordination Network.

At a time when wages aren’t keeping pace with inflation and the average American family is losing real money due to a suffering economy, the government adding an expense like this is an insult to injury. Congress needs to reduce spending, and the Fed needs to slash its bloated balance sheet now more than ever. 

One of the most troubling aspects of the EO is its emphasis on regulating AI in the workforce out of concern for the technology displacing workers. Although there has been some uproar out of concern over AI destroying jobs, research shows that only 34% of Americans fear job displacement due to AI. 

And for good reason. 

Not only now but historically, concerns about new technologies displacing workers have been overblown. A Harvard paper published in 2013 predicted that by 2023, almost half of all American jobs would be replaced by AI. Clearly, the calculation has not come to pass. 

That’s because technology is a tool, not a threat. Frequently, implementing AI and technology like it allows humans to do more complex or human-facing jobs that AI can’t do or that people don’t want AI to do. 

AI is a transformative technology that has the potential to revolutionize various industries, from healthcare to finance and beyond. In a free market, competition drives innovation and efficiency, benefiting consumers and businesses. Restricting AI through excessive regulations and government oversight threatens this dynamic.

While the intention behind Biden’s EO on AI may be to ensure responsible development and safe use, the economic consequences could be dire. To maintain America’s leadership in AI and foster economic growth, lawmakers and leaders must avoid overregulation and unnecessary restrictions on this transformative technology. 

Instead, we should encourage innovation, protect intellectual property, and ensure that AI remains a powerful tool for driving economic prosperity and improving the lives of all Americans. 

In the fast-paced world of technology, the last thing we need is government interference that hampers progress.