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📈 Inflation remains high at 3.3% y/y, and the Fed's slow response is not helping. 📊 The latest jobs report shows a shift to part-time work and declining labor force participation, with real wages declining. 🏡 The Texas GOP's priorities miss key issues like spending restraint and property tax elimination, which are crucial for economic growth. Listen, like, share, and subscribe. Check out my newsletter for show notes and more at www.vanceginn.substack.com. It's a pleasure to speak with the Texas Aggregates and Concrete Association again and enjoy the great resort here with my wife and three young kids. While aggregates and concrete may not always be in the spotlight, they are the bedrock of our infrastructure, forming the foundation upon which we build our homes, businesses, and communities.
Reflecting on my journey, I realize how essential the right direction and strong institutions are in shaping our paths. Much like the solid foundation of concrete, institutions give us the stability to build and grow. Like the economy, my life has been a series of peaks and troughs. In my younger years, I grew up in a low-income, single-mother household in South Houston as my dad had epilepsy, and they divorced when I was five years old. I went to private school from K-2 grades, public school from 3-6 grades, and home school from 7-12. Unlike many of you, I took many risks during my teenage years and began playing drums in a band called "Sindrome," living the rockstar life. But a near-fatal car accident in 2002 was my wake-up call, one of several but the one that turned me toward a brighter path. Through this experience, a month in bed with many bumps and bruises, and a lot of prayer, I found my purpose: to help others through my calling to let people prosper. We find ourselves at a pivotal point in our country and in Texas. The recent elections tell us that there is a clear call for change in the Lone Star State. The upcoming November elections will be another opportunity for the country to steer towards a path of prosperity or continue down a troubling road. As an optimist, I believe in our potential, but I also recognize our country and state's many economic, political, and cultural issues. Policy Uncertainty and Economic Volatility At the national level, we face several economic challenges. The Biden administration has been keen on infrastructure spending, which includes the $1.2 trillion Infrastructure Investment and Jobs Act. While this aims to rejuvenate our infrastructure, it also raises concerns about efficiency and the role of government in these projects, and the fact that we are running deficits higher than that per year with the national debt at nearly $35 trillion and net interest payments of $1 trillion exceeding national defense expenditures of about $860 billion. Excessive government spending, increased regulation, and interventionist policies often lead to inefficiencies and distortions in the market. Milton Friedman, my favorite economist, warned about the dangers of heavy government involvement, advocating instead for free-market solutions that empower individuals and businesses. Election years heighten policy uncertainty, which can drive economic volatility. Businesses and investors become cautious, waiting to see which policies will prevail. This hesitation can slow economic activity, affecting everything from job creation to investment in new projects. For the aggregates and concrete industry, this means potential delays in infrastructure projects and fluctuations in demand. Milton Friedman once said, "If you put the federal government in charge of the Sahara Desert, in five years, there’d be a shortage of sand." This sharp but insightful remark underscores the inefficiency that often accompanies government intervention. In his view, infrastructure projects should be managed by private entities with a direct stake in the outcome and can respond more agilely to changes and needs. Here in Texas, we are not immune to these challenges. Our state is known for its robust economy and low taxes, but we're grappling with excessive government spending and high property taxes. The Texas Comptroller's report highlights how our spending on transportation is around $10 billion annually. While infrastructure is crucial, we must be mindful of how these funds are used to ensure they generate real value for taxpayers. Weak Labor Market Amid Headlines of Strength Despite headlines showing strength, the U.S. labor market reveals underlying weaknesses. Nearly half of Americans think we are in a recession, reflecting a disconnect between reported statistics and personal experiences. Real average weekly earnings have declined by nearly 4% since January 2021, squeezing household budgets and diminishing purchasing power. The labor force participation rate remains low at 62.5%, significantly below the February 2020 level. If participation were the same as it was then, the unemployment rate would be closer to 6% rather than the reported 4% today. Texas, however, leads in job gains, which is a testament to our state's resilient economy. Yet, we must acknowledge that the 25% increase in the two-year state budget last year was excessive. This surge in spending did not provide sufficient property tax relief, which is critical for maintaining economic vitality and keeping Texas attractive for businesses and residents alike. Moreover, we must prioritize universal school choice next year to ensure educational opportunities that meet diverse needs and drive future economic growth. Election Year Volatility During election years, the stakes are even higher. Uncertainty about future policies can cause volatility in markets and economic performance. For instance, debates over infrastructure funding, environmental regulations, and tax policies can create an unstable business environment. Companies may delay or cancel projects, affecting the demand for aggregates and concrete. This uncertainty trickles down, impacting jobs, investments, and overall economic health. Aggregates and concrete are essential for the development and maintenance of our infrastructure. These materials for things like highways and homes are our physical landscape's backbone. However, it's crucial to approach their use smartly. We don't need to resort to industrial policies with high costs and trade-offs, burdening taxpayers. Instead of a top-down approach, which often fails due to bureaucratic inefficiencies, we should consider a bottom-up approach to transportation projects. This includes government projects, public-private partnerships, and private projects. A significant portion of infrastructure could be managed through private toll roads. While my ideal vision leans heavily on privatization and tax cuts, I recognize that a balanced approach is more realistic in the current environment. Public-private partnerships can bring innovation and efficiency, reducing the burden on taxpayers while still delivering essential infrastructure. Let me share an example from my work. My research finds that private toll roads can often be built faster and cheaper than public