Economics isn’t just about money—it’s about how people make decisions in a world of scarcity.

In this episode of the Let People Prosper Show, I talk with Jimmy DeNicco of Rice University about the core principles of economics and how they apply to real-world issues like trade, immigration, regulation, and growth.

If you want to better understand policy, prosperity, and how the world works, this conversation is a great place to start.

🔗 Show notes: vanceginn.substack.com

We’re at a moment where support for free-market capitalism is slipping—and it’s not hard to see why. From both political parties, we’re hearing the same kinds of ideas: cap prices, punish profits, and have the government take a more active role in managing markets. 

Politicians are increasingly trying to pick outcomes, override prices, and direct capital. And history is clear: this doesn’t fix capitalism's weaknesses—it replaces markets with politics.

In today’s episode of This Week’s Economy, I break down why prices and profits matter—how they act as the heartbeat of the free market, sending signals, shaping decisions, and fueling the competition that improves our quality of life. 

You can also catch the full episode on YouTube, Apple Podcast, or Spotify, and visit my Substack newsletter for show notes and more information.

Originally published on Substack. 

Texas families just made the case for school choice better than any politician, think tank, or activist ever could.

The first year of Texas Education Freedom Accounts (think ESAs) drew 274,310 applications by the March 31 deadline. That is not a niche movement or a messaging win, that is a market signal.

Families across Texas are telling lawmakers, loudly and clearly, that they want more control over their children’s education. That should be celebrated. Texas finally cracked the government-school monopoly.

But let’s not pretend the work is finished.

Demand Is Real

This application surge proves what some of us have been saying for years: school choice is real, popular, and badly needed. It also proves something else. TEFA was never truly universal school choice.

From the beginning, I have argued that the right standard is all students, all money, all options. Texas has 6.3 million school-age kids. A truly universal model would let funding follow every child to the best-fit education options, whether that is a district school, charter school, private school, microschool, tutoring, therapies, or homeschooling support. That is the real goal.

TEFA does not get us there yet.

The state appropriated $1 billion for the first year. Based on the official award structure, that likely funds only about 90,000 students, and possibly fewer depending on how many students receive larger disability awards.

Private-school students can receive $10,474, homeschool students receive $2,000, and students with disabilities can receive up to $30,000.

So yes, 274,310 applications is huge. But if the state can fund only around 90,000 spots, then the program reaches only about 1.4 percent of Texas’s 6.3 million school-age kids.

That is not universal choice. That is rationed choice.

The Tiers Tell the Story

The new details make the point even more clearly.

Applications are prioritized through a need- and income-based lottery. The first tier is low- and middle-income students with disabilities. The second tier is low-income families. The third tier is middle-income families. The fourth tier is families above 500 percent of the federal poverty line, and they are limited to just 20 percent of total program funding.

According to the Comptroller’s reported breakdown, nearly three-fourths of applicants are from low- or middle-income families. Nearly 30,000 applicants qualify for the first priority tier, and another 79,000 qualify for the second.

In other words, the full $1 billion will likely be exhausted just serving the first two tiers.

That means the state created a program with overwhelming demand and then funded it so narrowly that most applicants will not receive an account in year one.

Again, that does not weaken the case for school choice. It strengthens it.

Hold Your Ground

For months, too many people acted as if Texas had already reached the gold standard just because it finally passed something. It had not. I argued that partial reforms still leave millions of students behind and that universality, not symbolism, is the real test.

That is exactly what we are seeing now.

Families did not just “like” TEFA. They overwhelmed it. They did not treat it like a boutique side program. They treated it like what it should become: a real alternative to a government-school monopoly that has been overfunded and underperforming for too long.

Texas lawmakers should stop reading this as proof they nailed it. They should read it as proof they underbuilt it.

The Better Model

And here is the bigger point.

A truly universal TEFA could still be cheaper than what Texas already spends propping up the monopoly system.

At a simple top-line comparison, a universal TEFA funded at $12,000 per student for all 6.3 million school-age children would cost $75.6 billion per year. Compare that with the $100 billion-plus Texas spends across public education annually for about 5.5 million government-school students, or roughly $19,000 per student on a broad all-in basis.

That means Texas could move toward a truly universal model, fund every child, expand real competition, and still potentially save at least $25 billion per year compared with the current bloated monopoly system.

And those savings should not disappear into more bureaucracy. They must be used to compress school district property tax rates to zero.

That is a much better path than continuing to pour more money into a government-school monopoly while barely increasing school choice at the margins.

Finish The Job

The lesson from this first year is not complicated. Texas started school choice. Good. Now finish it.

