 Overview The Trump administration, supported by a Republican-led Congress, has a pivotal chance to reverse the damage inflicted by the Biden administration's misguided antitrust policies. This report outlines the path to unleashing America’s tech potential through innovation, competition, and free-market principles. Key Points
Conclusion The report highlights a roadmap for the Trump administration and Congress to promote free-market policies, secure America’s technological leadership, and prioritize innovation and economic growth. Confirming regulatory leaders who support these principles is vital to achieving these goals.
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Today, we mark the inauguration of Donald J. Trump as President of the United States. As he takes office, many are eager to see significant policy shifts to boost the economy, create jobs, and empower American businesses. The first 100 days will be crucial in shaping the path to prosperity through executive actions, strong leadership, and strategic pressure on Congress. This period could see bold moves to cut government spending, unleash energy potential, and create opportunities for workers and businesses.
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com. As President Biden’s term ends, we see a flurry of last-minute legislation. Meanwhile, President-elect Trump is gearing up for his inauguration next week, setting the stage for a new chapter in national politics. The policy landscape is heating up at the state level as legislative sessions get underway. In Texas, the 89th Legislative Session kicks off tomorrow, and I’ll be closely monitoring key bills.
In this week's episode, I discuss these topics and more. You can watch it on YouTube below, listen to it on Apple Podcast or Spotify, or visit my website vanceginn.com for more information.  Originally published at American Institute for Economic Research.
President-elect Donald Trump recently reignited the minimum wage debate, calling the current federal minimum of $7.25 an hour “a very low number” and saying, “I would consider” raising it. He also acknowledged that a one-size-fits-all approach “wouldn’t work,” pointing to vast differences in living costs between states like Mississippi and California. These comments, made during a recent interview, highlight the ongoing tension surrounding wage mandates and their nationwide impact on workers and businesses. While some states are moving aggressively toward higher pay floors, the consequences of these policies remain deeply problematic. In 2025, 23 states and 65 cities and counties will raise their minimum wages. Three states — Illinois, Delaware, and Rhode Island — will reach $15 an hour for the first time, joining seven others already there or above. Local jurisdictions are pushing even further, with some, like Burien, Washington, setting minimum wages as high as $21.16 for large employers. These increases aim to help workers keep up with the cost of living, but they come with significant unintended consequences. Higher minimum wages often accelerate automation as businesses seek alternatives to paying higher labor costs. Fast-food chains, for instance, are replacing cashiers with self-service kiosks, which don’t require benefits, breaks, or overtime. This shift creates opportunities for higher-paying jobs in designing and maintaining these machines but eliminates entry-level positions that many low-skilled workers rely on. The same trend is in other industries, from warehousing to customer service, where robots and AI tools are increasingly replacing human labor. Policymakers unintentionally fast-track this transition by mandating higher wages, leaving many workers behind. At the same time, rising labor costs make outsourcing and offshoring more attractive to businesses. Manufacturing jobs face additional pressure as domestic wages climb artificially based on government mandate rather than profitability. Even customer service roles are increasingly outsourced to countries with lower wages, reducing opportunities for American workers. Instead of lifting people out of poverty, these policies often shift jobs to foreign markets, undermining their intended purpose. The consequences of wage mandates don’t stop there. Higher minimum wages act as a cost-of-living floor, driving up prices for goods, services, and housing. Businesses pass on the increased costs to consumers, and in states like California, where fast-food workers now earn $20 an hour in some cities, this dynamic is particularly stark. The result is a higher cost of living that erodes any gains from larger paychecks, leaving workers no better off than before. These pressures are especially acute for small businesses operating on thinner margins and struggling to absorb rising labor costs. One often-overlooked consequence of minimum wage hikes is their impact on illegal immigration. As businesses face higher labor