GINN ECONOMIC CONSULTING
  • Home
  • SERVICES
  • Media
  • RESEARCH
  • Speaking
  • Blog
  • About
  • Home
  • SERVICES
  • Media
  • RESEARCH
  • Speaking
  • Blog
  • About

The end of the ‘winners and losers’ economy is good for America

6/19/2025

0 Comments

 
Picture
Originally posted to The Washington Examiner. 

Solar stocks plunged on Tuesday after the Senate released its version of what President Donald Trump has called the “big, beautiful bill.” While some anti-growth carveouts remain, one of its strongest reforms is how it begins to unwind former President Joe Biden’s green energy subsidies. This shift marks a long-overdue correction, ending an era where Washington picks winners and losers in the energy economy.

The market’s reaction was revealing. Overinflated by years of preferential treatment, many renewable companies are now adjusting to reality — one where their products compete on merit, not mandates. That’s a good thing.

Under Biden, energy policy was driven by top-down planning and heavy-handed regulation. The results? Higher prices, constrained supply, and a fragile grid. But under Trump, we’re seeing a reorientation: more energy abundance and a return to common-sense competition.

We don’t need Washington trying to engineer our energy future; we need it to get out of the way. Stripping tax favoritism, streamlining environmental permitting, and unleashing domestic production will lower prices and improve reliability. People in markets, not bureaucrats, should decide where capital flows.

This fact extends beyond energy. The Trump administration has wisely begun dismantling financial regulations that have weaponized the government against innovation and consumer choice. One key win: the executive order halting any advance on a Federal Reserve–issued central bank digital currency, which would have been a surveillance tool masquerading as modernization.

In another victory for freedom and innovation, the Securities and Exchange Commission dropped its lawsuit against Binance, signaling the end of an era in which cryptocurrency was treated more like a threat than a technology. The Biden administration’s hostility toward decentralized finance stifled innovation. Trump is helping reverse that trend, encouraging financial innovation and clarity.

Then there’s the Consumer Financial Protection Bureau’s dropped case against Zelle — a legally flimsy attempt to hold banks liable for fraud committed by third parties. Peer-to-peer payments aren’t inherently risky; bad actors are. The right approach is strengthening consumer education and fraud prevention, not punishing tech-enabled payment tools.

The Biden Department of Justice’s lawsuit against Visa’s debit card business was another case of political antitrust, targeting a company not for consumer harm but for being too successful. The sin? Having a 60% market share in a highly competitive industry with no hint of predatory behavior and no shortage of payment choices for consumers and businesses. 

Thankfully, a shift is underway. Assistant Attorney General Gail Slater has emphasized a return to data-driven enforcement and sound economic reasoning in antitrust. That’s a necessary course correction from the ideologically driven activism of recent years.

Still, regulatory bloat remains. Trump should go further by reversing the Biden-era expansion of the Community Reinvestment Act, which pressures banks to prioritize geography and politics over creditworthiness. That’s distortion, not inclusion. When credit is misallocated for political goals, financial stability and the people it’s supposed to help suffer.

Energy permitting is another frontier. Under current laws, such as the National Environmental Policy Act, critical infrastructure is delayed for years. We must accelerate approvals for pipelines, liquefied natural gas terminals, and power plants if we want a resilient energy grid and lower prices. Energy abundance should not be held hostage to outdated processes and red tape.

What ties all this together is a single, clear principle: Government should not control economic outcomes — it should set the rules of the game and then get out of the way. America doesn’t need a new round of industrial policy or neopopulist planning. We need a recommitment to classical liberalism, grounded in free-market economics, limited government, and individual freedom.

Industrial policy, whether from the left or right, assumes Washington knows better than markets. It doesn’t. The history of failed subsidies, protectionist trade wars, and crony corporatism proves it. If we want more innovation, investment, and opportunity, the best policy is humility: Let people prosper.

That starts by ending the “winners and losers” economy. No more special favors, mandates, or market manipulation. Just a level playing field where success is earned, not granted.
0 Comments

Government Price Controls on Credit Cards Hurt People

6/10/2025

0 Comments

 
Picture
Originally posted at Texans for Fiscal Responsibility.

As Congress revives the misnamed Credit Card Competition Act and state legislatures push bills to regulate swipe fees, policymakers are quietly setting the stage for a major disruption in how Americans access credit. These proposals aim to cap interchange fees—those small charges behind every card swipe—but the consequences won’t be small.

Interchange fees may not make headlines, but they help keep the modern credit ecosystem running. On a typical $100 transaction, around $2 in interchange fees flows from merchants to the banks and networks that manage fraud protection, secure payments, and rewards programs. In return, consumers get safer transactions and access to credit, and merchants get more customers.