Move from capped choice to truly universal choice. Let funding follow the child, not the system. Stop treating educational freedom as a rationed carveout. Allow a real market where families choose, providers compete, and schools have to earn trust instead of relying on geography and politics.

That is how you get innovation, accountability, and customization. And that is how you stop feeding a monopoly that has had decades and billions of dollars to prove itself.

The demand is here. The families are ready. The waitlist proves it. Now lawmakers should catch up.

Three Takeaways for Policymakers

1. Treat TEFA as proof of demand, not proof of completion.

More than 274,000 applications show Texas families want far more educational freedom than lawmakers funded.

2. Move from capped choice to universal choice.

A program that likely funds only about 90,000 students out of 6.3 million school-age kids is a foothold, not a finish line.
3. Use universal choice to improve education and lower taxes.

A broader TEFA model could cost less than the current monopoly system and help create a path toward compressing school district property tax rates to zero.

The real victory is still ahead: a truly universal education market in the largest red state in America.

Originally published on Pelican Institute.

When the government makes it illegal to open new nursing homes or add beds where people need care, that is not health policy. It is protectionism. 

And in Louisiana, HB 199 would keep that protectionism in place for years longer by extending the state’s moratorium on new nursing facilities and additional beds. Supporters may call that stability. Economically, it is something else: a state-backed restriction on supply that protects incumbent providers while leaving seniors and their families with fewer options at higher costs. 

To be fair, supporters of the bill are not inventing concerns out of thin air. Long-term care is a difficult sector. 

Nursing homes depend heavily on Medicaid financing, face workforce shortages, and serve medically fragile people. Some lawmakers worry that allowing too much new capacity too quickly could strain staffing, weaken existing operators, or create uneven access to labor. 

Those are legitimate concerns. But they are not a convincing case for extending a moratorium. They are arguments for addressing workforce, reimbursement, and quality oversight directly—not for making new supply illegal.

That distinction matters. Louisiana already has a facility need review process to determine whether additional nursing home capacity is allowed. On top of that, it has a moratorium. In other words, the state is not merely regulating quality and safety. 

It is actively suppressing competition. That may help existing providers avoid pressure from new entrants, but it does not help families searching for better care, closer locations, or more modern facilities. It replaces consumer choice with political gatekeeping. 

And Louisiana is doing this just as the state gets older. The Louisiana Department of Health says older adults are the fastest-growing demographic in the state and now make up nearly 20 percent of the population. 

Nationally, the Administration for Community Living reports that someone turning 65 today has nearly a 70 percent chance of needing some form of long-term care. That does not mean every senior will need a nursing home bed, of course. But it does mean demand for long-term services is rising, not falling. 

Extending a moratorium in the face of that reality is like seeing storm clouds and outlawing umbrellas. 

The economic problem is straightforward. When the government restricts supply, it reduces the incentive to compete on quality, price, and innovation. Existing firms become insulated from challengers. New providers with better models, more private rooms, newer facilities, or stronger service have a harder time entering the market. 

Families are left with fewer choices, especially in fast-growing areas. That is not how healthy markets work. Competition is not a threat to quality. In most sectors, it is one of the best ways to improve it.

Louisiana already licenses nursing homes and can enforce health and safety standards directly through the Department of Health’s regulatory framework. Families can also compare providers using the federal Care Compare and Five-Star system.

If the concern is poor care, staffing weakness, or bad inspections, then target those failures. A moratorium does none of that. It is a blunt instrument that avoids the real problem while preserving the market position of those already in it. 

Even the amended version of HB 199 quietly reveals the weakness of the case for extension. Lawmakers added a requirement for the state to gather more data on nursing facility occupancy, hospital days tied to discharge problems, and reasons facilities refuse admissions. 

But this also raises an obvious question: if the state still needs better data to assess whether the moratorium is justified, why extend the moratorium first? That is backward policymaking. The economically sound approach would be to gather the evidence, identify actual shortages and bottlenecks, and then remove barriers where demand is strongest. 

So yes, there are arguments for HB 199. Supporters can claim it offers short-run stability for existing providers in a difficult market. But those benefits are narrow and largely concentrated among incumbents. 

The broader costs are bigger: less entry, less investment, weaker competitive pressure, fewer options for families, and a long-term care system that is less able to adapt to an aging population.

Louisiana does not need more nursing home protectionism. It needs more accountability, more transparency, and more capacity. 

Lawmakers should reject HB 199 and stop confusing government-imposed scarcity with sound policy. A provider that can meet the rules, hire the staff, and earn families’ trust should be allowed to compete.

​One year after the Trump administration’s “Liberation Day” tariffs, the case for protectionism looks weaker, not stronger.

