Moore: Want lower prices? Move to a red state
The recent election results from New York, New Jersey, and Virginia have spotlighted the growing concern among voters regarding “affordability,” a pressing issue that both parties are keen to address. As prices for everyday essentials like groceries, healthcare, and rent continue to rise, many Americans are feeling the financial pinch. For instance, healthcare premiums are projected to increase by 10%-20% starting January, further exacerbating the affordability crisis. With voters expressing their frustrations over these rising costs, Democrats believe they can leverage this sentiment to regain support after a disappointing electoral performance last year.
However, the question of responsibility for these rising prices is complex. While former President Donald Trump had promised to lower costs, his administration’s tariffs have contributed to price hikes on certain goods, such as coffee and automobiles. Interestingly, the inflation rate has actually decreased since Trump left office, with an average inflation rate of 3% so far this year compared to 5% during President Joe Biden’s term. This raises the argument that much of the current inflation can be attributed to policies enacted under the Biden administration rather than Trump’s tenure. In fact, historical data indicates that states governed by Democrats tend to experience higher inflation rates and cost of living, with nine of the ten most expensive states being blue or purple, while all ten of the lowest-cost states are led by Republican governors.
The disparity in living costs can be traced back to the economic policies favored by Democratic leadership. States with liberal policies often impose higher taxes and stringent regulations, which can lead to increased prices for consumers. For example, blue states are more likely to enforce higher minimum wage laws and invest in costly renewable energy initiatives, which can drive up energy bills. In stark contrast, states like Texas and Utah, which prioritize affordable energy solutions, enjoy lower utility costs. This trend highlights a paradox where progressive policies, designed to enhance social welfare, inadvertently contribute to the financial strain felt by many Americans. As voters continue to grapple with these economic challenges, the debate over affordability and its underlying causes remains a pivotal issue for the upcoming elections.
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The buzzword of the month is “affordability,” and based on the election results from New York, New Jersey and Virginia, voters think that’s declining. Democrats think they’ve found a winning issue here to win back the hearts and minds of voters after the Trump sweep last year.
It’s true that people are angry about prices. Steaks and hamburgers are more expensive than ever. So are coffee and rents and medical care. Many Americans are about to see a 10%-20% increases in their health care premiums starting in January.
But who’s to blame? President Donald Trump said he would bring prices down; that hasn’t happened. His tariffs have nudged up prices on certain products like coffee and cars. But since Trump came into office in January, the inflation rate has fallen. If we go back to the start of COVID-19, we find that much of the rise in prices of everything you buy is because of Biden inflation, not Trump inflation. The average inflation rate in Trump’s first term was 2%. In former President Joe Biden’s four-year term, it was 5%, and under Trump so far this year, it’s 3%.
It’s ironic that Democrats have picked up on the affordability theme, because we know that in states where Democrats rule, inflation tends to spiral out of control. In terms of cost of living, blue states are lots more expensive, and red states are more affordable.
The U.S. News & World Report ratings show nine of the 10 most expensive states are either blue or purple states. New Hampshire is the one outlier. Meanwhile, all 10 of the lowest-cost states are run by Republicans.
Some of the states with the lowest cost of living are the poorest and most rural states, such as Mississippi and Arkansas. And the richest states, such as Massachusetts and California, are among the highest-cost states.
Five Lowest-Cost States:
— Arkansas
— South Dakota
— Mississippi
— Oklahoma
— Louisiana
Five Highest-Cost States:
— California
— New York
— Massachusetts
— Illinois
— New Jersey
But blue states tend to have higher costs not just because they are richer.
It’s because liberal policies raise costs. Blue states have higher taxes, and some of those costs get passed on to consumers.
Blue states are more likely to have high minimum wage requirements, higher energy costs due to expensive “green” renewable energy mandates, stricter forced union policies and high-cost regulations that restrict new housing, which raises the cost of buying a home in these areas.
Electricity costs are on average twice as high in states like California, Connecticut, Rhode Island and Washington because of their climate change policies that restrict cheap energy that is commonplace in states like Texas and Utah.
These are just a few examples of how Democratic politicians make products more, not less, expensive. It turns out the panoply of progressive “feel-good” policies are what make consumers feel angry and financially stressed out.
Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity
