Originally published on Substack. 

​Prices Hit Home

The latest Consumer Price Index report should end the fantasy that inflation is gone. March CPI jumped 0.9 percent in a single month, and the 12-month headline rate rose to 3.3 percent. Core CPI increased 0.2 percent in March and 2.6 percent over the past year. Even by the cleaner measure, inflation is still running above where price stability should be. The Federal Reserve’s long-run inflation target is 2 percent, measured by PCE, not CPI, but the point remains the same: prices are still rising too fast, and families know it.

Inflation always hurts working families first and worst. When prices rise faster than paychecks, people do not need a lecture from Washington about “resilience.” They need relief. Instead, they get shrinking purchasing power, tighter budgets, delayed purchases, and more debt. They feel poorer because bad policy is making them poorer.

Weak Labor Signals

This would be bad enough if the economy were otherwise humming along. But it is not. Inflation moving higher while job growth weakens is the kind of combination that should make every policymaker nervous. That is how stagflation creeps back into the conversation: not all at once, but through a steady mix of higher costs, weaker confidence, and slower growth.

The bigger problem is that Washington keeps feeding the fire instead of putting it out.

The Fed’s Long Shadow
​
Start with the Federal Reserve. The Fed’s total assets were $6.694 trillion as of April 8, according to FRED’s WALCL series.

That matters because a bloated central bank balance sheet is not neutral. Years of extraordinary intervention distorted asset prices, encouraged misallocation of capital, rewarded leverage, and helped fuel the inflationary pressures Americans are still dealing with. Easy money always looks clever on the way up. Then families get the bill on the way down.

There should be a rule to reverse this. The Fed’s balance sheet should be put on a predictable path back toward roughly 6 percent of GDP over time, absent a true emergency. Emergency tools should not become permanent habits. Monetary policy should not be a standing engine of distortion. Sound money requires rules, restraint, and humility.

Tariffs Raise Costs

Then there is trade policy. Tariffs are taxes on Americans. They raise input costs for producers, increase prices for consumers, and create uncertainty for businesses trying to plan investment and hiring. There is no magic here. Protectionism does not create prosperity. It redistributes pain and calls it patriotism.
​
That is especially damaging at a time like this. When inflation is already too high and growth is already soft, piling more costs onto supply chains is economic malpractice. Businesses do not absorb these costs out of kindness. They pass them through, delay expansion, or cut back elsewhere.

Overspending Adds Fuel

Fiscal policy is no better. Washington has spent years overspending up to $7 trillion per year, subsidizing consumption, picking winners, and pretending deficits do not matter. The result is exactly what basic economics would predict: weaker incentives for productive investment, higher interest costs, and a more fragile growth outlook.

This is where the case for fiscal rules matters. I have long argued for a spending limit based on population growth plus inflation so government grows no faster than the private economy can sustain. Spend above that, and you get what we have now: bloated budgets, more debt, and less room for families and businesses to thrive. Fiscal discipline is not austerity. It is the minimum requirement for sanity.

War and Uncertainty

Add wars and geopolitical instability to this mess and the risks multiply. Conflict disrupts energy markets, rattles supply chains, clouds business expectations, and makes already-high prices even more volatile. At the same time, policy uncertainty from tariffs, deficits, and regulatory swings freezes hiring and investment. Businesses sit on their hands when Washington cannot stop moving the goalposts.

That is how families get squeezed from every direction. Prices rise. Growth weakens. Job prospects soften. Confidence fades. And the people who caused much of the mess ask for even more power to manage it.

Less Government, More Prosperity

None of this should be surprising. Government tried to print prosperity, spend prosperity, and tariff its way to prosperity. It failed. Again.

The answer is less government. That means monetary rules instead of discretion, spending restraint instead of endless deficits, open markets instead of tariffs, and a foreign policy that understands war is costly in both lives and living standards. Families do not need more central planning. They need room to work, save, invest, and build.

I have made this case in my writings for years because the lesson keeps proving true: prosperity comes from free people and free markets, not from Washington trying to micromanage the economy. Inflation is not just a statistic. It is a policy failure with a grocery bill attached.

Closing Thoughts

March’s CPI report is a warning. Inflation is still too high. The Fed is still far from restored normality. Washington’s tariffs, overspending, and war-driven uncertainty are making the outlook worse, not better. If policymakers want to help families, they should stop distorting markets and start shrinking government.