projects. Private companies are directly incentivized to minimize costs and maximize efficiency. For instance, the LBJ Express project in Dallas, a public-private partnership, was completed ahead of schedule and under budget, demonstrating the potential benefits of such collaborations. There is also a need to move to design-build for projects in Texas rather than today's more costly and time-consuming design-bid-build approach. Additionally, Texas is experiencing significant population growth, with more people moving to the state, increasing the demand for our infrastructure. The Texas Department of Transportation (TxDOT) is investing in expanding highways and improving ports to accommodate this growth. Projects like the $7.5 billion North Houston Highway Improvement Project aim to address these demands. However, we must ensure that these investments are managed efficiently and effectively. Role of Institutions and Central Planning Another key aspect is the role of institutions. Friedrich Hayek, in his book "The Road to Serfdom," cautioned against the overreach of central planning. He emphasized that central planning often leads to inefficiencies and a loss of individual freedoms. His insights are particularly relevant today as we navigate the complexities of modern infrastructure development. To truly flourish, Texas needs to embrace more free-market capitalism and resist the creeping influence of socialism in our economy. This applies to transportation and beyond. By focusing on the efficient use of resources, reducing regulatory burdens, and fostering competition, we can build a more prosperous future. The bottom-up approach not only ensures better utilization of resources but also empowers local communities to take charge of their development, aligning projects more closely with the actual needs and priorities of the people. Consider the example of toll roads in other states. Using private toll roads in Virginia has significantly improved traffic flow and reduced congestion in previously bottleneck areas. This model can be replicated in Texas, where traffic congestion is growing, especially in urban areas. By allowing private companies to manage and maintain these roads, we can ensure they are kept in optimal condition without continuously draining public funds. Furthermore, private toll roads can be a source of innovation. Companies can introduce advanced technologies for traffic management and toll collection, making the entire system more efficient. For example, using electronic toll collection systems in Florida has greatly reduced vehicles' time at toll booths, enhancing the overall travel experience. However, this doesn't mean we should eliminate public involvement in infrastructure projects. There are instances where government intervention is necessary, especially in projects that may not be immediately profitable but are crucial for public access and economic activity. This is where public-private partnerships come into play, allowing us to leverage the strengths of both sectors. The government should act as a facilitator rather than a direct manager of projects. By setting clear regulations and standards, it can ensure that private companies operate fairly and efficiently while also protecting the interests of the public. This approach can help us avoid the pitfalls of excessive government control while still reaping the benefits of private sector efficiency. Paul Krugman and other progressives might argue that significant government intervention is necessary to address market failures and ensure equitable outcomes. They believe that without government oversight, critical infrastructure could suffer from underinvestment, and social inequalities could worsen. While these points are worth considering, history has shown us that excessive government control often leads to inefficiencies, higher costs, and reduced innovation. Learning from Failures and Future Outlook My journey from poverty to rockstar to entrepreneurial economist taught me the value of strong institutions and the importance of aligning personal purpose with societal needs. This principle applies to our infrastructure as well. Just as a solid foundation is critical for a stable building, a robust institutional framework is essential for a thriving economy. We must ensure that our policies and investments in infrastructure reflect this understanding. As we look toward the future, we must remain vigilant against the encroachment of socialist policies that threaten to undermine the free-market principles that have made Texas a beacon of prosperity. Instead, we should champion policies that promote individual liberty, economic freedom, and responsible stewardship of resources. Failure provides us with valuable lessons, and too often, people want to mitigate this by expanding government intervention, which can be detrimental to our learning and growth. We are at a critical juncture in our state's history. The recent elections have shown us that Texans are ready for a change. The upcoming November elections present another opportunity to reaffirm our commitment to the principles that have made Texas great. While I am optimistic about our future, we must address the economic, political, and cultural challenges that threaten our way of life. Election Year Volatility and Policy Uncertainty One of the most pressing issues is the rise of big government. Across the political spectrum, there is a growing tendency to rely on government intervention to solve problems. This trend is particularly concerning in Texas, where we have traditionally prided ourselves on independence and self-reliance. Many of you might be demanding the government give you handouts or reap the benefits of federal, state, or local spending, but all this comes from taxpayers' pockets. We must try a different approach. Election year volatility adds another layer of complexity. Businesses and investors are left guessing about the future as policies swing with the political tide. This uncertainty can stall projects, delay investments, and increase costs. The aggregates and concrete industry, heavily reliant on long-term planning and stability, feels these effects acutely. Conclusion In conclusion, aggregates and concrete are vital for Texas's growth, but their smart use is paramount. Let's leverage the strengths of the free market, prioritize efficiency, and ensure that our infrastructure investments truly benefit Texans. As we progress, I am eager to collaborate with any of you on projects aligning with these principles. Together, we can build a stronger, more prosperous Texas. For those interested in further discussions on economic policy and free-market solutions, I invite you to check out my podcast, the Let People Prosper Show on all major platforms, and my Substack newsletter at vanceginn.substack.com, where I delve into these topics in greater detail. You can also visit my website, VanceGinn.com, for more information and resources. Thank you for your time and attention. Let's work together to build a future where smart infrastructure investment and strong institutions pave the way for a prosperous Texas. Originally published at AIER.
Both major presidential candidates, Joe Biden and Donald Trump, have leaned towards protectionism, a stance recently echoed by Terry Schilling in The American Conservative. Unfortunately, this perspective misses the mark. Protectionism is not the solution to revitalize American manufacturing or the economy. The real culprits are flawed internal policies — excessive government spending, high taxes, and stringent regulations — that stifle growth and innovation. Politicians from both sides of the aisle often scapegoat countries like China and Mexico for the decline in US manufacturing. This narrative overlooks reality. Technological advancements and productivity gains are the primary drivers of change in manufacturing, and that’s a good thing for the many beneficiaries at the expense of the few. Industrial production in manufacturing has remained relatively flat, indicating stable output despite economic fluctuations, while manufacturing employment has declined significantly, reflecting the sector’s increased productivity and automation. In short, we don’t need as many hard jobs to provide the same output, and those displaced individuals can find better avenues to flourish, even with tough transitions. While it would be great if there were a way to protect everyone’s job, this is a fool’s errand resulting in control by politicians and bureaucrats in government at the expense of everyone else. Free-market capitalism is needed now more than ever, not big-government socialism, which is already sending us down the road to serfdom. American manufacturing’s decline is largely due to domestic policies that reject free-market capitalism, thereby hindering economic growth. Progressive policies have led to excessive government spending, high taxes, and overregulation. The federal government is spending about 25 percent of GDP and running nearly $2 trillion deficits, including paying about $1 trillion in net interest payments annually, even with record-high tax collections. Add to this how the Competitive Enterprise Institute reports federal regulations cost the US economy $1.9 trillion annually, equivalent to 7 percent of GDP. Spending and regulations shackle about one-third of our economy, creating perverse incentives for businesses and workers to compete and innovate. The Trump administration’s efforts to boost manufacturing through tariffs led to trade wars that aimed to bring jobs back to the US. These measures backfired, however, increasing costs for American businesses and consumers, as tariffs are just taxes on Americans. Manufacturing output saw little sustained improvement, and employment gains were modest and short-lived. Deficit spending, which contributed to an appreciated currency from foreigners’ demand for the US dollar, made it cheaper to purchase foreign goods, exacerbating the trade deficit. The trade deficit expanded even after Trump imposed tariffs on Chinese goods. Similarly, the Biden administration’s attempts to revitalize the sector through initiatives like the American Jobs Plan and the Inflation Reduction Act have yet to do more than drive up the deficit and prop up specific markets. Despite potentially good intentions, these policies have yet to deliver the promised results, often perpetuating the same issues of overregulation and high spending. The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA and mentioned in the piece, introduced more protectionist measures than its predecessor. The USMCA’s stringent labor and content rules have complicated trade and increased production costs, undermining its effectiveness in promoting free trade. These provisions counter what should have been done to promote more trade and prosperity. It is wise to remember that free trade has provided the best opportunities for people to prosper and has significantly reduced extreme poverty globally, including in China. America should not isolate itself from other countries, as we benefit from a growing global demand for our products and the supply of goods we can purchase from abroad. Consumers and producers in America are better off with more domestic and international trade. As we don’t want to produce everything we consume daily, trading with others is the most efficient way to meet our needs. Our national debt, driven by excessive government spending, is a significant economic burden. This debt will continue to grow without the resolve to cut spending and implement a strong spending limit. The Federal Reserve’s monetary policy, which has reduced purchasing power and higher inflation, also impacts manufacturing and should be regulated through a monetary rule. The PROVE IT Act aims to ensure that carbon emissions from imports are accurately measured. Still, the underlying assumption of a need to tax carbon dioxide — a necessary component of life — is flawed. Pigouvian taxes are problematic because they often target the wrong factors at incorrect tax rates, essentially serving as tools for government overreach rather than effective economic policy. The focus should be on minimizing government control over economic actions, which create more problems. A carbon tax or one of its spinoffs is a misguided attempt to control what the EPA doesn’t consider a pollutant, leading to worse outcomes for everyone, especially the poor. Another way to improve relationships with countries and put more collective pressure on China to liberalize while meeting the needs of consumers and producers in America would have been to approve a version of the Trans-Pacific Partnership (TPP). This trade agreement negotiated by the Obama administration allowed expanded free trade with 11 other Asia-Pacific countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam). By partnering with multiple countries, America could have promoted free trade practices that fostered a more robust economic environment that competes with China, Russia, and other potential adversaries. The TPP, as detailed by the Council on Foreign Relations, aims to enhance trade and economic integration across the Asia-Pacific region, providing significant benefits to all member nations. The TPP would reduce tariffs, establish common trade standards, and open new markets for American goods and services, ultimately leading to greater economic growth and job creation at home. Unfortunately, Trump rejected the TPP when he took office in 2017 instead of trying to negotiate the TPP better. While America was left out, the other 11 countries joined trade agreements after TPP’s demise, a major setback for Americans that could have been avoided. Revitalizing American manufacturing requires addressing internal policy failures rather than blaming foreign competition. We can ensure long-term prosperity by reducing government interference, embracing free trade, and fostering a competitive environment. The better path forward with fewer trade-offs lies in free-market principles, which have the power to drive innovation, efficiency, and economic growth. It’s time to shift the focus from protectionism to fostering a robust, open market that benefits everyone. In This 100th Episode, Dr. Norman Horn, founder and president of the Libertarian Christian Institute, and I celebrate the 100th Let People Prosper Show episode and explore:
📜 Limited Roles of Government: What are the true, limited roles that government should play in our lives? 🎉 Libertarian Convention Recap: How was the Libertarian Convention, and what were the key takeaways? 🔍 Policy Comparisons: Comparing the policies of Joe Biden (Democrat candidate), Donald Trump (Republican candidate), and Chase Oliver (Libertarian candidate). ⚖️ Big-Government Conservatism: Why are Conservative Nationalists and Christian Nationalists essentially big-government, old-school progressives? 🌟 Future of Liberty: What should the future look like for liberty and prosperity? Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for show notes and more insights from me, my research, and ways to book me on your show. Did you know…
🏡 91% of Gen Z see housing affordability as crucial in choosing the next president. 📊 Recent reports show a move to part-time work and declining full-time positions, with inflation-adjusted purchasing power falling. 🏦 The FDIC's complex regulations and internal issues hinder bank efficiency and increase costs. Listen, like, share, and subscribe to find out and learn much more. Originally published by American Energy Institute. Your browser does not support viewing inline PDFs. Click here to view the PDF. Originally published at OCPA.
In 2022, Oklahoma lawmakers passed the state’s “Energy Discrimination Elimination Act” (EDEA), which requires the office of the state treasurer to conduct a review of firms to identify those that boycott investments in oil-and-gas companies due to their embrace of so-called “Environmental Social Governance” (ESG) policies. State entities, including state pension funds, cannot contract with firms on that list. In April, the Oklahoma Rural Association released a study that claimed the Energy Discrimination Elimination Act has increased municipal borrowing costs by 15.7 percent. But now a new study, released by the American Energy Institute, has examined the Oklahoma Rural Association’s work and found it riddled with flaws and omissions that skewed its findings. “As we release this comprehensive analysis, it’s clear that the Energy Discrimination Elimination Act of 2022 is crucial for safeguarding Oklahoma’s economic interests and ensuring sound fiduciary practices,” said Jason Isaac, CEO of the American Energy Institute. “Our research debunks the flawed claims against the EDEA, highlighting its role in protecting vital energy sectors and promoting financial stability for the state.” “Fact versus Fiction: Examining