costs, some turn to undocumented workers who accept wages below the legal minimum. This practice distorts the labor market and creates unfair competition for lawful employees. By incentivizing illegal hiring, wage mandates contribute to a cycle undermining the workers they are meant to protect. Unemployment is another harsh reality of wage mandates. When businesses can’t afford to pay workers at mandated rates, they cut jobs, reduce hours, or halt hiring. The minimum wage becomes irrelevant if low-income and entry-level workers can’t find employment. Many are pushed toward government assistance, perpetuating cycles of dependency. This outcome is a stark reminder that wage mandates often harm the people they intend to help. These consequences underscore the flaws in a federal minimum wage. Trump was right to note that economic conditions vary dramatically between states like Mississippi and California, making a uniform wage floor untenable. States with lower living costs often have smaller business margins, and higher wage mandates can force closures or relocations. Even in high-cost states, wage mandates face resistance. In 2024, voters in California and Massachusetts rejected proposals to raise the minimum wage for specific groups of workers, citing concerns about higher prices and job losses. Rather than imposing wage floors, policymakers should focus on pro-growth solutions that allow wages to rise naturally. Spending, taxing, and regulating less fosters competition so businesses thrive and workers benefit. When businesses grow and compete for employees, wages rise organically, reflecting productivity and market conditions. These increases are sustainable and equitable, avoiding the unintended consequences of mandates. When labor costs are artificially inflated, businesses must adapt, often in ways that harm workers. A better strategy is to create opportunities for skill development and innovation, ensuring workers can earn more through higher productivity rather than government intervention. Trump’s suggestion that federal wage mandates “wouldn’t work” reflects an important truth. Allowing states — or better yet, markets of people negotiating voluntarily — to determine wages ensures they reflect local realities. By removing wage mandates, businesses and workers could negotiate pay based on skills, experience, and regional costs, creating a more dynamic and inclusive labor market. The minimum wage hikes set to take effect in 2025 will undoubtedly impact millions of workers, but they also serve as a reminder of the economic trade-offs involved. From job losses and automation to higher costs and illegal hiring, these policies carry unintended consequences that undermine their intended benefits. A better path forward lies in market-driven solutions empowering workers and businesses.  Listen here!
On this episode of the podcast, Vance Ginn, former Trump White House economic advisor, dives into the pressing economic challenges facing the new Trump administration and offers solutions rooted in pro-growth policies. Ginn outlines strategies to curb inflation and address the staggering $36 trillion national debt, emphasizing the need to cut government spending, implement tax reform, deregulate industries, and pursue free trade agreements. The former Office of Management and Budget Chief Economist also evaluates the impact of Trump’s plans to impose new tariffs, the effectiveness of Trump-era tax cuts, and the Department of Government Efficiency's role in reducing wasteful spending. Ginn makes a bold case for eliminating the federal minimum wage to foster competition and create new jobs. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info. This week’s newsletter dives into the critical issues shaping economic policy, from President-elect Trump’s sweeping tariff proposals to the challenges Texas faces under rising government spending. As Americans brace for potential economic consequences, now is the time for bold reforms to protect taxpayers and ensure economic freedom thrives. Watch the episode on YouTube below, listen to it on Apple Podcast or Spotify, and visit my website for more information.
The U.S. labor market rebounded in November as the economy added 227,000 new jobs, according to the Bureau of Labor Statistics’ monthly report. The economy recovered from the labor strife and economic fallout from two devastating hurricanes, though some of the indicators within the jobs report are mixed. NTD spoke with Vance Ginn, president of Ginn Economic Consulting and the former chief economist at the Office of Management and Budget from 2019–2020 during the previous Trump administration, on December 6, 2024: https://www.ntd.com/former-white-house-economist-skeptical-jobs-news-is-all-positive_1033130.html.
Don’t miss my interview on NTD News about excessive government spending and how Trump and DOGE could make an impact.
 Originally published at Real Clear Policy.