Subscribe to Let People Prosper on Substack and stay engaged. Share this with someone who is tired of paying for Washington’s mistakes, and follow along for more analysis on how we can restore sound money, rein in spending, remove barriers to growth, and let people prosper.
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Three key takeaways for policymakers

• Restore a monetary rule. Inflation is still above the Fed’s 2 percent target, and the balance sheet remains massively elevated at about $6.7 trillion. The Fed should follow a rules-based path that steadily normalizes its footprint and gets the balance sheet back near its pre-2008 norm relative to GDP of 6%.
• Adopt a fiscal rule. Federal spending should reduced then capped to grow no faster than population plus inflation. That is the surest way to stop chronic overspending, reduce inflationary pressure, and protect taxpayers from government that keeps growing faster than the real economy.
• End cost-raising intervention. Tariffs, subsidies, and war-driven uncertainty raise prices and weaken growth. The better path is simple: less government, freer markets, stronger incentives to produce, and more room for families to prosper.

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

Originally published on Substack. 

Today’s U.S. jobs report was better than expected, and that is welcome news. The economy added 178,000 jobs in March, the unemployment rate edged down to 4.3%, and average hourly earnings rose 3.5% over the past year, according to the latest BLS employment report. After the weakness earlier this year, that is a solid bounce.

But let’s not kid ourselves. One better month does not mean the labor market is healthy. It means March was better than February. That is not the same thing.

The Headline Was Better
​
A gain of 178,000 jobs is real progress, well above what some expected. February payrolls had dropped by 133,000, so March was clearly an improvement. Americans keep working, businesses keep hiring when they can, and that resilience should be acknowledged.

But the same BLS report also says payroll employment has “changed little on net over the prior 12 months.” That is the line that matters most. This was a good month inside a labor market that has been sluggish for more than a year, with declines in six of the last fourteen months.

Private Hiring Still Looks Weak

The private sector added 186,000 jobs in March. That is better than a decline, but it is still not broad-based strength. The problem is not the size of the gain. It is how concentrated is that gain.
​
According to the BLS data, health care added 76,000 jobs, construction added 26,000, transportation and warehousing added 21,000, and social assistance added 14,000. Those sectors did most of the work.

Meanwhile, financial activities lost 15,000 jobs, and BLS said manufacturing, wholesale trade, retail trade, information, professional and business services, leisure and hospitality, and other services showed little change.

That is not a broad private-sector expansion. That is a narrow labor market being carried by a few sectors.

Government Jobs Declined Again
​
Government employment fell by 8,000 in March, including an 18,000 drop in federal government jobs, according to the BLS report. That federal decline is good news on its own, as it is the fewest federal employees in 60 years and the lowest share of total employment since at least 1939.

But the broader lesson is more important. If federal payrolls (good) are shrinking while only a small private sectors addition (not good), that means the labor market is still too weak underneath the surface. A truly healthy economy would show broad hiring across many private industries, not just a few pockets doing the heavy lifting, which are dominated by government.

The 12-Month Trend Is Still Soft

The annual trend looks worse than the headline.
​
BLS says construction had shown little net change over the prior 12 months. Transportation and warehousing is down 139,000 jobs since its February 2025 peak. Financial activities is down 77,000 since its May 2025 peak. And federal government employment is down 355,000, or 11.8%, since its October 2024 peak, per the same report.

Health care remains the standout, adding an average of 29,000 jobs per month over the prior year. That is good. But it also proves the larger point: too much of the labor market’s strength is concentrated in too few places that are dominated by government.

The Labor Force Drop Matters

The unemployment rate dipped to 4.3%, but not for the best reason.

The BLS report shows the civilian labor force fell by 396,000 in March. The number of people not in the labor force rose by 488,000. The labor force participation rate slipped to 61.9%, and the employment-population ratio fell to 59.2%.

That means part of the lower unemployment rate came from fewer people being counted in the labor market, not from a broad surge in employment opportunities. That is why this report is better described as encouraging than reassuring.

Wages Help, but Families Are Still Squeezed

Wage growth at 3.5% over the year is better than falling behind inflation, at least for the moment. But it is hardly a huge cushion when families are still dealing with elevated prices for food, housing, insurance, and energy.

And this is where bad policy keeps making things worse.

Tariffs are taxes. They raise costs for businesses and consumers. Energy shocks tied to the war in Iran threaten to push gas prices and broader inflation higher. Years of overspending and monetary excess already strained affordability.

Families do not experience the economy through one payroll headline. They experience it through their budget, and their budget is still under pressure.

Bad Policy Still Drives the Weakness

The jobs report does not assign causes. That is not its job. But the policy backdrop matters.