The bills in a few states, like Texas’s HB 4124, which died this year, aim to ban interchange fees on tax and tip portions of transactions. That might sound like a narrow carve-out. But it’s not. It’s a price control, and price controls are costly. Like a leak in the hull, they start small and quickly sink the ship.

I don’t come at this from theory. I grew up in a lower-income single-mom household in South Houston, Texas. My dad had epilepsy and received disability income. My mom dropped out in the tenth grade and worked hard to make ends meet. We didn’t qualify for most welfare, and credit cards were the fallback when times got tough. My mom didn’t use them for luxuries—she used them for groceries, utility bills, and school clothes. That access mattered.

Now imagine her in today’s regulatory environment, where policymakers treat credit like a vice rather than a necessity. The Credit Card Competition Act would force issuers to use multiple payment networks, undermining fraud security and disrupting rewards programs, like the Chase Southwest card I use for travel with my family. Meanwhile, proposals from Sens. Elizabeth Warren and Bernie Sanders to cap credit card interest rates at 10% would cut off millions of higher-risk borrowers, disproportionately harming those with the fewest alternatives.

This all echoes the failed logic of the Durbin Amendment of 2010. That policy capped debit card fees and promised consumer savings. Instead, no-charge checking accounts were cut in half, debit rewards disappeared, and according to the Government Accountability Office, less than 2% of retailers passed on any savings. The real beneficiaries were the big-box stores, not everyday Americans.

Supporters claim they’re protecting consumers. But who are they really protecting when 22% of Americans are unbanked or underbanked, according to the Federal Reserve? When you price credit below its risk, lenders stop offering it. That leaves working families to turn to payday lenders or pawn shops—or worse, to go without.

Meanwhile, the Federal Reserve—the very institution regulators want to give more power over payment systems—has lost more than $200 billion in operating losses since 2022 due to its mismanagement of interest rate risk. And now it wants to fix the “problem” of interchange fees?

If lawmakers genuinely want to improve access and competition, they should focus on reducing barriers for smaller banks and fintech innovators, not micromanaging transaction fees or capping risk-based interest rates. These reforms would encourage real competition, protect consumers, and avoid the failed playbook of regulatory overreach.

Milton Friedman once warned that “one of the great mistakes is to judge policies and programs by their intentions rather than their results.” We should heed that wisdom now more than ever.

The intention to lower swipe fees and protect consumers is good in a soundbite. However, the result will be fewer rewards, higher costs, and less access, especially for working Americans. That’s not financial protection. That’s economic sabotage.
0 Comments

Federal action, not Texas' SB 946, is best way to stop political 'debanking'

5/19/2025

0 Comments

 
Picture
Originally published at the Austin American-Statesman. 

Texas conservatives are rightly fed up with political bias in banking and Washington’s failure to stop so-called "debanking," which has targeted some bank customers across the political spectrum in Texas and nationwide. However, the root issue isn’t banks acting independently, but rather federal regulatory pressure and political mandates that distort market signals.
​
The Texas Legislature's answer, Senate Bill 946, misfires and risks harming the very consumers and community banks it claims to protect. The remedy, instead, should come from Washington.

SB 946, which has passed the Texas Senate and is pending in the House, would prohibit financial institutions from denying services based on a customer’s political or religious beliefs. While that sounds straightforward, it injects state-level micromanagement into a deeply interconnected national banking system that serves Texans and customers nationwide.

Texas has earned a reputation as one of the best states to start and grow a business by avoiding overregulation, keeping costs low and letting competition, not bureaucracy, drive better outcomes. SB 946 runs counter to that legacy. It would increase compliance costs and weaken already-stretched community banks that may end up with less to lend after spending even more on compliance.

Conservatives should not create new tools for regulation based on an agenda.

If one accepts the idea that state governments can dictate who banks must do business with, they lose the moral high ground. What stops California from passing a law requiring banks to deny services to pro-life groups, gun manufacturers or religious schools? This approach risks turning financial institutions into battlegrounds for political agendas.

Texans should care because a patchwork of conflicting state-level banking rules will reduce consumer choice, raise fees and shrink the number of banks willing to operate across multiple states. Unlike Wall Street giants, Texas-based community banks can’t afford teams of lawyers to navigate a maze of conflicting regulations.