These tariffs did not revive the economy, restore manufacturing, or solve the trade deficit. They expanded government power, distorted price signals, and raised taxes on Americans in the name of helping them.

The Supreme Court’s rejection of the administration’s sweeping emergency-tariff theory mattered legally, but the deeper point is economic: even when tariffs are legal, they are still bad policy. America does not need more executive-led central planning. It needs more free-market capitalism.

Bad Diagnosis

Too many politicians still tell a simple story about the Rust Belt: foreign countries cheated, bad trade deals hollowed out American industry, and tariffs can bring it all back. That story is politically useful, but economically incomplete.

A lot of the damage was homemade. For decades, too many state and local governments in the industrial Midwest piled on forced unionism, bloated spending, high taxes, rigid labor markets, slow permitting, and overregulation.

Businesses first moved from the Frost Belt to the Sun Belt because it was easier to build, hire, invest, and produce there. A BLS review of manufacturing employment in the Southeast found the South Atlantic division increased its share of U.S. manufacturing employment by 5.8 percentage points over the last 30 years.
​
That matters because manufacturing did not simply “leave America.” In many cases, it first moved to places inside America that were freer, cheaper, and more competitive. Amity Shlaes provided a good reminder of these points.

That lines up with deeper research. An NBER study on the Rust Belt’s decline found the region’s share of U.S. manufacturing employment fell from more than half in 1950 to about one-third by 2000, with weaker competition, wage premia, and slower productivity growth playing major roles.

Many places priced themselves out of competitiveness before globalization finished the job. That is an uncomfortable truth, but it is the truth.

Competitive Strength

The best way to deal with adversaries is not to make America less free and more expensive. It is to make America more competitive domestically.

That means lower taxes, restrained spending, lighter regulation, reliable energy, flexible labor markets, secure property rights, and faster permitting. It means making the United States the best place in the world to build, invest, invent, and expand.

If we are worried about China or any other rival, the answer is not to copy the logic of state-directed economics here at home. The answer is to outperform them with openness, productivity, entrepreneurship, and capital formation. That is how free societies win. That is also how they stay peaceful and prosperous.
​
This is the core insight behind much of my own free-trade writing: the stronger America becomes at home, the less it needs clumsy protectionism abroad. This was brought up several times during the discussion with Dominic Pino, Don Boudreaux, and Erik Gartzke.

Trade Reality
​
Protectionists love to point to the trade deficit as if it is a scoreboard for national success or failure. It is not.

The 2025 U.S. international trade data from BEA show total exports rose 6.2 percent to $3.43 trillion, while imports rose 4.8 percent to $4.33 trillion. The overall goods-and-services deficit was $901.5 billion, basically unchanged from 2024. The goods deficit increased to $1.24 trillion, but the services surplus rose 8.9 percent to $339.5 billion.

That is the point: the American economy is more complicated than a bumper sticker. We run a large goods deficit, yes, but we also run a substantial services surplus because the United States remains highly competitive in finance, technology, business services, and other high-value sectors.

The broader balance-of-payments data from BEA make the same point more clearly. In 2025, the U.S. current-account deficit narrowed to $1.12 trillion, or 3.6 percent of GDP, down from 4.0 percent in 2024.

By the fourth quarter, it had fallen to $190.7 billion, or 2.4 percent of GDP, the lowest share since 2021. Meanwhile, the capital account remained tiny, and the United States continued to attract enormous foreign investment flows.

Trade balances reflect saving, investment, and capital flows, not just tariff schedules. You cannot bully those fundamentals with import taxes and patriotic slogans.

Productivity Wins

There is another myth here that needs to die. Many people still talk as if falling manufacturing employment proves America no longer makes things. That is wrong.

Manufacturing output is still near historically high levels, even though manufacturing employment is far below its old peak. The Federal Reserve’s industrial production data show manufacturing output continues to run at a high level, while BLS data on manufacturing employment show factory jobs peaked decades ago and have trended down over time.

That is not mainly because Mexico or China suddenly appeared in the 1990s and 2000s. A large part of the employment decline reflects rising productivity, automation, better technology, improved logistics, and doing more with fewer workers—a trend that was already underway well before the big China shock debates.

That is a good thing, not a bad thing. Prosperity comes from producing more value with less labor tied up in any one sector so workers and capital can shift into other valuable uses.

This is what happened in agriculture, too. America did not become weaker because fewer people worked on farms. America became richer because productivity rose and people were freed up to do other things. Manufacturing follows the same logic.

The goal is not to maximize the number of workers standing in factories. The goal is to maximize output, wages, innovation, and living standards across the economy.