A labor market with weak breadth and falling participation is more vulnerable to policy mistakes. Tariffs discourage trade and investment. Regulatory burdens raise costs and reduce flexibility. Overspending fuels inflation and weakens real purchasing power. Energy instability pushes input costs higher across the economy. Policy uncertainty makes businesses more cautious about hiring and expanding.

So, yes, March was better. But the economy is still carrying the weight of too many bad policy choices. That is why this report is not a vindication of the current policy path. If anything, it is a reminder of how resilient Americans are despite Washington’s mistakes.

Three Takeaways for Policymakers

1. Don’t oversell one month.

March’s 178,000 job gain was a welcome bounce, but BLS says payrolls have changed little on net over the prior 12 months.

2. Private-sector strength is still too narrow.

Most of the March gains came from health care, construction, transportation and warehousing, and social assistance, while many other industries were flat or down, according to BLS.

3. A lower unemployment rate means less if the labor force is shrinking.

The BLS report shows the labor force fell by 396,000 in March and participation slipped to 61.9%.

The Bottom Line

March was a bounce. Good.

But the private sector still looks too weak, too narrow, and too vulnerable to bad policy. Federal jobs fell, which is fine. The bigger issue is that broad private-sector hiring still is not there. And when the labor force is shrinking, a lower unemployment rate is not nearly as comforting as it looks.

Policymakers should stop making affordability worse through tariffs, overspending, and more distortion.

Originally published on Substack. 

The latest panic over private credit is getting awfully familiar. A few funds hit redemption limits, some software-heavy loans wobble, and suddenly the political class and much of the media reach for the same tired script: shadow banking, hidden risk, time for Washington to step in.

Recent coverage has focused on investor withdrawals, pressure on software-related loans, and worries that private credit is having a “wake-up call.” But a wake-up call is not a funeral. Volatility is not the same thing as systemic collapse.

Markets Filling a Gap

Private credit did not appear out of nowhere. It grew because traditional banks pulled back from parts of the lending market, especially for middle-market firms that still needed capital but did not fit neatly into the old bank model.

A Federal Reserve note estimates U.S. private credit totaled about $1.34 trillion by mid-2024 and had grown roughly fivefold since 2009. That is not evidence of market failure. It is evidence that markets adapt when demand exists and legacy institutions cannot or will not meet it.

That is also why I agree with Steve Moore’s recent commentary. His point is straightforward: private credit can strengthen financial stability by diversifying lending away from government-backed banks and by allowing sophisticated private investors to fund projects directly rather than forcing more activity through taxpayer-exposed institutions.

He argues we need more of this financing, not less, especially if America wants to fund the industries of tomorrow without asking Washington to play venture capitalist. He is right.

Not a Replay of 2008

The 2008 financial crisis centered on a fragile banking system loaded with leverage, maturity mismatch, opaque securitization, and deposit-funded institutions vulnerable to panic.

Private credit is structured differently. In general, investors, not ordinary depositors, are taking the risk, and much of the funding is longer-term than the runnable liabilities that helped turn stress into crisis in 2008.

The Federal Reserve’s analysis says immediate financial-stability risks from private credit vehicles appear limited, in part because leverage is moderate and funding is more long-term. It also found that large U.S. banks appear sufficiently capitalized and liquid to absorb a significant drawdown scenario tied to private credit lines.

That does not mean there are no risks. It means the risks are different.

Liquidity Is Not a Scandal

What we are seeing now looks much more like a liquidity-design and valuation issue in certain semiliquid funds than a systemwide panic.

Reuters reported that Apollo Debt Solutions limited quarterly withdrawals to 5 percent after redemption requests reached 11.2 percent of shares. Reuters also noted that these vehicles typically disclose those redemption limits up front. Investors may not like that when markets sour, but disclosed liquidity terms are not a scandal. They are the contract. Illiquid assets are not supposed to behave like checking accounts with better branding.

That is where too many critics lose the plot. They see redemption caps and assume that government must ride in on a white horse. But if a fund misprices liquidity, let investors punish it. If managers overexpose themselves to a shaky sector, let returns suffer and capital leave. That is not market failure. That is the market doing its job.

Profit and Loss Still Matter

This is the part that defenders of regulation never seem to grasp. A market does not prove its worth by never making mistakes. A market proves its worth by revealing mistakes, pricing them, and reallocating capital away from bad decisions and toward better ones.

Prices move. Assets get marked down. Weak underwriting gets exposed. Managers who made bad bets get punished. Investors who ignored the fine print discover that they should not have. None of that requires a federal rescue squad. It requires adults taking responsibility for risk. That is what free markets demand.

And this is exactly why new taxes and regulations would be the wrong response.

Politicians love to take a contained market correction and convert it into an excuse for broader control. A few funds run into trouble, and suddenly the answer is more red tape for everyone. That would not make the market healthier. It would only reduce options, protect incumbents, and make capital formation harder for businesses that already struggle to find financing through traditional channels.

More Choice, Better Markets

Private credit serves a real economic purpose. It offers speed, flexibility, and customized financing for firms that are often too large or too specialized for community banks yet not natural fits for the broadly syndicated loan market. That broader menu of options matters.

A dynamic economy should not force every borrower into one approved lane any more than it should force every saver into one approved product.
This is not some moral defense of every lender or every loan. Some funds will do dumb things. Some managers will get punished. Some investors will find out the hard way that yield comes with risk. Good. That is how markets learn.

The real danger is not that private credit exists. The real danger is that Washington will use a messy but manageable period in one corner of the market as an excuse to shrink consumer and business choice across the board.

That would be backward.

Better Instinct

The instinct here should be that private credit fuel America’s future, not become the next excuse for bureaucratic mission creep. Diverse private financing can disperse risk more broadly and reduce dependence on the same government-backed banking model that critics claim to distrust.

If America wants to lead in the industries of tomorrow, startups and growth firms need access to capital, and the government should not be the one picking winners and losers.

Capital should come from investors willing to bear risk, not from bureaucrats pretending they can do venture allocation better than markets can.

The Bottom Line

Private credit is not 2008.

It is a market response to real demand. It is one more way businesses can get financed, investors can allocate capital, and markets can adapt when older institutions pull back. It deserves scrutiny, but not caricature. It deserves discipline through profit and loss, not panic-driven regulation or new taxes.

If private credit funds make bad decisions, let the market discipline them. If they make good decisions, let them grow. That is how a free economy works.

And yes, that means letting markets get messy sometimes. I trust that process a lot more than I trust Washington chasing headlines.

Three Takeaways for Policymakers

1. Protect choice in credit markets.

More financing options for businesses and investors make the economy more resilient, not less.

2. Let profit and loss do the disciplining.

Bad underwriting, poor liquidity design, and weak sector bets should be punished by markets, not socialized by government.

3. Do not confuse volatility with systemic collapse.
​
Redemption limits and repricing in semiliquid funds are not the same thing as a 2008-style banking panic.

Originally published at The Daily Economy. 

​Artificial intelligence has become the latest excuse for reviving one of the oldest bad ideas in economic policy: a universal basic income. Recent pieces in Newsweek, the LSE Business Review, and Fortune have all helped push the idea that AI may soon wipe out so many jobs that Washington will need to send everyone a check.

That makes for a catchy headline. It also makes for terrible economics.

The right question is not whether AI will disrupt work. Of course it will. The right question is this: after more than 100 local guaranteed-income experiments, what have we actually learned?

The answer is much less flattering to UBI than its promoters would like.

What 122 UBI-Style Pilots Show

A new AEI working paper by Kevin Corinth and Hannah Mayhew gives the best recent overview of the evidence. Per their study, there were 122 guaranteed basic income pilots across 33 states and the District of Columbia between 2017 and 2025. Those pilots allocated about $481.4 million in transfers to 40,921 recipients, with 61,664 total participants including control groups. The average recipient got about $11,765, the average pilot lasted 18.4 months, and the average monthly payment was $616.

That sounds like a mountain of evidence. It is not.

Of those 122 pilots, only 52 had published outcomes. Only 35 used randomized designs. Only 30 reported employment outcomes. So the case for UBI is not being built on some giant pile of clear, clean evidence. It is being built on a much smaller stack of studies, many of them weak, limited, or badly timed.

And here is the kicker. Among the 30 randomized pilots with published employment results, the average effect was a 0.8 percentage-point increase in employment. UBI fans will rush to wave that around. They should slow down.

AEI shows that the bigger and more credible studies tell a very different story. Among the four pilots with treatment groups of at least 500 participants, which together account for 55 percent of all treatment-group participants, the mean effect on employment was minus 3.2 percentage points. AEI also estimates a mean income elasticity of -0.18, which is consistent with standard labor-supply economics. 

In plain English, when people receive more unearned income, work tends to fall at the margin. Shocking, I know. Economics still works.

