When Good Intentions Become Bad Policy

Originally published on Substack. 

​Today’s work across multiple outlets wasn’t coordinated—but the conclusions were.

Whether the topic was Texas fiscal policy, entrepreneurship, credit markets, or healthcare, the same pattern emerged: policymakers keep substituting government intervention for market discipline, and the results are predictable—higher costs, fewer choices, and weaker outcomes.

This isn’t a messaging problem. It’s an incentives problem.

In the Houston Chronicle, I posed five basic questions to Texas Republicans about whether the state is still practicing limited government—or merely talking about it. After more than 20 years of one-party control, Texas state spending has grown far faster than population growth plus inflation, while property taxes remain among the most burdensome in the country. Limited government is not defined by slogans. It is revealed by budgets.

Meanwhile, Texas ranks 3rd best in the nation to start a business, according to national rankings discussed in my interview with News Radio 1200 WOAI. That success is not accidental. It reflects relatively low taxes, fewer regulatory barriers, and flexible labor markets—the institutional foundations of growth emphasized by mainline economists from Adam Smith to James Buchanan.

But those advantages are not guaranteed.

Rapid growth in state and local government spending directly feeds higher property tax burdens, raising fixed costs for households and small businesses. Economic freedom is not self-executing. When fiscal discipline weakens, growth slows—not always immediately, but inevitably.

National policy debates show the same misunderstanding of incentives.

In my Fox News column, I addressed President Trump’s, Senator Josh Hawley’s, and Senator Bernie Sanders’ push for credit card interest rate caps, a textbook case of price controls. Decades of evidence—from U.S. usury laws to modern international examples—show that artificial interest caps reduce credit supply, particularly for lower-income and higher-risk borrowers. When prices are capped below market risk, lenders ration credit. Access shrinks. Consumers are pushed toward worse financial options, not better ones.

Healthcare policy offers an even clearer warning.

In The Daily Signal, I criticized U.S. House Republicans for extending enhanced Obamacare subsidies for three years while leaving intact the Medicaid Intergovernmental Transfer loophole, which allows states like California to draw down excess federal funds through accounting maneuvers rather than improved care. The result is predictable: higher federal spending, distorted incentives, rising premiums, and limited access for patients—especially those on Medicaid.

Subsidies mask cost growth instead of disciplining it. Loopholes reward fiscal gamesmanship instead of outcomes. Markets would punish this behavior. Government financing schemes entrench it.

Across all four issues, the mistake is the same.

When policymakers distrust markets, they replace prices with politics. When they distrust individuals, they substitute choice with control. And when they override incentives, they get less of what they want and more of what they fear.

Closing Thoughts

Classical liberalism starts with a simple insight: people respond to incentives, and markets aggregate information better than governments ever can.

That insight still holds.

Prosperity does not come from price controls, subsidies, or centralized decision-making. It comes from liberty, competition, fiscal restraint, and trust in voluntary exchange. When policy ignores those principles, failure is not a surprise—it is the forecast.
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Review

• Texas growth reflects past market-oriented reforms, not more recent bigger government
• Excessive spending drives higher property taxes and erodes competitiveness
• Interest rate caps reduce credit access, especially for working families
• Healthcare subsidies and loopholes entrench inefficiency and higher costs
• Markets discipline bad policy faster than politics ever will