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Everyone knows the economy is a top issue for voters. Housing affordability, gas prices, inflation, and rising everyday costs are shaping how Americans make decisions at the polls. Our leaders should be focused on policies that lower costs, expand opportunity, and make it easier for families and businesses to get ahead. But recent policies are unfortunately ignoring the root causes, instead adding complexity, raising costs, and weakening the incentives that drive growth.
In this episode of This Week’s Economy, we break down the latest data — from economic reports and migration trends to the Federal Reserve and energy prices— to show what’s really happening beneath the surface, and what it will take to build a more affordable and prosperous economy. Watch the full episode on YouTube, Apple Podcast, or Spotify, and visit my newsletter for show notes.
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 Originally published on Substack.
Texas has a choice: build enough power for the future or regulate its way into energy scarcity. Today, the Texas House Committee on State Affairs is holding a hearing on microgrids and distributed energy resources. That may sound technical, but it is really about whether Texas families get more reliable electricity at lower cost or whether government keeps slowing down the supply we need. Energy Abundance, Not Scarcity Texas became America’s energy leader because it trusted competition, private investment, property rights, and innovation more than central planning. That should remain the North Star. The goal should not be to manage scarcity through mandates, subsidies, and bureaucratic control. The goal should be energy abundance. Electricity prices follow basic economics. When demand rises faster than reliable supply, prices rise and reliability weakens. When supply expands, competition works, and infrastructure keeps pace, price pressure falls. This is not complicated. Texas needs more power, built faster, with less government in the way. Families Feel The Pain This is already a kitchen-table issue. A University of Houston and Texas Southern University survey found that nearly 45% of Texas households pay more than $200 per month for summer electricity, and about one-third spend 7% or more of household income on energy. That means higher electric bills are crowding out groceries, rent, medical care, savings, and opportunities for families. Politicians often respond with rebates, subsidies, or temporary relief. That may sound compassionate, but it does not fix the problem. It often hides the problem. The real answer is supply. More generation. More storage. More transmission efficiency. More distributed energy. More private capital. More competition. Growth Is Success Texas is growing because people and businesses want to be here. Families are moving here. Manufacturers are expanding here. Hospitals, logistics hubs, data centers, and energy-intensive industries need more electricity. The Energy Information Administration expects U.S. electricity load to rise in 2026 and 2027, with ERCOT and PJM among the regions where growth pressures are especially important. EIA also estimates that data center load is emerging as a major driver of long-term U.S. electricity demand growth, though those estimates stew questionable given flawed projections. That should not scare Texas lawmakers. It should focus them. Texas does not have a demand problem. Growth is success. Texas has an infrastructure, permitting, and regulatory alignment problem. Microgrids Can Help Microgrids and distributed energy resources can help meet this moment. They allow large-load users, hospitals, campuses, rural communities, manufacturers, and data centers to bring their own power, manage their own risks, and reduce stress on the broader grid. They can add supply closer to where power is needed. They can reduce congestion. They can improve resilience during outages. They can give customers more control over their energy costs. This is economics at work. Let those who need power procure it, produce it, store it, and pay for it through voluntary contracts. But microgrids will work only if Texas does not regulate them like monopoly utilities. Don’t Regulate Innovation Like Monopoly Utilities Texas should create a clear legal path for off-ERCOT, behind-the-meter, and islanded microgrids to generate, distribute, and sell power to defined customers without automatically triggering full public utility regulation. If a system does not interconnect with ERCOT, does not use public transmission, and does not shift costs onto ratepayers, it should not be buried in utility-style red tape. If that system later connects to ERCOT, imports power, exports power, or participates in wholesale markets, then appropriate oversight should apply. That is the right balance: freedom first, regulation only when the broader grid is affected. Other States Are Moving Texas should lead, but other states are already moving. New Hampshire’s HB 672 created a category for off-grid electricity providers and exempts them from certain public-utility regulations while they remain independent from the regulated grid. Utah’s SB 132 created requirements for serving large-scale electric loads and helped clarify how large users can be served through new contractual and generation arrangements. These reforms are not perfect, but they move in the right direction. Private capital should be allowed to build energy infrastructure without being forced through a regulatory model designed for monopoly utilities. Texas should do better. Permitting Is The Bottleneck America often takes longer to approve energy infrastructure than it should take to build it. That is economic malpractice. Permitting delays raise costs, slow investment, weaken reliability, and block markets from responding to real demand. When Texans need more power and private capital is ready to build, government should not stand in the way. This is where economics and common sense meet. A market cannot solve scarcity when government blocks the supply response. That is why microgrids matter. They can bypass some of the bottlenecks by allowing private users to bring their own power rather than waiting years for traditional infrastructure to catch up. China Is A Warning, Not A Model China’s centralized system is not a model Texas should copy. But its speed should be a warning. Global Energy Monitor found that China began construction on 94.5 gigawatts of coal power capacity in 2024 after a major permitting surge in prior years. The lesson is not to imitate China. The lesson is that energy abundance is economic strength. Texas can win the energy race the Texas way: with freedom, competition, private property, and private investment. Don’t Single Out Data Centers Data centers are becoming an easy political target. That is a mistake. They should pay their electric bills like every other customer once they are operating. They should not get special subsidies. They should not shift costs to families. But they also should not be forced to pre-pay, self-finance, or shoulder special grid costs that no other building or industry must pay. Office towers do not pre-pay the grid before opening. Hospitals do not pre-pay the grid before serving patients. Manufacturers do not pre-pay the grid before producing goods. Retail centers do not pre-pay the grid before hiring workers. So why single out data centers? Forcing one sector to meet special obligations that others do not face is not fairness. It is discrimination. It picks winners and losers. It punishes growth. It tells innovators that Texas welcomes investment until politicians decide their industry is too visible. That is not the Texas model. The right approach is simple: cost causation, not political targeting. If a customer imposes costs on the system, rates and contracts should reflect those costs. But government should not invent special rules for one industry because it is growing fast. Four Principles For Texas First, protect the right to build private power. Off-ERCOT, islanded, and behind-the-meter microgrids should be allowed to serve defined customers without being regulated like public utilities. Second, clarify interconnection rules. Developers need certainty. If a project stays off the grid, it should face a light-touch framework. If it connects to ERCOT, then ERCOT rules and reliability protections should apply. Third, apply equal treatment. Data centers, manufacturers, hospitals, campuses, and other large-load users should pay for the electricity they use and the costs they impose. But government should not force one industry to carry special burdens no other customer carries. Fourth, avoid subsidies and favoritism. Public-private partnerships and subsidy-driven programs may sound appealing, but they often distort markets, shift costs to taxpayers or ratepayers, and invite government to choose winners and losers. True resilience comes from competition, redundancy, price signals, and decentralized decision-making. Let Private Capital Build Texas does not need more government micromanagement of electricity. It needs more supply. Faster permitting. Clearer rules. Stronger property rights. More private capital. Microgrids and distributed energy resources are not a silver bullet, but they are an important part of an energy abundance agenda. They can help Texans add power where it is needed, reduce strain on the grid, strengthen reliability, and lower long-term costs. The Legislature should resist turning this into another regulatory maze. Let entrepreneurs build. Let consumers contract. Let private capital solve problems. Let large users bring their own power without forcing families to pick up the tab. More power, built faster, with less government in the way is how Texas can stay the energy capital of America and let people prosper. Three Key Takeaways For Policymakers
Get Involved Texas can lead the next era of energy abundance, but only if lawmakers hear from Texans who want reliability, affordability, and freedom to build. Contact your state legislators. Submit comments on energy policy. Share this newsletter with friends, business leaders, and policymakers who care about keeping Texas prosperous.  Originally published at Kansas Policy Institute. Kansas families need lower fuel costs through more supply, less inflation, and fewer government-made costs. Fuel prices hit families fast. A gallon of gas is not just a number on a sign. It is the cost of getting to work, taking kids to school, delivering goods, that long-planned summer road trip, and keeping rural Kansas connected. According to AAA’s Kansas gas price data, regular gasoline averaged $3.961 per gallon in Kansas on May 4, compared with a national average of $4.457. Kansas is below the national average, but that is little comfort to families already squeezed by groceries, housing, insurance, utilities, and interest costs. By way of reference, the price one month ago was $3.363 and $2.834 this time last year. Affordability is not judged in Washington talking points. It is judged at the pump. Start with Econ 101: prices rise when demand increases, supply falls, or both. Gasoline is especially sensitive because oil trades in a global market. A supply shock in the Middle East, including the war with Iran and risks around the Strait of Hormuz, can hit Kansas quickly. On some level, it doesn’t matter if that barrel is pumped in Saudi Arabia, Saskatchewan, or Sumner County, KS, it’s a globally traded commodity and prices are driven by global trends. My research on oil and gasoline markets has long reinforced this point: retail fuel prices respond to movements in crude and wholesale markets, but not always smoothly or immediately. In other words, pump prices can rise fast when costs jump and fall slowly when costs ease, but not for long. That is why energy abundance matters. The Energy Information Administration reports that U.S. crude oil production reached a record 13.6 million barrels per day in 2025, up 3% from 2024. More American production does not make Kansas immune from global shocks, but it gives families a buffer. Less production, fewer pipelines, constrained refining, and more regulatory delay do the opposite. Still, crude oil is only part of the pump price. The EIA’s gasoline price breakdown for January 2026 shows regular gasoline consisted of 51% crude oil, 20% refining, 11% distribution and marketing, and 18% taxes.  That means policymakers cannot control everything, but they do control some of the costs families face.
Fuel taxes are one of those costs. The EIA reports that state gasoline taxes and fees ranged from 70.9 cents per gallon in California to 9 cents in Alaska as of January 1, 2026, while state gasoline taxes averaged about 33.5 cents per gallon. The federal government adds another 18.4 cents per gallon. Kansas’s gas tax of 25.3 cents per gallon is above the national average and adds real cost to every gallon bought by workers, farmers, truckers, and families. Some politicians respond to high fuel prices with gas tax holidays. That is political theater. It is the same kind of gimmick as sales tax holidays, temporary payroll tax cuts, homestead exemptions, and other carveouts that complicate tax systems while avoiding the real problem. A Washington Post editorial argued that gas tax holidays are good politics but bad policy because they temporarily subsidize demand during a supply shock and do little to solve the underlying issue. The economics are straightforward. If a fuel tax is suspended, pump prices may fall a little at first. But because vehicle drivers were already willing to pay the higher tax-inclusive price, part of the benefit can be captured by suppliers or offset by higher market prices, especially when supply is tight. A temporary holiday does not create more fuel, expand refinery capacity, improve logistics, or reduce inflation. It just reshuffles who receives the benefit while politicians claim credit. What they’re typically doing is reshuffling the cost to future generations who cannot vote, hoping today’s voters give them credit for “doing something.” The better policy is not to suspend fuel taxes. It is to eliminate them over time as part of broader spending restraint and more transparent infrastructure funding. Fuel taxes, which primarily fund road and highway infrastructure, are often sold as user fees, but in practice they are taxes set by politicians, not market prices. Transportation finance is tangled with federal funds, transfers, debt, and political priorities. If lawmakers want users to fund roads, they should be honest, transparent, and disciplined, not hide behind temporary tax gimmicks. The deeper problem is overspending. When governments spend too much, they must tax more, borrow more, regulate more, or inflate more. That burden shows up everywhere, including fuel prices. In my work on inflation and government spending, I’ve noted that when the money supply expands faster than the supply of goods and services, prices rise over time. Fuel shocks then land on families already weakened by general price inflation. Kansas cannot control Iran, OPEC, or global crude markets. But it can stop making affordability worse. That means rejecting gas tax holidays, eliminating fuel taxes over time, reducing and capping government spending, removing barriers to energy production and infrastructure, and avoiding regulations that make transportation more expensive. Fuel prices are shaped by oil markets, refining, distribution, taxes, and inflation. The solution is not gimmicks. It is abundance. More energy. Less spending. Lower taxes. Fewer barriers. That is how Kansas can help families keep more of what they earn and spend less just to get where they need to go. America’s economic future depends on energy—and not just more of it, but energy that is reliable, scalable, and affordable.
As demand surges from artificial intelligence, data centers, electrification, and advanced manufacturing, the need for always-on power is becoming more urgent. Intermittent sources alone can’t meet that demand. The next phase of growth will require a serious conversation about energy abundance. In this episode of the Let People Prosper Show, I sit down with Brian Gitt of Oklo to discuss how advanced nuclear reactors could play a central role in meeting that challenge. We explore the economics of next-generation nuclear, the rise of AI-driven electricity demand, and how innovative models like build-own-operate could reshape how power is delivered. We also examine the policy landscape and the barriers that continue to slow energy innovation in the United States. If the goal is stronger economic growth, improved national security, and greater opportunity, then energy policy must focus on expanding supply and enabling innovation—not restricting it. 🎧 Subscribe and share today! Learn more about Brian here: https://briangitt.com/about 📩 Get show notes & more: https://vanceginn.substack.com com  Originally published on Substack.
Texas families paid an average of $173.94 per month for electricity last year, among the highest monthly bills in the region, while ERCOT issued repeated conservation requests and came dangerously close to emergency conditions. At the same time, more than 98 groundwater conservation districts across the state manage water through political boards, regulatory allocations, and bureaucratic permitting rather than clear market exchange. That is not a coincidence. Texas does not mainly have a water problem or a power problem. Texas has a control problem. Scarcity is real. It always will be. The question is whether it is managed through prices, property rights, and competition, or through bureaucrats, government entities, and political favoritism. One system creates incentives to conserve, invest, and innovate. The other creates shortages, fragility, and permanent fights over who gets what. Lawmakers should stop confusing government management with a functioning market. ERCOT Is Not a Free Market Success Story Texas likes to talk about being different. On electricity, it is different, but not nearly as free-market as many claim. ERCOT is the centralized operator that manages the flow of electric power for about 90 percent of Texas load. It is not “the market” in any meaningful sense. It is the central gatekeeper of a system built around rules, mandates, political interventions, and constrained price signals. When one entity manages the grid under heavy political oversight, that is not decentralized competition. That is centralized administration dressed up in market language. As ERCOT CEO Pablo Vegas recently warned, the system came “incredibly close” to emergency operations that could have ended in rolling blackouts. And the pricing data tells the story. Texas residential electricity rates reached 16.18 cents per kilowatt-hour in March 2026, nearly 30 percent above neighboring Louisiana’s 12.44 cents, and far above Oklahoma’s 9.09 cents. Meanwhile, legislation in recent years could undermine the grid’s ability to meet forecasted demand because lawmakers keep steering investment rather than letting competition and price signals do the work. This is when conservation notices have become routine, which is not a weather quirk. It is a structural symptom. Lawmakers keep trying to subsidize reliability, steer financing, and politically backstop the system instead of letting competition and price signals coordinate supply and demand. That is why Texans keep getting “reforms” without genuine resilience. If lawmakers truly want a stronger power system, they should move toward more real competition in generation, storage, retail options, transmission incentives, and private investment, not more political planning. The answer is not to make the centralized framework even more central. It is to reduce the barriers that prevent genuine market discovery and competitive discipline. Water Systems Are Political Systems First The same problem exists with water, and in many ways it is worse. Texas has more than 98 groundwater conservation districts covering all or part of 144 counties, each operating under its own rules with its own political boards. Decisions about allocation, pricing, infrastructure, and conservation are political long before they are economic. That setup almost guarantees misallocation. Texas water law also contains the Rule of Capture, a principle that gives landowners broad groundwater claims in theory, but those rights are limited in practice by layers of local regulation and institutional conflict. As the Texas Commission on Environmental Quality acknowledges, no single state agency regulates groundwater use statewide. Instead, more than 98 politically created districts each set their own rules, creating a patchwork of legal conflict and political rationing rather than a coherent system of exchange. When the government owns or heavily controls the system, the incentives for long-term stewardship and innovation weaken. Pricing is distorted. Investment decisions become political. And the people making the decisions usually do not bear the full cost of getting them wrong. That is not resource freedom. That is confusion. The Price System Is Not Optional This is where lawmakers need to remember basic economics. Hayek’s knowledge problem is not an ivory-tower concept. It is a practical warning. No central authority knows the correct future price of electricity in every hour across Texas. No board knows the right amount of water to conserve, move, or ration across every county and basin. No agency can process the changing information that millions of people and businesses reveal through market choices. Prices do that. Prices signal scarcity. Prices tell producers when to invest. Prices tell consumers when to conserve. Prices help entrepreneurs discover better technologies and business models. When lawmakers suppress those signals through subsidies, political allocation, and government ownership, they should expect misallocation. As Milton Friedman taught, do not judge policy by its intentions. Judge it by its results. Texas keeps getting the wrong results. Property Rights and Privatization Fix Incentives If lawmakers want lasting improvement, they need to think less like players and more like referees. The answer is stronger property rights and more privatization of these resources. When something is privately owned, someone has a direct incentive to protect it, improve it, and use it efficiently. When something is managed by government, responsibility is diluted and politics fills the vacuum. That is true for water infrastructure. It is true for electricity generation, transmission, and storage. Private owners respond to profit and loss. Government entities respond to politics and pressure. Private firms that fail lose money and market share. Public entities that fail usually ask for more funding and more control. As the Mises Institute explains, the state is the one institution that can compel payment, block competition, and preserve failure indefinitely. In a real market, even a dominant firm faces pressure from innovation and rivals. In politics, failure can survive for decades. Privatizing these systems, or moving much closer to genuine market competition, would not make scarcity disappear. It would do something better. It would make scarcity manageable through real incentives. The Unseen Costs Are the Biggest Ones This is where Bastiat still matters. The seen is the state-backed loan program, the public utility expansion, the district board meeting, or the ribbon-cutting for a politically favored project. The unseen is everything Texas never gets because government crowds it out. You do not see the private water trading platform that was never created because the legal framework discouraged exchange. You do not see the private grid innovations that were never financed because lawmakers decided to steer capital somewhere else. You do not see the smaller competitors who never entered the market because they could not break through the political structure of the system. Those unseen costs are often far larger than the public costs everyone debates, and no budget line ever captures them. The Bottom Line Texas does not need more state management of water and power. It needs less. A centralized grid gatekeeper and government-dominated water systems do not solve scarcity. They politicize it. They weaken price signals. They discourage competition. They protect bad decisions from market correction. If lawmakers want abundance, resilience, and affordability, they should trust the institutions that actually coordinate scarce resources well: private property, market prices, competition, and voluntary exchange. Texas should be leading the country in resource freedom. Too often, it is still acting like scarcity must be managed from the top down. That is backward, and it is costing Texans. Five Takeaways for Policymakers
Closing I’ve spent decades working across more than 20 states and the federal government on property rights reform, energy market policy, and the economic case for limited government. What the data consistently show is that markets, when free to operate, coordinate scarce resources better than any government board ever has. The evidence is not close. Texas has every advantage: energy abundance, economic dynamism, and a constitution that respects property rights. What it lacks is the political will to trust markets to do what politicians cannot. That is the will the 2027 session needs to find. Stay engaged, stay principled, and keep letting people prosper.  Originally published on Substack.
A fresh round of anxiety over Texas data centers is building in Austin, and lawmakers need to get this right. The noise is familiar: grid strain, water use, local disruption, and rising demand from AI. The temptation is also familiar: form a committee, write a mandate, and pretend government can centrally plan the next phase of the digital economy better than markets can. That instinct would be a costly mistake. The better approach is to understand what data centers actually are, why they matter to economic growth, national security, and daily life, and how Texas can meet the challenge with more supply, more transparency, and more competition instead of more bureaucracy. The goal should not be to block growth. It should be to build abundance. A recent Texas Policy Research explainer captures the tension well. Texas is attracting major data-center investment because it has long offered low taxes, abundant land, and a relatively competitive electricity market. But those same projects are exposing weaknesses in the state’s energy and water systems, especially when policy gets in the way of price signals and private adaptation. Start with the basics. A data center is not just a warehouse with computers. It is physical infrastructure that stores, processes, and transmits information for the modern economy. Every search query, cloud backup, digital payment, video stream, logistics update, telehealth session, and AI-generated response relies on this backbone. The Goldwater Institute is right to call data centers the “industrial backbone of the modern economy.” As of March 2025, the United States had 5,426 data centers, and global investment in data-center infrastructure could approach $7 trillion by 2030, with more than 40 percent expected in the United States. Texas is central to that future. CBS Texas reports that the state already has more than 400 data centers and could become the largest data-center market in the world. It highlights major projects from firms like Digital Realty and says Texas data-center load could more than double, accounting for roughly 30 percent of total U.S. demand by 2028. That is not a niche trend. That is Texas sitting at the center of America’s technology race. This is why the issue is bigger than convenience. Data centers matter for national security, too. The same infrastructure that supports commercial AI and cloud services also supports cybersecurity, defense, communications resilience, and America’s broader technological lead. If the United States wants to compete with China, secure sensitive systems, and lead in AI, then it needs the physical infrastructure to do it. A country cannot talk tough about technological leadership while acting squeamish about building server capacity, fiber connections, and reliable power. Lawmakers also need a clearer picture of how these facilities are built. According to GBC Engineers, data centers must handle massive structural loads from server racks, backup generation, batteries, cable trays, transformers, and cooling equipment. They require large open spans, flexible layouts, and rapid construction to keep pace with changing technology. That is why developers often use prefabricated systems and precast concrete. These are specialized industrial assets, not vanity projects for big tech. Now to the hardest concern: electricity. Yes, data centers use a lot of power. Of course they do. They process huge amounts of information nonstop, and computing creates heat that has to be removed. The problem is not that demand rises. The problem is when policymakers respond as if demand itself is suspicious. Rising electricity demand is what you should expect in a growing economy with more AI, more digital commerce, more advanced manufacturing, and more connectivity. The Cato Institute notes that U.S. electricity demand, after staying mostly flat for years, is now climbing because of data centers, AI, manufacturing, and electrification. Cato says U.S. data centers consumed about 183 terawatt-hours of electricity in 2024, roughly 4 percent of total consumption, and projects from the International Energy Agency suggest that could rise to 426 terawatt-hours by 2030. The answer to that is not to crush data centers. The answer is to expand supply and let large users bear their own costs. That is where a lot of current policy thinking breaks down. The Texas Policy Research piece notes that ERCOT has documented one of the sharpest increases in projected load growth in its history, with large-load projects entering the queue faster than generation and transmission can be built. It also flags Senate Bill 6 as an example of lawmakers leaning toward more regulatory control over large-load customers rather than relying on stronger market incentives. That is exactly the kind of drift Texas should resist. Here is the key point policymakers need to understand: grid strain is not proof that data centers are bad. It is often proof that policy has constrained supply, delayed investment, or socialized costs through monopoly utility structures. The Goldwater report argues that high electricity prices are largely driven by policy choices such as mandates, fuel restrictions, and barriers to reliable generation, not by the mere existence of data centers. It even notes that Virginia maintains below-average electricity rates despite hosting one of the largest data-center concentrations in the world. If data centers automatically wrecked affordability, Virginia would be a mess. It is not. That should sound familiar. In my earlier writing, I made the same basic argument: the deeper problem is not private innovation but government distortion through monopoly utility structures, mispriced risk, and political meddling. Data centers are exposing weaknesses in the system. They did not create those weaknesses out of thin air. Connection costs are a legitimate concern, but they still do not justify panic. A large new facility can require substation work, transmission upgrades, and interconnection investments. If those costs are dumped onto ordinary customers, that is a problem. But the fix is not to let government decide which projects deserve power. That means better pricing, faster approvals, more direct contracting, more private generation, and more room for microgrids or other parallel systems. This is where the Cato paper is especially useful. It argues for private electricity grids and consumer-regulated arrangements that allow electricity-intensive users to secure power without forcing everyone else to subsidize them. That is a much better path than trying to ration demand from the Capitol. Responsibility should follow decisions. If a company wants to build a power-hungry facility, then it should have strong incentives to contract, generate, conserve, and invest accordingly. Markets can handle that better than hearings can. Water is the other major concern, and again, lawmakers need more light and less heat. The Texas Policy Research explainer is fair to note that Texas still lacks complete statewide reporting and that both direct cooling use and indirect water use through power generation matter. That uncertainty is real. But uncertainty is not the same thing as a case for blanket restrictions. The Goldwater Institute adds important context: firms are already reducing or eliminating potable-water use in many cases through closed-loop cooling, air-cooled systems, and reclaimed-water designs. Many modern data centers do not need pristine municipal drinking water just to cool equipment, and they have strong incentives to conserve because water costs money. That is how profit and loss work. Waste is expensive. Efficiency pays. This is the bigger lesson policymakers need to absorb. The public conversation too often treats data centers as though they are imposed on passive communities by giant corporations. But Texas has always been strongest when it trusted property rights, voluntary exchange, and personal responsibility more than political control. If a developer wants to buy land, risk private capital, line up power, manage cooling, and meet clear rules, who exactly should decide that project is not worth building? In a free state, that answer should not be “a handful of politicians who are nervous about headlines.” That does not mean no rules. It means the conditional rules. Texas should insist on transparency and clear property-rights protections. It should avoid subsidies that pick winners and losers. It should let prices reflect scarcity. It should allow more generation, faster infrastructure expansion, and more innovation in private power arrangements. That is what abundance looks like. The alternative is the politics of scarcity: bottling up supply, forcing new demand through fragile systems, then blaming growth for revealing the weakness. That is not stewardship. That is surrender dressed up as caution. Texas should be the state that shows the country how to handle this well. Not by pretending the digital economy can run without physical infrastructure. Not by demonizing electricity demand as though growth itself were irresponsible. And not by letting government decide which parts of the future are allowed to exist. Data centers are not the enemy. They are part of the foundation of prosperity, security, and modern life. The right question is not how to stop them. It is how to make Texas abundant enough to support them. Legislative Snapshot
Subscribe and share this with policymakers, staff, or media who need a clearer framework than the usual panic. The state that leads on abundance will lead on technology, too.  Originally published on Substack.
Americans are getting hit again — at the pump, on utility bills, and soon at the grocery store. This week’s surge in oil, diesel, and shipping costs is being framed as a Middle East story. That is only half true. The conflict is real and it matters. But the reason this shock is landing so hard on American families is that Washington left them exposed. Let me give you the straight economics. What Just Happened On February 28, the U.S. and Israel launched Operation Epic Fury — coordinated strikes on Iranian military targets, nuclear sites, and leadership, resulting in the death of Ayatollah Ali Khamenei. Iran’s response was swift and targeted where it hurts most: the Strait of Hormuz. Iran’s Revolutionary Guard declared the strait closed, threatening to set ablaze any vessel attempting to pass. At least five tankers were damaged, two personnel killed, and about 150 ships stranded in open Gulf waters. As of March 4, only five vessel crossings were recorded through the strait — compared to a seven-day average of 27. Maersk, Hapag-Lloyd, MSC, and CMA CGM — the world’s largest shipping firms — have all suspended operations and rerouted vessels around Africa’s Cape of Good Hope, adding weeks to transit times and billions to costs. “When analysts have looked at the things that could go wrong in global oil markets, this is about as wrong as things could go at any single point of failure.” — Kevin Book, Clearview Energy Partners The numbers hitting family budgets are real. As of March 5, the national average for regular unleaded hit $3.25 per gallon — up from $2.98 just one week ago, a 9% weekly surge that is the sharpest in nearly four years. Diesel has climbed to $4.124 per gallon — the highest since December 2023. The benchmark freight rate for Very Large Crude Carriers hit an all-time record of $423,736 per day — a 94% increase in a single weekend. And analysts at Barclays and Goldman Sachs warn Brent crude could reach $100 per barrel or higher if disruptions persist — the same level that sent gasoline to an all-time national average of $5.016 per gallon after Russia invaded Ukraine in 2022. Why Americans Pay Global Prices No Matter How Much We Produce Here’s what I hear constantly — and what my peer-reviewed research on oil and gasoline markets confirms: oil is a globally traded commodity. When a chokepoint carrying roughly 20% of global oil consumption shuts down, prices rise for everyone. About 70% of the oil passing through the Strait goes to China, India, Japan, and South Korea. When their supply tightens, their economies slow, global demand reshuffles, and American families pay more — at the pump, at the grocery store, and on every freight bill embedded in the goods they buy. Our domestic production is a genuine buffer. Without it, we’d already be at $4 or more per gallon. But it is not a wall. The global market is the global market. And right now, the global market is in crisis. This Lands on Families Already Squeezed This shock does not arrive in a vacuum. Before this week, GasBuddy had forecast annual average prices below $3 per gallon for the first time since 2020 — a genuine bright spot for families still recovering from the inflation surge of recent years. That relief is now at serious risk. Economists warn that if prices remain elevated, the retail industry could face a significant cooling period as consumers prioritize fuel and essential groceries over discretionary spending. FedEx and UPS have already implemented general rate increases of 5.9%, but effective shipping costs are rising by as much as 18% once fuel surcharges are factored in. This is Bastiat’s “seen and unseen” in real time. The seen is the conflict in the Gulf. The unseen is the American truck driver, commuter, farmer, and family paying more because policymakers made the economy less adaptable, less productive, and more dependent on decisions made far from home. Government Failure: The Full Picture What we are living through is not just a geopolitical event. It is the compounded consequence of years of government failures — domestic and foreign — that left American families with no cushion. Failure 1: Restrictions on domestic energy supply. The U.S. is the world’s largest oil producer. But decades of permitting delays, leasing restrictions, pipeline blockades, refinery constraints, and ethanol mandates have suppressed what we can produce and process. My peer-reviewed research documents how ethanol legislation distorts gasoline price dynamics, adding costs and volatility that fall directly on consumers. A free country that wants affordable energy does not handicap its own supply base and then act surprised when global turmoil shows up in family budgets. Failure 2: Tariffs as a hidden energy tax. Tariffs are taxes. Before this week’s shock, they were already raising costs on steel, equipment, and industrial inputs the energy sector needs to produce, refine, and move fuel. Protectionism doesn’t sit off to the side as a separate policy debate — it compounds energy costs across the entire supply chain. You cannot claim to care about affordability while defending taxes on the inputs that power the economy. Failure 3: Fiscal recklessness that eroded family resilience. Washington spent trillions of taxpayer dollars in recent years and still left families with less cushion. Electricity prices have climbed 36% over the last five years, and the federal government got it off the way for businesses to build the energy infrastructure or refinery capacity that would give families real protection against shocks like this one. Government did not build a meaningful cushion for working Americans. It helped erode one. Failure 4: Strategic dependence on a volatile region. The world — including America’s key trading partners — remains deeply dependent on Middle Eastern energy flows. As Ali Vaez of the International Crisis Group put it: “Closure of the Strait of Hormuz would disrupt roughly a fifth of globally traded oil overnight — and prices wouldn’t just spike, they would gap violently upward on fear alone.” The policy answer is more domestic production, more free trade, and faster permitting — not less. The Answer Is Not Price Controls It never is. Price caps feel compassionate until the shortages, reduced investment, and supply pullbacks show up. We have run this experiment before — on gasoline, on rent, on prescription drugs. It fails every time because it attacks the symptom while making the cause worse. Cap the price of energy without increasing supply and you get less energy. That is not a theory. That is economics. The Bottom Line Energy price shocks are not simply acts of fate. They are the result of geopolitical risk colliding with bad policy choices made over many years. War triggered this spike. Government failures made it more painful than it had to be. As Milton Friedman taught us: don’t judge policy by its intentions — judge it by its results. Families are the ones paying for the gap between rhetoric and reality. They deserve better. Five Takeaways for Policymakers 1. Unleash domestic energy production now. Fast-track permitting, expand pipeline and refining capacity, and stop treating domestic abundance as a political problem. Every barrel suppressed by regulatory red tape is a barrel held hostage to global volatility. 2. End tariffs. Tariffs on steel, aluminum, and industrial equipment compound the price shock families are already absorbing. Free trade lowers costs — protectionism raises them. 3. No price controls — full stop. A gas price cap sounds compassionate. The unseen is shortages, long lines, and reduced investment in the production that would bring prices down naturally. We’ve run this experiment. It fails. 4. End the Strategic Petroleum Reserve so the private sector best allocated oil rather than holding oil out of the market thereby driving prices higher. 5. Make affordability the governing standard. Every energy policy decision should be evaluated first by its impact on the cost of living for working Americans — not its appeal to any political constituency. Closing I’ve spent years studying how energy prices move through supply chains and how government intervention distorts them. What the data — and Friedman and Bastiat — consistently show is that the market, when free to operate, is the fastest and most reliable path to lower prices. Government failure is what makes energy expensive. Free markets is what makes it affordable. Policymakers still have time to respond. Families don’t need more speeches about compassion while Washington keeps making energy scarcer and more expensive. They need more supply, more freedom, and more discipline. That is how you lower prices. That is how you strengthen the economy. And that is how you let people prosper  Originally published on Substack.
America is in the middle of a quiet but consequential infrastructure race. Demand for cloud computing, artificial intelligence, digital payments, telehealth, logistics, and cybersecurity is exploding. The physical backbone of all of it is data centers. Whether states attract that investment or drive it away will hinge less on technology and more on policy choices. A new report from the Goldwater Institute makes the case clearly: data centers are not a threat to economic prosperity. They are essential infrastructure for the modern economy. Yet lawmakers across the country are responding with restrictions, moratoria, and energy rules rooted in scarcity thinking rather than market realities. This debate is not really about data centers. It is about whether states choose abundance or artificial scarcity. Data Centers Power Everyday Life Data centers are often discussed as if they were niche projects for “big tech.” In reality, they support daily economic activity most people take for granted. Navigation apps, cloud storage, online banking, remote work platforms, streaming services, and AI tools all rely on data centers operating continuously behind the scenes. Artificial intelligence only heightens the stakes. AI systems require immense computing power to train and operate, and that capacity does not live on personal devices. It lives in data centers. States that want the productivity gains AI promises cannot reject the infrastructure that makes those gains possible. As Goldwater explains, states with predictable permitting, clear land-use rules, and respect for property rights are attracting billions in private investment. States that politicize infrastructure are not stopping growth. They are redirecting it elsewhere. The Energy Argument Is Backward The most common objection to data centers is electricity demand. Critics warn that growth will overwhelm grids and crowd out households and small businesses. That concern sounds reasonable until you examine the assumptions underneath it. Most demand forecasts assume data centers must draw their full energy load from the grid. That assumption is wrong. Many data centers already generate power on site or plan to do so. With the freedom to innovate, they can deploy small modular nuclear reactors, clean reliable energy systems, and other private generation technologies to meet their own needs and, in some cases, provide surplus power back to the grid. This is where insights from a recent Cato Institute briefing paper are critical. Cato explains how private electricity grids and consumer-regulated power arrangements offer a parallel path to reliability outside monopoly utility systems. When consumers and firms are allowed to contract for power directly or generate it themselves, energy supply expands, innovation accelerates, and risk is better aligned with decision-makers. If electricity demand estimates assume 100 percent grid dependence, they exaggerate the problem and ignore the solution. Policy Is Creating the Scarcity It Claims to Fear Unfortunately, some states are moving in the opposite direction. Texas passed legislation last year that reportedly restricted data centers from producing their own electricity while simultaneously offering targeted tax incentives. That approach discourages self-generation while shifting risk onto captive ratepayers. South Carolina and other states are now debating similar paths. At a recent FITSNews forum, participants asked how states should redefine economic development for the technology age. The wrong answer is to block or micromanage the infrastructure of that economy. Polling from the South Carolina Policy Council shows voters care about affordability and growth, not symbolic regulation. That skepticism is rational, especially in states still dealing with the fallout from failed government-run energy projects like V.C. Summer, where ratepayers were forced to subsidize political decisions that collapsed. Ratepayers Should Not Be the Backstop There is a legitimate concern buried in this debate: households and small businesses should not be forced to subsidize large private users if utilities expand capacity to serve them. That concern is valid. But bans and restrictions are not the answer. The answer is competition. Allow off-grid generation, private power contracts, and parallel electricity systems. Let large users internalize their energy costs instead of socializing them. When firms pay for their own power, they invest in efficiency, reliability, and innovation. Markets do that naturally. Monopoly utilities do not. As I argued previously in Stop Blaming Data Centers. Start Fixing Energy Policy, data centers are not the cause of grid stress. They expose weaknesses created by decades of overregulation and centralized control. Abundance Beats Regulation Every Time The central lesson from both the Goldwater Institute and Cato Institute research is the same: competition is the best regulator. Firms disciplined by markets respond faster, allocate resources more efficiently, and innovate continuously. Heavy-handed regulation freezes technology in place and locks in today’s inefficiencies. The same logic applies to water use. Modern data centers recycle water extensively and are often more efficient than traditional industrial users. The evidence does not support claims that they pose a significant strain on water resources. States that choose abundance expand supply, lower costs, and attract investment. States that choose scarcity ration growth and watch opportunity leave. A Final Note for Lawmakers Data centers are coming whether policymakers like it or not. The only real question is where they will be built. States that embrace private energy generation, competitive electricity markets, and regulatory humility will win jobs, capital, and technological leadership. States that respond with fear-driven rules will export those benefits elsewhere. The choice is not between growth and responsibility. The choice is between markets that adapt and politics that stall. Let people build. Let energy supply expand. Let competition work. Recap for Legislators:
 Originally published on Substack.
The loudest voices attacking data centers today are the same ones who’ve ignored America’s crumbling electric grid for decades. Conveniently, they’ve found a shiny distraction: AI, cloud computing, and high-density data centers. But the truth—confirmed by federal research, independent analysts, and basic economics—is that data centers are not driving higher electricity prices. Government-owned and government-regulated utilities are. If policymakers spent half as much time fixing their own failures as they spend blaming innovators, Americans would already have lower bills. This isn’t a tech problem. It’s a government problem. And until we acknowledge that reality, electricity prices will continue rising no matter how many data centers get built—or blocked. Data Centers Are Now Core Infrastructure The modern economy runs on data centers just like past generations ran on railroads and highways. Without advanced compute power, entire industries—from health care and defense to logistics and manufacturing—grind to a halt. The Wall Street Journal calls this boom a “gold rush” for construction workers, with higher wages and massive demand for skilled labor as the industry faces a shortage of nearly 439,000 workers. That doesn’t happen in industries declining or draining the economy. It happens in sectors creating real value. Small towns know this. Fox Business reports that Meta’s facility in Social Circle, Georgia is transforming the local tax base and creating high-paying jobs for families who haven’t seen this kind of opportunity in decades. These are not burdens—they are engines of prosperity. Electricity Prices Are Rising Because the Grid is Government-Run, Not Because of Data Centers Let’s cut through the noise: electricity bills are rising because government-owned and government-regulated utilities have under-invested in infrastructure, mispriced risk, and politicized energy decisions for decades. Data centers didn’t cause this. But they’re getting the blame. According to PBS, electricity bills rose more than 5% year-over-year, but the causes are far more complex than AI demand. A major Department of Energy–commissioned report by Lawrence Berkeley National Laboratory and The Brattle Group examined price trends from 2019–2024. The conclusion is devastating for the anti–data center narrative: Data centers were not a driver of higher electricity prices. Government failures were. Rates increased because of:
And here’s the kicker: states with heavy data center growth often saw inflation-adjusted electricity price declines because large, predictable loads help spread fixed costs more efficiently. Both The Washington Post and Politico reported the same truth: the grid is expensive because we let government run it. Even Energy Secretary Chris Wright told PoliticoPro that data centers will actually lower prices over time by improving utilization of existing grid assets. You want lower energy prices? Reform the grid. You want reliability? Privatize it. Water Use: Data Centers Innovate, Government Doesn’t Water panic headlines make for great clickbait, but they crumble fast. Modern facilities increasingly rely on closed-loop cooling, air-cooling systems, and recycled water technologies. Some are moving toward net-positive water practices. Meanwhile, government-run water systems leak billions of gallons a year because pipes haven’t been replaced in half a century. Yet data centers get the blame? Please. If the public sector ran its water systems with even half the efficiency of the private sector, we wouldn’t be having this conversation. Privatize Utility Districts—Or Expect Higher Bills Forever Here’s the uncomfortable truth political leaders won’t say aloud: America’s grid problems are rooted in government ownership, government regulation, and government distortion—not private innovation. Public utility districts, municipal utilities, state-controlled grids, and politically run transmission authorities are failing precisely because they are insulated from competition. They misallocate capital, delay maintenance, ignore price signals, and rely on ratepayers to bail out mistakes. It’s time to say what free-market economists have known for decades: Privatizing utility districts and introducing real competition would do more to cut electricity prices than any government program ever will. Let private operators price risk correctly. Let them compete on efficiency. Let them build modern transmission lines without political bottlenecks. Data centers would thrive in this environment—and so would consumers. Bottom Line Here’s what the evidence makes undeniable:
If America wants a competitive future, the path is clear: Build more data centers. Privatize failing government utilities. Let markets work. Call to Action If this matters to you—if you’re tired of government mistakes being blamed on the private sector—share this piece. Bring it to policymakers. Start telling the truth about what’s holding America’s grid back. |
Vance Ginn, Ph.D.
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