Credit: American Enterprise Institute

​Why the Evidence Is Weaker

Than the HypeThe AEI paper is useful not just for what it finds, but for how bluntly it describes the weaknesses in the evidence.

The average treatment group among those 30 studies was just 359 people, and the median was only 151. That is not exactly ironclad evidence for redesigning the American welfare state. Among the 26 pilots for which attrition could be measured, the average attrition rate was 37 percent. That is a giant warning sign. If enough people drop out, the reported results can become badly distorted.

The studies also varied widely in payment size, duration, sample composition, and even how outcomes were measured. The mean annualized payment was $7,177, equal to an average income boost of about 39.5 percent relative to baseline household income in the studies. Some pilots relied heavily on self-reported survey data. Some were conducted during or right after the COVID period — when labor markets, safety-net programs, and personal decisions were anything but normal.
​
AEI’s conclusion is appropriately cautious: these findings may not generalize to a permanent, universal, nationwide UBI under current or future conditions. That alone should cool off a lot of the AI-fueled policy hysteria.

​AI Will Displace Jobs. It Will Also Create Them

None of this means AI will be painless. Some jobs will shrink. Some tasks will disappear. Some workers will need to retrain, relocate, or rethink their careers. That is what happens when productivity rises and technology changes how goods and services are produced. It happened with mechanization, with computers, and with the internet. It will happen with AI.

But displacement is not the same thing as permanent mass unemployment. That leap is where the UBI argument falls apart. Economies are not fixed piles of jobs. They are dynamic systems of discovery, adaptation, and exchange. When costs fall and productivity rises, resources move. Businesses reorganize. Consumer demand changes. New occupations emerge. Old ones evolve. Some disappear. That churn is real, but so is the adaptation.

The answer to technological change is not to pay people for economic resignation. The answer is to make adaptation easier.

UBI Fails the Economics Test

There is a reason Ryan Bourne at Cato has argued that UBI is not the answer if AI comes for your job. It confuses a transition problem with a permanent income problem. Worse, it assumes that writing checks can substitute for the incentives, signals, and institutional conditions that actually create opportunity.

UBI also crashes into the budget constraint. As Max Gulker at The Daily Economy has noted, UBI is often sold through small pilots and vague moral language, but the national arithmetic is ugly. And as Robert Wright in another AIER piece points out, “universal” quickly means sending money to many people who are not poor while piling enormous costs onto taxpayers. (Bear in mind, the national debt is already rapidly approaching $40 trillion.) 

That is before getting to the public-choice problem. In theory, UBI supporters sometimes imagine replacing the welfare state with one simple cash transfer. In reality, government programs rarely disappear. Bureaucracies defend themselves. Interest groups protect carveouts. Politicians promise more, not less. So a UBI would likely be stacked on top of much of the current welfare state, not substituted for it. That is not reform. That is fiscal delusion with better branding.

A Better Answer: Remove Barriers to Work

If AI means more labor-market churn, then policy should focus on mobility, flexibility, and self-sufficiency. That means less occupational licensing, lower taxes, lighter regulation, fewer benefit cliffs, less wasteful spending, and more room for entrepreneurship and job creation. The government should stop making it harder for people to pivot.

It also means reforming welfare the right way. My proposal for empowerment accounts is not a UBI. It would be targeted to people already eligible for welfare, not universal. It would include a work requirement for work-capable adults, not detach income from effort. And it would consolidate fragmented programs into a more flexible account that families control directly, reducing bureaucracy and lowering spending over time as more recipients move toward self-sufficiency.

That puts it much closer to the classical liberal insight behind replacing bureaucratic control with direct support, while avoiding the fatal error of turning the entire country into a permanent transfer state. As Art Carden reminds us at The Daily Economy, there is a long intellectual history behind cash-based assistance. But today’s UBI politics are not really about shrinking the state. They are mostly about expanding it because elites fear AI.

Don’t Make Bad Policy Out of Fear

The UBI revival tells us less about AI than it does about politics. New technology arrives, uncertainty rises, and too many policymakers reach for the federal checkbook as if it were a magic wand. It is not.

After 122 local experiments, the case for UBI is still weak. The best evidence does not show a jobs renaissance. The larger studies show employment declines. The broader evidence base is riddled with small sample sizes, high attrition, and limited generalizability. That is a flimsy foundation for a permanent national entitlement.

AI will change work. It will not repeal economics. The best response is not fear-driven universal dependency. It is a freer economy with stronger incentives to work, save, invest, adapt, and prosper.