Oklahoma’s Energy Discrimination Elimination Act of 2022” was authored by Vance Ginn, former chief economist of the White House’s Office of Management and Budget and a fellow at the American Energy Institute, and Byron Schlomach, an economist with 30 years’ experience in state-level public policy who served on the Piedmont City Council and was the director of the 1889 Institute in Oklahoma. The two men examined the “Energy Discrimination Elimination Act” and the Oklahoma Rural Association’s critique of the law, and found the critique deeply flawed. “The Oklahoma Rural Association’s report on the state’s Energy Discrimination Elimination Act and its purported impact on municipal borrowing costs contains significant methodological flaws,” Ginn and Schlomach write. “It fails to establish a causal relationship between the EDEA and higher municipal borrowing costs. Changes in federal policy with respect to the oil industry, first positive under President Trump and now decidedly negative under President Biden, are more plausible explanations for Oklahoma’s relatively increased borrowing costs. Furthermore, the push towards ESG investing overlooks the opportunity costs associated with divesting from reliable energy sources like oil and gas, which are crucial to Oklahoma’s economy.” Due to the flaws in the Oklahoma Rural Association study, Ginn and Schlomach conclude that it “should not be used as a reason to question or delay the implementation of protections put in place by the elected representatives of states like Oklahoma and Texas against asset managers using the assets of those states to push ESG-aligned political objectives.” Instead, they write that policymakers should “ensure that investment decisions prioritize profitability and fiduciary responsibilities over politically driven, subjective ESG criteria through increased transparency, independent audits, and clear rules. This approach will better safeguard economic interests and promote sustainable growth, benefiting the broader community and the environment.” Among the problems that Ginn and Schlomach identify in the Oklahoma Rural Association report is the fact that a comparison of Oklahoma municipal bonds with a national index “shows Oklahoma’s interest rates varied by less since September 2022, before the law went into effect in November 2022 and when the Treasurer issued the restricted financial companies list in May 2023.” “This indicates that EDEA did not cause interest rate movements and that the paper’s results come from cherry-picking the data and specific states,” Ginn and Schlomach write. The two economists also write that the Oklahoma Rural Association report overlooked other important factors, “such as the upward trend in interest rates,” and also contained “methodological challenges of correlation versus causation.” The Oklahoma Rural Association’s report claims the EDEA has increased municipal borrowing costs by approximately 59 basis points (0.59 percent), a 15.7 percent increase compared to some states, and attributes that increase to reduced financial competition that the report suggests has been created by the EDEA. However, Ginn and Schlomach note that the Oklahoma Rural Association report notably omitted New Mexico from the selected neighboring states examined, “raising questions about whether the chosen states moved in parallel with Oklahoma before the EDEA’s implementation.” In addition, they note that “a substantial outflow of funds from municipal bonds” occurred nationwide in 2022 and 2023. Ginn and Schlomach note that Oklahoma’s municipal borrowing interest rates were “trending upward long before the EDEA’s passage and implementation.” And the two economists argue that the Oklahoma Rural Association report fails to address the negative impact of ESG investing strategies on Oklahoma. “Divesting from reliable energy sources like oil and gas in favor of renewable energy projects often result in lower returns and economic disruptions,” Ginn and Schlomach write. “States with significant economic output from the oil and gas sector, such as Oklahoma and Texas, face significant spillover effects from reduced investment in these industries. These spillover effects include job losses, reduced economic activity, and lower tax revenues, which ultimately create ripple effects on the broader state economy.” Further, using ESG criteria in public pension funds and state investments “can lead to lower financial performance and increased risks, as highlighted by critiques and evidence.” “EDEA is specifically designed to counteract the growing trend among financial institutions to shun investments in fossil fuel industries due to ESG pressures,” Ginn and Schlomach write. “By enforcing this law, Oklahoma ensures that its oil and gas sectors, which are crucial to its economy, remain robust and well-funded.” Originally published at Kansas Policy Institute.
