Moore: Want lower prices? Move to a red state
In the wake of recent elections in New York, New Jersey, and Virginia, the term “affordability” has emerged as a pivotal issue, capturing the attention of voters who are increasingly concerned about rising costs in their everyday lives. Many Americans are feeling the pinch as the prices of essential goods and services—ranging from groceries like steaks and hamburgers to healthcare premiums—are set to soar by 10% to 20% in January. This growing frustration over affordability is a sentiment that Democrats are keen to harness as they seek to regain voter trust following a challenging electoral landscape in the past year.
However, the question of who is responsible for the current state of rising prices is a contentious one. While former President Donald Trump promised to lower prices, his administration’s tariffs have contributed to increased costs for certain items, including coffee and automobiles. Interestingly, inflation rates have fluctuated under both Trump and President Joe Biden, with the average inflation during Trump’s term resting at 2% compared to 5% during Biden’s tenure. The irony lies in the fact that Democrats, who often govern in states with higher living costs, are now rallying around the affordability theme. According to U.S. News & World Report, nine of the ten most expensive states are governed by Democrats, with high taxes and stringent regulations often blamed for driving up costs. In stark contrast, states with lower living expenses tend to be Republican-led, highlighting a significant divide in economic policy and its impact on residents.
The complexities of affordability extend beyond mere statistics, as the policies enacted by blue states often lead to higher consumer costs. For instance, states like California and New York not only feature higher taxes but also implement stringent regulations that can inflate prices for housing and energy. The push for renewable energy in these states results in electricity costs that are, on average, double those in more conservative states like Texas and Utah. This correlation between liberal policies and increased living expenses suggests that the very initiatives designed to promote social welfare may inadvertently contribute to the financial strain felt by consumers. As the political landscape continues to evolve, the affordability issue is likely to remain at the forefront, shaping voter sentiments and influencing future electoral outcomes.
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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