The Republican-led Congress, with support from President Donald Trump and led by U.S. Sen. Tim Scott of South Carolina, is advancing the Financial Institution Regulatory Modernization (FIRM) Act to curb government-driven debanking by removing "reputational risk" from regulatory scrutiny and establishing a fair access standard nationwide. This is a constitutionally grounded and targeted response to a legitimate problem in interstate commerce.

Texas state Sen. Tan Parker's resolution in support of the FIRM Act is a welcome and productive step forward. It recognizes that banking is a national issue requiring a consistent federal solution, not a patchwork of conflicting state laws. His leadership outlines the right path forward: backing federal action that restores fairness and access without overregulating the private sector.

Usually, I don’t support federal solutions, but this is one of the rare cases where it’s both appropriate and necessary. Banking is clearly interstate commerce, and a single, minimal regulatory standard is far better than a state-by-state patchwork that creates confusion and restricts access. That’s how we protect choice, encourage competition, and allow markets — not politics — to work.

Banking isn’t just another industry. It underpins everything from mortgages and payroll to national security and sanctions against hostile actors. Fragmenting this system will only increase costs and reduce access to resources. We’ve seen what happens in the insurance market when each state imposes mandates: higher costs, fewer choices and less innovation.

It’s also important to acknowledge that not every debanking claim is politically motivated. Some accounts are closed for valid reasons, such as suspected fraud, money laundering or other compliance risks. Banks need discretion to manage risk, and SB 946 could undermine that by imposing overly broad restrictions. What we need instead is transparency and consistent, fair rules that protect both consumers and the integrity of the financial system.

Conservatives should resist the temptation to regulate out of frustration. The best response to ideological banking isn’t more mandates—it’s reinforcing market competition and supporting innovative, limited federal reforms where constitutionally appropriate.

Let’s not undermine the important work already underway in Washington to restore trust and order to the financial system. Texas should lead with principle, not reaction.
0 Comments

Texas Should Reject HB 149: AI Regulation Gone Too Far

5/6/2025

0 Comments

 
Picture
Originally posted on X.

Texas is on the verge of making a huge mistake. And it won’t just cost us money—it could cost us the future.
HB 149, the second iteration of last session’s failed HB 1409, aims to regulate artificial intelligence under the banner of “responsibility.” But don’t be fooled. This bill—authored by Rep. Giovanni Capriglione—would expand government, stifle innovation, and impose California-style overreach, undermining the freedom that makes Texas strong.

According to the fiscal note, HB 149 would cost taxpayers more than $55 million over five years, grow government by 20 new full-time employees, and empower the Attorney General to penalize developers and businesses for undefined “discrimination,” including on political viewpoints and biometric identifiers. It opens the door to chilling speech, increasing litigation, and dragging Texas down the same path as progressive AI legislation that already failed in Connecticut and California, but unfortunately passed in Colorado.

Why is Texas copying California? The Texas Senate Committee on Business and Commerce held a hearing on May 1 for testimony on HB 149. But the Committee left it pending, where the bill should stay and die.

By contrast, HB 3808, by Rep. Brian Harrison, is a model of restraint. It would create a temporary advisory council focused on state agency use of AI—not private sector innovation. It sets up a sandbox environment to allow safe testing of new technologies and sunsets in 2029. No bureaucracy. No sweeping mandates. No innovation-killing red tape. Unfortunately, the Texas House's Delivery of Government Efficiency (DOGE) Committee hasn't heard this bill yet. It may not, given that Rep. Capriglione is the chair of it and wants to push his big-government bill.

Even better than HB 3808? Do nothing. If lawmakers aren’t confident, then don’t legislate out of fear. Let freedom work.

We don’t need to ban, restrict, or punish technology because some policymakers are uncomfortable with progress. Texas should lead with humility, freedom, and a commitment to learning before regulating.

The Texas Senate must save our tech future. It can stop HB 149 before it becomes law, back HB 3808 as a better alternative, or simply do nothing—and let freedom work.
​

Let’s not build a $55 million bureaucracy to fear the future. Let’s lead it instead!
0 Comments

Biden's OCC Breach Shows Who the Real Insider Threat Is

4/23/2025

0 Comments

 
Picture
Originally posted at RealClear Markets.

One of the federal government’s top bank regulators just got caught leaving the vault wide open. The Office of the Comptroller of the Currency (OCC), a bureau within the Treasury Department, admitted that it was the victim of a massive data breach—one that lasted for nearly two years and began under the Biden administration. It’s a scandal that should shake public trust in regulatory oversight to its core.

While Biden officials were busy lecturing banks about cybersecurity, their regulators failed to follow the most basic protocols. The breach exposed two years of sensitive internal data about U.S. banks—information that, if exploited, could create serious vulnerabilities in the financial system. And it all reportedly began with a simple failure: an OCC employee didn’t use multifactor authentication. That rookie-level mistake gave hackers the keys to the agency’s email system.

This wasn’t a one-off glitch. The breach spanned nearly half of Biden’s term. Though full details are still emerging, the Treasury Department was also targeted by Chinese state-sponsored actors in late 2024, raising serious questions about whether foreign adversaries were once again behind this attack. The OCC only discovered the intrusion in the opening days of the new Trump administration. That timing is no coincidence.

Under Biden, regulators didn’t just fail to stop this breach—they didn’t even know it was happening.

While the OCC was leaking bank records to hackers, then-Acting Comptroller Michael Hsu was congratulating himself for how well banks handled the CrowdStrike outage that briefly disrupted global IT systems in 2024. In a public statement, he claimed that “supervisory efforts” by the OCC helped banks avoid major issues. The reality? Banks succeeded because of their cybersecurity investments, not because of anything the OCC was doing. The real cyber risk wasn’t in the banking sector at all—it was embedded deep inside the government’s systems.

This episode exposes more than just bad security—it reveals how dangerous Washington’s regulatory overreach has become. For years, the OCC has forced banks to hand over mountains of proprietary data through exhaustive examination processes. That data, once handed over, is stored by a government agency that just proved it can’t keep it safe. This isn’t just inefficient. It’s reckless.

Let’s be clear: Banks are already heavily regulated and are some of the most cybersecure institutions in the country. In 2022 alone, the U.S. banking industry spent over $200 billion on technology, much of it dedicated to cybersecurity. They have skin in the game. They protect customer data because failure isn’t an option. But when banks give their most sensitive internal data to the OCC, under legal mandate, they are relying on Washington to hold up its end of the bargain.

Biden’s OCC didn’t. It failed spectacularly.

Now, under the Trump administration, there’s a real opportunity to fix this mess. The OCC now reports to the Office of Management and Budget, led by my former boss, Russ Vought. He understands that bloated agencies with no accountability are a threat to both liberty and economic security. The OCC needs reform, starting with a complete overhaul of its examination process.

It’s time for the agency to stop demanding excessive data and instead adopt a “minimum necessary” model, a concept common in data privacy policy. Only collect what’s essential to assess financial health. The more data the OCC demands, the more it becomes a target—and a liability.

Regulators should be held to the same standards they impose on the private sector. If a bank had failed to implement multifactor authentication and were breached for two years, heads would roll. Fines would be issued. Shareholders would demand answers. The same accountability must apply to the government.

The OCC also needs to shift its focus back to its core purpose: ensuring the safety and soundness of the banking system. That means ditching political distractions and regulatory sprawl and concentrating on real financial risks, not micromanaging operations or harvesting every bit of internal bank data it can get its hands on.

There’s a lesson here: the greatest threat to the financial system isn’t just foreign hackers—it’s a government regulator that demands security perfection from the private sector while failing to follow its own rules.

If we want a secure financial system, we need secure regulators. Let the Trump administration finish what Biden’s couldn’t—or wouldn’t—do: clean house at the OCC, demand accountability, and restore a regulatory framework that protects, rather than endangers, America’s banks.
​
Because in the end, the biggest “insider threat” might just be the insiders in Washington.
0 Comments
<<Previous

    Vance Ginn, Ph.D.
    ​@LetPeopleProsper

    Vance Ginn, Ph.D., is President of Ginn Economic Consulting and collaborates with more than 20 free-market think tanks to let people prosper. Follow him on X: @vanceginn and subscribe to his newsletter: vanceginn.substack.com

    View my profile on LinkedIn

    Categories

    All
    Antitrust
    Banking
    Biden
    Book Reviews
    Budgets
    Capitalism
    Carbon Tax
    China
    Commentary
    Congress
    COVID
    Debt
    Economic Freedom
    Economy
    Education
    Energy Markets
    ESG
    Fed
    Free Trade
    Ginn Economic Brief
    Healthcare
    Housing
    Immigration
    Inflation
    Interview
    Jobs Report
    Kansas
    Let People Prosper
    Licensing
    Louisiana
    Medicaid
    Medicare
    Minimum Wage
    Occupational Licensing
    Pensions
    Policy Guide
    Poverty
    Price Control
    Property Taxes
    Regulation
    Research
    School Choice
    Socialism
    Speech
    Spending Limits
    Taxes
    Technology
    Testimony
    Texas
    This Week's Economy
    Transparency
    Trump

    RSS Feed

Proudly powered by Weebly