As Kansas gears up for a special legislative session in two weeks, the state stands at a pivotal point. Governor Laura Kelly’s call to reconvene the legislature after vetoing three key tax relief bills this year, let alone what she vetoed previously, indicates the struggle to pass pro-growth policies. For Kansas to thrive, it must pursue significant income tax reductions complemented by responsible budgeting. Despite an appealing low unemployment rate of 2.8%, a deeper look at Kansas’ labor statistics reveals significant challenges. The labor force participation rate, the share of residents either working or actively looking for work, has dropped to a historic low of 66.1% since 1977, and the workforce has been flat since 2008. This stagnation points to a need for reform policies that do more than temporarily boost employment numbers—they must encourage sustainable work and investment. Current tax relief discussions, including proposals to eliminate the state’s 2% sales tax on groceries, reduce the current 20 mill state property tax levy for K12 education, and end the state income tax on Social Security benefits, though politically attractive, do not provide the necessary economic improvements as cutting personal income taxes:
In contrast, flattening and cutting income taxes would dramatically improve Kansas’s economic environment. As noted in a recent report by The Buckeye Institute for KPI, this sort of pro-growth tax policy in Kansas would make the state more attractive to entrepreneurs and skilled workers, fostering an ecosystem ripe for innovation and investment that increases economic growth and job creation across sectors, contributing to a wider tax base and more tax collections. Kansas must also embrace responsible budgeting for these tax cuts to be sustainable. The state should learn from the lesson of excessive spending during the last decade’s troubles, which led to deficits and foolish tax hikes. This can be achieved by spending on only limited roles outlined in the state’s constitution, providing opportunities for strategic budget cuts and growth of no more than the rate of population growth plus inflation. This balanced approach helps ensure fiscal sustainability without compromising essential services. The upcoming special session is a golden opportunity to initiate significant economic reforms. By adopting bold income tax cuts and responsible budgeting, Kansas can set a prosperity cycle that benefits all residents. This approach goes beyond temporary fixes to establish a solid foundation for future economic stability and growth, which can’t be achieved with the other proposals. Now is the time to implement visionary reforms that position Kansas as a smart, growth-oriented fiscal policy leader. This special session is ideal for Kansas to boldly step into a future marked by robust economic health and lasting prosperity. By seizing this moment to enact significant tax cuts and set the table for disciplined spending, Kansas can ensure its competitiveness and prosperity for generations. Let this session be remembered when Kansas took bold steps to secure its economic future, setting a precedent for fiscal responsibility and proactive economic strategies that lead to a flourishing state. Join my conversation with Dr. Judge Glock, director of research and a senior fellow at the Manhattan Institute, on the latest Let People Prosper Show podcast.
We explore: 🗽 America's Economic Landscape: What's working and what's not? 🏠 Housing Market Fixes: Key issues and practical solutions. 💸 Debt Crisis Solutions: National and local debt challenges and how to tackle them. Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more. Join me for Episode 63 of "This Week's Economy" as we dive into key economic issues affecting us all! Here are the highlights:
📈 Inflation Impact: The Federal Reserve's interest rate hikes influence borrowing costs and the broader economy. 🏡 Housing Crisis: Exploring solutions to skyrocketing housing prices and making homeownership accessible again. 🤠 Texas Reforms: Recent election results, the push for universal school choice, budget cuts, and property tax elimination in Texas. Thank you for listening! Please like, share, and subscribe. For more info, subscribe to my newsletter at vanceginn.substack.com and check out vanceginn.com. Stay informed, stay free, and let's keep working together to let people prosper! Originally published at TFR.
Texas at the Forefront: Leading the Charge but Facing New Challenges Texas continues to blaze trails in the labor market, with recent data from the Texas Workforce Commission showing a robust addition of over 42,000 jobs and an unemployment rate of 4% in April. This included 41,000 jobs in the productive private sector and 1,100 in the government sector. Coupled with an impressive gain of 306,000 jobs (+2.2%)since last April, these figures underscore Texas’ economic vitality and its role as a leader in the national economy. However, as other states ramp up their economic policies, especially in red states, and the burdens of federal missteps weigh heavily on Americans, Texas must renew its commitment to pro-growth, limited government principles to maintain its leadership position. In April, the Lone Star State’s labor force expanded and demonstrated resilience in several key sectors, contributing significantly to the state’s economic dynamism. Employment grew the most in percentage terms over the last year in other services (+6%) and professional and business services (+3.3%), but government (+3.3%) grew too much. This private sector growth is a testament to Texas’ business-friendly environment and its ability to attract and retain top-tier talent and enterprises. Despite these achievements, there is an emerging need for vigilance as other states begin to adopt reforms that could rival Texas’ appeal. Nationally, the labor market shows varying degrees of recovery, with some states quickly catching up by implementing aggressive tax cuts and regulatory reforms to support economic growth. Red states like South Carolina (+3.4%), Florida (+2.5%), and Missouri (+2.5%) are thriving, with job growth rates that challenge Texas’ dominance. Texas has long been a bastion of economic freedom, which has fostered an environment where businesses and individuals can thrive. However, the state now faces the dual challenge of maintaining its competitive edge while also addressing the economic pressures exerted by federal policies and economic management—or mismanagement—by the Biden administration, Congress, and the Federal Reserve. These challenges include inflationary pressures, federal spending levels, and monetary policies that have left many Texans feeling the pinch. Policy adjustments are essential to address these challenges and keep Texas at the forefront of job creation. First, Texas must return to limited government. Reinforcing and expanding upon policies that have proven successful, such as reducing regulatory burdens and further limiting state and local government spending, should be a priority. As other states enhance their economic policies, Texas must not rest on its laurels but should strive for even bolder reforms to sustain its economic leadership. This includes strengthening the state’s constitutional and statutory spending limits consistent with the average taxpayer’s ability to pay for government spending. The best path would be to limit the entire budget or at least all state funds, excluding federal funds, with a maximum rate of population growth plus inflation and a two-thirds vote to exceed it. This limitation should also cover local governments, which has helped keep Colorado’s state and local spending in check, even in a blue state, with its Taxpayer’s Bill of Rights. Additionally, the state’s approach to taxation needs a radical rethink. The overwhelming support for eliminating property taxes reflects a broader dissatisfaction with traditional tax structures that penalize success and deter investment. A bold approach would be to transition from property taxes to a more equitable tax system by limiting state and local government spending and using surpluses to lower property taxes until they are eliminated in about a decade. The state would use its surpluses to buy down the school district M&O property tax rates, and local governments would use their surpluses to reduce their property tax rates. This approach would support substantial economic growth and a path for people to finally own their home instead of renting from the government forever by being forced to pay these taxes whether the mortgage is paid off. Moreover, as Texas navigates these fiscal reforms, there should be key reforms and reductions where necessary to wasteful government programs and agencies. Given the excessive spending by the state legislature during the last session, with more than a 20% increase in appropriations–the largest in Texas history- there is a need to cut government spending in the next session rather than just limit the growth. This should include providing universal school choice with education savings accounts that should replace the state’s school finance formulas. Doing so would help to empower parents to do what’s best for their kids’ education while reducing the burden on taxpayers because this could dramatically reduce spending. While Texas continues to lead in job growth and reach record highs, the path forward requires adherence to tried-and-tested economic principles and a willingness to innovate and adapt to changing economic landscapes. Texas can maintain and strengthen its position as an economic powerhouse by fostering a more favorable business climate, eliminating corporate welfare, reducing unnecessary governmental interference, and revamping its tax system. As other states accelerate their economic reforms, Texas must lead by example, championing policies that ensure prosperity and freedom. The call to action is clear: Texas must stop passing progressive fiscal policies and ensure its policies promote growth and provide a bulwark against the economic challenges of our times. Originally published at Texans for Fiscal Responsibility.
Unlocking Prosperity: Steering America Back to Free-Market Fundamentals As the latest economic indicators from April 2024 unfold, it’s becoming alarmingly clear that America’s path to prosperity is at a critical juncture. A steadfast return to free-market capitalism with limited government is not just a choice but an urgent necessity. In the face of fluctuating, weakening economic conditions, a pivot towards policies that promote market-driven growth rather than big-government socialism is imperative. This shift is crucial to counteract the current trend of governmental overreach, which is stifling innovation, profitability, and efficiency. April’s labor market update provided a mixed bag of results. While an increase of 175,000 in nonfarm payroll employment was reported, the government added 8,000 jobs, bringing the increase to 618,000 (+2.7%) over the last year. This underscores a continuing trend of government expansion faster than the productive private sector by 2.2 million or by just 1.6%. Furthermore, the household employment figures tell a concerning story of a stagnant labor force participation rate of 62.7%. This stagnation indicates that a large part of the potential workforce remains on the sidelines, artificially lowering the unemployment rate and obscuring deeper systemic issues. The latest GDP data for Q1 2024 revealed a growth rate of just 1.6% on an annualized basis, indicating that the economic recovery is still on shaky ground. When government spending was excluded, real private sector growth was even more lackluster at 1.4%. There is a critical need for genuine market-driven growth rather than relying on fiscal or monetary ‘stimulus’ that fails to ignite real economic dynamism. It’s a clear call for a return to free-market capitalism. Inflation continues to erode the economic landscape, with the Consumer Price Index rising by 3.5% year-over-year for April. This persistent inflation is coupled with a troubling decline in inflation-adjusted average weekly earnings, which have fallen by a large 4.4% since January 2021, when Biden took office. This decline in purchasing power strains American households, making the case for immediate inflation control measures more compelling than ever. The regulatory environment under the current administration has also become a significant burden. An estimated $1.6 trillion in new regulations have been added since President Biden took office, further hindering economic activity. This increase across various sectors, including banking and anti-trust enforcement by the Federal Trade Commission, Federal Deposit Insurance Corporation, Federal Reserve, and Consumer Financial Protection Bureau, has introduced considerable uncertainty and constrained economic vitality. The nation’s fiscal situation is also a growing concern, with the Monthly Treasury Statement for April 2024 showing significant budget deficits that continue to burden future generations. Coupled with the Federal Reserve’s latest meeting minutes, which reveal ongoing concerns about inflation and economic stability, and the size of the bloated Federal Reserve’s balance sheet, it’s clear that fiscal and monetary policies are distorting and destroying sustainable growth. The U.S. must champion policies that reduce government intervention to navigate these turbulent waters. This involves cutting government spending, easing regulatory burdens, and reforming and simplifying taxes to foster economic growth and innovation. Adopting a fiscal rule such as Americans for Tax Reform’s Sustainable Budget Project and advocating for a monetary policy rule that curtails the Federal Reserve’s market interventions would help pave the way for a more stable and prosperous economic future. The time is ripe for America to recommit to the principles that have historically underpinned its economic success: trust in market mechanisms, empowerment of individuals, and a significant reduction in government’s coercive roles. By advocating for a return to these fundamentals, we can ensure that the economy not only recovers but also thrives in a manner that benefits the broadest swath of society. As we look forward, let’s rally behind policies repeatedly proven to be the bedrock of prosperous, resilient economies. Property taxes in Wyoming have increased dramatically, placing a substantial burden on taxpayers. This proposal outlines a bold, practical plan to eliminate property taxes through disciplined government spending and targeted surplus distribution to reduce school district property taxes.
Property Taxes are Growing Too Fast:
Process for Eliminating Property Taxes: The proposed process involves three critical steps aimed at systematically reducing and eventually eliminating property taxes while fully funding state government operations and school districts:
Expected Outcomes
Economic Gains
Conclusion This proposal seeks to relieve Wyoming residents of the oppressive property tax burden. The discipline it imposes on state spending directly benefits all Wyoming taxpayers – surplus money flows back into their pockets, not into government accounts to be spent by politicians. Achieving this bold reform will allow Wyoming to flourish now and for future generations. Full research paper here. Join my conversation with Ryan Bourne, chair of economics understanding at Cato Institute and editor of the book The War on Prices, on the latest Let People Prosper Show podcast. Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insightful content.
Organized by R Street Institute. Your browser does not support viewing inline PDFs. Click here to view the PDF. Pros and Cons of Using a Home Equity Line of Credit to Pay Off Your Mortgage: Interview on NTD News5/22/2024 With house prices surging recently, the average American homeowner now has around $300,000 of equity in their home. With the cost of living also soaring, many homeowners are considering taking out a home equity loan, or HELOC, to pay off their mortgage. But how exactly do such lines of credit work, and are they a good idea?
NTD’s Evelyn Li spoke with Vance Ginn, the former chief economist at the White House’s Office of Management and Budget and the president of Ginn Economic Consulting, to find out more. Interview on NTD News on May 22, 2024: https://www.ntd.com/pros-and-cons-of-using-a-home-equity-line-of-credit-to-pay-off-your-mortgage-economic-consultant_994520.html Did The Supreme Court Just Give The CFPB Too Much Power - Radio Interview on Lars Larson Show5/22/2024 Join me for this episode as I discuss the COVID lockdowns in Australia, the fight for liberation, and Topher Field's incarceration. Don't miss this inspiring conversation on human rights and the power of resilience. 💪
Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insightful content. Originally published at Marketplace.
Inflation numbers came in better than expected this week, and they’re the latest in several months of data showing that price growth has slowed down. Another way to look at inflation came out from the Congressional Budget Office this week, looking at the issue from the lens of purchasing power. The CBO found that if you look at the same basket of goods from pre-pandemic to 2023, on average, Americans need less of their income to buy the same set of stuff. But if that just feels a bit off to you, I get it. According to the Congressional Budget Office, purchasing power went up across all income groups because incomes grew faster than prices between 2019 and 2023. “That kind of goes against the common perception of what’s going on is that people are losing purchasing power over the last few years,” said Vance Ginn who is president of Ginn Economic Consulting and was a White House chief economist during the Trump administration. The CBO found, percentage-wise, folks in the highest income bracket spent less of their income on common expenses — down 6.3%, thank you stock market. Folks in the lower income brackets weren’t so lucky. They saw only a two percent drop in how much they spent on basics, thanks to higher wages. But for people in the middle, it was even less noticeable. “And that’s why I think they’ve been, kind of, not being able to be as prosperous as some of the others during this period,” said Ginn. Plus these numbers reflect averages, not people’s individual experiences. And that’s where narratives really come into play, especially in an election year. “We did go through a period of about 18 months of very elevated inflation. But it’s also true that prices today are rising roughly in line with previous historical experience,” said Michael Linden, a Senior Policy Fellow at the Washington Center for Equitable Growth. And in campaign ads and in stump speeches we’ll probably end up hearing versions of both inflation stories, amplified in whichever direction benefits the candidate talking. “And I think that the American people are going to have to decide when they hear about inflation, which of those two things is more important to them,” said Linden. And whose narrative about the economy you choose to believe. |
Vance Ginn, Ph.D.
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