Seen Unseen

This is where Frédéric Bastiat’s lesson on the seen and the unseen still matters. The seen is the politician standing in front of a factory claiming tariffs saved jobs. The unseen is everything else: higher input costs for manufacturers, less business investment, weaker productivity, retaliation against exporters, fewer opportunities for workers, and higher prices for families.

That unseen damage is not theoretical. The Trump administration’s trade policies have been a real drag on economic activity. Real GDP increased at just a 0.7 percent annual rate in the fourth quarter of 2025, according to BEA’s second estimate.

Broad tariffs inject uncertainty, raise costs, scramble supply chains, and reduce the room businesses need to plan and invest. And the burden does not fall mainly on foreign governments.

A Reuters report on new ECB analysis found that U.S. consumers and importers bore most of the tariff burden. So when Washington calls tariffs “revenue,” let’s be honest about what that means: Americans are paying the bill.

Mercantilist Myth

To be fair, the other side is not entirely crazy. They argue that tariffs can protect strategic industries, reduce dependence on rivals, and give domestic production breathing room. In a narrow and temporary national-security context, that argument deserves to be heard.

But that is not how broad tariff regimes work in practice. They do not stay narrow. They do not stay temporary. And they do not stay focused on genuine defense needs. They become an excuse for politicians to pick winners, punish disfavored countries, and manage commerce by decree.

That is why this is really a fight over political philosophy as much as economics.

President Trump, Peter Navarro, and other modern mercantilists treat trade less as voluntary exchange and more as a tool of political control. They see imports as weakness, trade deficits as surrender, and tariffs as strength. But they do not seriously reckon with the tradeoffs.

They focus on the factory they can see and the talking point they want to sell. They ignore the rest of the economy. Mercantilism is just bigger government dressed up in patriotic language. It means more control over prices, supply chains, capital flows, and private exchange. It means less freedom, less peace, and less prosperity.

Old Revenue Model

Historically, America did rely more heavily on tariffs to fund a far smaller federal government. Even then, tariffs were still inferior tax policy because they were narrow and distortionary. But at least there was a clearer revenue rationale in a country without today’s massive income-tax state, payroll-tax state, and sprawling administrative apparatus.

That world is gone. Today, the federal government is already enormous and financed through multiple major tax streams. Adding broad tariffs on top of that is not some return to constitutional simplicity. It is just another tax increase on Americans.

Worse, it is a narrow tax with carveouts, exemptions, favoritism, and political manipulation built into the design. Good tax policy should have a broad base, lower rates, and few if any exemptions so growth is not constantly choked by distortion.

Tariffs do the opposite.

They punish specific transactions, specific industries, and specific households. That is anti-prosperity by design.

Congress Matters

The constitutional issue matters, too. Congress has the power of the purse for a reason. Taxing trade should not become a backdoor way for presidents of either party to legislate by executive order.

The Supreme Court struck down the Trump administration’s sweeping tariffs under emergency authority, and the administration quickly pivoted to Section 122 workarounds reported by Reuters.

Even if every workaround were legal, that would not make them wise. Presidents should have far less unilateral power to tax trade on their own. If Congress wants tariffs, Congress should vote on them and own the consequences.

Better Path

The better answer is not complicated. End the tariffs. Reduce the size and scope of government at the federal, state, and local levels. Lower taxes. Restrain spending. Cut overregulation. End policies that punish work, investment, entrepreneurship, and production.

Let prices work. Let capital move. Let businesses respond to real demand instead of campaign slogans.

That has been my point in Econ 101: Free Trade = More Freedom, Protectionists Are Wrong: Free Trade Is the Path to Prosperity, and my broader trade and free-market work.

If policymakers really want to rebuild industrial strength, they should stop making America expensive, rigid, and hostile to production in the first place.

Trade is not the enemy of American prosperity. Trade is one of its engines. Free people trading freely will outperform politicians trying to manage commerce from Washington every single time.

For Policymakers

1. Stop treating trade deficits like a scoreboard. The current account and financial flows tell a much bigger story than a goods deficit alone.

2. Admit what helped hollow out the Rust Belt. Bad state and local policy drove firms away long before tariffs became the fashionable excuse. Competitiveness still matters.

3. Reject tariff central planning. Even when legal, tariffs are still taxes that distort investment, production, and prices. The economic tradeoffs are real.

4. Focus on productivity, not nostalgia. High manufacturing output with lower employment is often a sign of progress, not decline.

5. Keep Congress in charge of taxing trade. The president should have far less unilateral room to raise taxes through tariff workarounds. That is both a constitutional issue and an economic one.