Elon Musk and Vivek Ramaswamy recently published the legal background, justification, and their plans for the Trump-created temporary, non-governmental DOGE, Department of Government Efficiency. They have numerous ideas of how to clean up what the military calls a “target-rich environment” of federal sloth, waste, inefficiency, corruption, and demonstrably illegal activities by the administrative or “deep” state. Start with Medicaid. It is highly dollar inefficient, spending too much while getting too little value – timely access to medical care – wasting billions of taxpayer dollars. In 2023, CMS (Centers for Medicare and Medicaid Services) in Washington spent more than $860 billion running a program it is legally prohibited from running. When regulated by Washington, Medicaid is ILLEGAL! Section 1801 of the Amendment to the Social Security Acts of 1965 that created Medicaid reads as follows. Note the Section’s title and Congress’ explicit prohibitions. SEC. 1801. PROHIBITION AGAINST ANY FEDERAL INTERFERENCE “Nothing in this title [the law] shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.” Despite the specific intent of the law, over decades, CMS (Centers for Medicare and Medicaid Services) has taken control of eligibility standards, benefits, i.e., medical care provided, and the payments allowed. Washington applied a one-size-fits-all approach for Medicaid enrollees in every state program. If the DOGE wants to cut nearly one trillion dollars from the federal budget, and simultaneously improve (!) access to medical care, follow the Medicaid law as written. The Affordable Care Act is a good example of over-regulation of Medicaid by Washington, but there were dozens of others. Most annual OBRAs (Omnibus Budget Reconciliation Acts) since 1975 have contained some section that increased Medicaid benefits, expanded eligibility, or reduced payments. A program originally intended for less than four million “Old-age, Survivors, and Disab[led]" Americans, exploded by December 2022 to include 92.3 million enrollees. The federal government gave 27.6 percent of the U.S. population no-charge-to-consumer Medicaid coverage paid by taxpayers. The already exorbitant cost of this program will increase even further because California and Oregon have added illegal immigrants to their Medicaid rolls. Musk and Ramaswamy intend the DOGE to use three approaches to improve federal efficiency: regulatory rescissions (canceling regulations), administrative reductions (“reductions in force”), and cost savings, such as radical simplification and rigorous auditing of government procurement. They utilize all three approaches when implementing Section 1801. As prescribed by law, stop federal interference in state Medicaid programs other than providing block grants. Eligibility, benefits, payments to insurance companies as well as to providers should be decided by the states, not the federal government. Reports on medical and financial results of Medicaid programs should go to respective state legislatures, not Washington. Discontinue the FMAP (Federal Medical Assistance Percentage) formula which incentivizes spending and discourages saving. Currently, the more a state spends on its Medicaid program, the more taxpayer funds it receives from Washington. Make federal funding a negotiated, fixed amount. Washington can then budget for a known quantity, not a variable dependent on states’ budgeting. With block grants, states will operate their programs as they know best, adding whatever state funds are necessary to support their medically vulnerable residents. In their Wall Street Journal blueprint for improving government efficiency, Musk and Ramaswamy wrote, “we will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws.” They could have been (and hopefully were) writing about Section 1801. Activating the legal prohibition against “any federal interference” with state-controlled Medicaid programs is precisely what needs to be done to cut billions in costs and at the same time save American lives. All current federal regulations that control state Medicaid programs would be rescinded. The current CMS/Medicaid actuaries and accountants, administrators, bureaucrats, compliance officers, enforcement agents, oversight inspectors, and rule and regulation writers would be gradually transitioned into the private sector. This very large reduction in force would save taxpayers billions in wasteful, illegal federal spending. By following the Medicaid law as written, DOGE can rein in an out-of-control federal bureaucracy. The 47th President can use Section 1801 to drain the Medicaid portion of the swamp.  Originally interviewed at KTRH News.
One of the big items during the Trump whirlwind campaign, was the president-elect's promise to lower prices, and ease inflation. But can we really expect it to happen? And how long will it take? "I think you will start to see many more of the things that you buy on a daily basis, at least start to stabilize" said Texas based economist, Dr. Vance Ginn, "And that will help out many Americans across the economy." But how long will it be before we actually see results? "I don't think it will happen overnight" Ginn told KTRH, "But I would guess that within a couple of months you would start to see some changes within the cost of living across the country." If you remember, the economy and inflation were at some of the lowest levels in our nation's history during Trump's first term, a term that Dr. Ginn served in the White House's Office of Management and Budget (OMB). "When the Trump administration starts on January 20th, in the first 100 days there's going to be a lot of cuts in regulations and other things that will reduce the cost of doing business, and then that will also help to reduce prices across the economy" noted Ginn. Wasteful government spending will also be a key cut. In the meantime, 61% of Americans now say they are living paycheck to paycheck. In episode 77 of This Week's Economy, I break down the flawed economic promises of presidential candidates who ignore that nothing is truly free. From proposed AI regulations and fracking policies to tax plans and protectionism, I explore the impact these issues have on innovation, energy independence, and economic growth while highlighting why free-market solutions are key to prosperity. Get the show notes and more information at vanceginn.substack.com.
Check out episode 76 of This Week's Economy. I discuss whether the Fed will cut interest rates, the anti-growth message by Harris-Walz, problems with tariffs by Trump-Vance, support by RFK, Jr. of Trump, school choice in Texas, and a boom in cities in red states, and much more. Get the show notes at vanceginn.substack.com.
Don’t miss episode 75 of This Week's Economy. I discuss price controls and handouts to Americans being pushed by Harris and, in some ways, Trump, free-market energy policies in states, whether Google should be broken up, the economy being a top election issue, income tax elimination in Louisiana, and a state-level jobs report after Hurricane Beryl.
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Vance Ginn, Ph.D.
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