4. Nothing Is Free

Costs of lockdowns and poor policies soar.

Hello Friends!

Thank you for reading this latest edition of my Let People Prosper newsletter. Given this is the third entry of the new newsletter, I’d like to again welcome many new subscribers. Thank you!

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Are you ready? That reminds me of one of the songs from my favorite band growing up, Korn. Did I mention that I’m a drummer who played for a hard rock band for a few years in Houston? I probably haven’t yet. When you have time, check out my YouTube video where I tell my story of failures and how I got into economics to help people prosper that has supported much success over time.

OPEN TEXAS AND AMERICA

Latest on Texas Opening: For a more thorough overview of the COVID-19 situation and opening efforts in Texas, see my previous post: History Helps Humanity.

As of October 26, it seems that Governor Greg Abbott has changed his metric’s denominator to “total hospital capacity” defined as “the number of staffed available and occupied beds. This includes pediatric and adult hospital patients, general and ICU beds, inpatient and outpatient beds, emergency department beds, and telemetry and psychiatric beds.”

I’m not sure when the change was made but I noticed it today. The previous metric that I was using was to match his was COVID-19 hospitalizations as a share of total staffed inpatient beds but now it is as a share of total hospital capacity (63,515), which the capacity is slightly higher than staffed inpatient beds (59,470) across the state. This may be a better metric as Governor Abbott sends additional resources to areas with higher hospitalization rates (El Paso, Amarillo, and Lubbock so far, which are all now on the list with further restrictions).

Here's my Twitter thread (please retweet) on this latest news about the COVID-19 situation in Texas.

Vance Ginn @VanceGinn

1/2: #Texas #COVID19 Situation NEW: Metric for Gov Abbott is now COVID-19 hospitalizations/total hospital capacity (inpatient & outpatient staffed beds) TSAs A, B, I are now >15% for 7 straight days, so 94% of Texans at 75% capacity. dshs.texas.gov/ga3031/ #txlege

Governor Abbott Metric Overview: Per his metric of CV19 hospitalizations/total hospital capacity for seven consecutive days, TSAs below 15% can have most businesses expand to 75% capacity, keep state mask mandate, and bars (and others) open to 50% capacity with the approval of the county’s judge. TSA A (Amarillo), TSA B (Lubbock), and I (El Paso) are reported on the list of further restrictions, so 94% of Texans are at 75% capacity + other restrictions.

• TSA I (El Paso)>15% for 15 straight days & trending up to highest since COVID

• TSA A (Amarillo)>15% for 9 straight days & trending up to highest since COVID

• TSA B (Lubbock) > 15% for 8 straight days and trending up to highest since COVID

• TSA T (Laredo) is next highest at 12.5% but leveling off

• Statewide is trending up to 8.3%, highest since 8/24 but well below the 13.9% average for July to August

Alternative Metric Overview: Per the alternative metric of the 14-day moving average of CV19 hospitalizations/total hospital capacity determined each Friday, 13 TSAs would be above 7% so they could be at 75% capacity, while the other 9 TSAs with 47% of Texans would be 100% free (100% capacity, no mask mandate, bars open).

• TSAs A, B, and I continue to trend up

• TSA S (Victoria) fell below 7% and moved off the more restricted list

• TSA H (Lufkin) and TSA S (Victoria) are trending down and could fall below 7% soon

• Statewide is trending up to 7.1%, highest since 9/9 but remains below the 14.7% average for July-August

Hospital Data Statewide:

• Available beds as a share of staffed inpatient beds up to 22.8%, highest since 10/6

• COVID-19 hospitalizations up 22.2% (to 5,278) over last 7 days, up 36.4% over last 14 days

• Available beds up 2.1% (to 13,570) over last 7 days, up .4% over last 14 days

• Staffed inpatient beds up 1.7% (to 59,470), down 1.0% over last 14 days

• With available beds as a share of staffed inpatient beds rising while COVID-19 hospitalizations are rising, this indicates there are fewer hospitalizations due to other causes (something to watch)

Also, something interesting to consider about lockdowns and the economic situation across the states:

Vance Ginn @VanceGinn

Stark divide among labor market outcomes when comparing unemployment rates in #Democrat-run states & #Republican-run states. #Texas is an exception to list now with relatively high rate from more #Covid_19 restrictions. #txlege @Comm4Prosperity @TPPF @kerpen #letpeopleprosper https://t.co/ayi07NzYOB

Real Time Economics @WSJecon

The Covid economy has carved a deep divide between the haves and have-nots. Lower-wage workers with fewer credentials, old-line businesses and regions tied to tourism and public gatherings can expect to bear years-long scars from the crisis. https://t.co/imQqsuhzwO https://t.co/x4B8lu5VgE

TEXAS ECONOMIC AND FISCAL SITUATION

It’s important to discuss what happened during last week’s presidential debate. I would have liked to hear more about how each candidate would deal with the fiscal insanity of running massive deficits from excessive government spending. We need a Responsible American Budget, which I’ll be writing more about soon. With regards to Texas, I think the key thing that was mentioned was when VP Joe Biden said that he is in favor of transitioning from oil and gas. This made the rounds on social media as the Texas Comptroller Glen Hegar tweeted an important about how this would hurt the Texas economy, influence the state budget that funds education, and more:

Vance Ginn @VanceGinn

Good insights in this thread by @Glenn_Hegar @txcomptroller on what @JoeBiden’s fracking ban proposal would mean for #Texas. It would be a huge economic cost. #txlege @GregAbbott_TX @DanPatrick @KevinRobertsTX @KHancock4TX @RepMattSchaefer @TeamBettencourt @Burrows4TX @kseliger

Glenn Hegar @Glenn_Hegar

I'm regularly asked by legislators and citizens what a fracking ban would mean for Texas. In light of comments made by the former Vice President, I'd like to share some sobering statistics. 1/

Part of the path advocated by progressives to transition away from oil and gas and to renewable sources of energy is to enact a new carbon tax, which they’ve cleverly changed to a “carbon price” because a carbon tax polls poorly. Check out my thread where I take this view to school on how it would be destructive for the economy as it distorts economic activity and socially engineers society while doing little to improve the environment.

Vance Ginn @VanceGinn

Thread 1/n: 2016 piece in @FDRLST that applies to the talk about @JoeBiden’s comment to transition away from the oil & gas industry. While #Texas isn’t as dependent on this sector as in the past, we’re not immune either economically or fiscally. #txlege

thefederalist.comThe Texas Miracle Isn’t All About OilGiven that oil prices remain less than half of what they were at their peak, all those arguing that the Texas model will fail are just wrong.

Here’s another good tweet in that thread.

Vance Ginn @VanceGinn

5/ ICYMI: The costs of carbon taxes are real — and crippling thehill.com/opinion/energy… #txlege @Life_Powered_ @TPPF

thehill.comThe costs of carbon taxes are real — and cripplingThe proclaimed benefits of a carbon tax are not proven, yet the negative economic effects of such a carbon tax are clear.

Ultimately, transitioning away from oil and gas, which natural gas use has been contributing to an improvement in the environment for years and harmful pollutants continue to decline (see figure below from EPA), would be devastating to Texas and America.

Regarding the fiscal situation in Texas, check these out:

Vance Ginn @VanceGinn

Great to see the first #LBB report of new strategic fiscal reviews of agencies. This was improved greatly with #SB68 by @SenJaneNelson & @RepMattSchaefer in the last session. This approach can help to pass a Conservative Texas Budget. lbb.state.tx.us/Documents/Budg… #txlege @TPPF

Vance Ginn @VanceGinn

ICYMI: Check out my conversation with @JBonKTRH @ktrhnews at time 29:00 on the costs of raising property taxes in #Houston by @SylvesterTurner and the City Council, especially when their unemployment rate is 9.6%. facebook.com/watch/?v=37224… @Burrows4TX @TeamBettencourt @TPPF

facebook.comThe Jimmy Barrett Show on Facebook WatchAnother HPD Officer has died in the line of duty. 3:18 p.m. A Lincoln Biography that compares the election of 1860 to 2020. 3:32 p.m. Is Houston and...

Vance Ginn @VanceGinn

ICYMI: Here's @TPPF's 2022-23 Conservative #Texas Budget that sets a maximum threshold for initial appropriations by the #txlege in the 2021 session. Given families are struggling with an 8.3% unemployment rate & possible deficit, likely need cuts. More: texaspolicy.com/2022-23-conser…

U.S. ECONOMIC AND FISCAL SITUATION

I would like to highlight how the U.S. needs to return to the inclusive institutional framework that supported economic prosperity until the COVID-19- induced recession. Without getting political about it, I think it is important to look at the evidence of the last three years, excluding the unprecedented situation, which is full of government failures. Here are a few tweets and threads that tell the story.

Vance Ginn @VanceGinn

1/n It doesn't get much attention because of the #COVID19-induced recession, but @realDonaldTrump's TCJA & dereg efforts have estimated gains of $6K in real household income, helping families especially during this tough time. @WhiteHouse @WhiteHouseCEA @caseybmulligan @TPPF

Vance Ginn @VanceGinn

7/7 In addition to this thread on the benefits of pro-growth policies, check out this other thread for a comparison between the #TrumpPence2020 economic plan and the #BidenHarris2020 plan. @TPPF #Congress #txlege #Election2020

Vance Ginn @VanceGinn

1/: This JMI paper provides analysis on the #TrumpPence2020 & #BidenHarris2020 proposals. I may quibble with some calculations & direction of policy effects, but it provides valuable insights into how the Trump plan outperforms Biden's. #Election2020 https://t.co/qeGqW20WOs https://t.co/ZyzbXoWogq

Vance Ginn @VanceGinn

“Yet the real takeaway from this Stanford study is not about any one candidate, policy, or party. It’s another reminder that free markets and economic liberty drive prosperity—but heavy-handed govt interventions hurt more than they help,” @brad_polumbo.

fee.orgNew Stanford Study Suggests Biden’s Agenda Will Have 4 Devastating Economic Consequences | Brad PolumboThe real takeaway from the Stanford study has nothing to do with a candidate or political party. It’s another reminder that free markets and economic liberty drive prosperity, while heavy-handed government interventions drag progress down.

Vance Ginn @VanceGinn

This is a massive increase in taxes by @JoeBiden however you measure it. Although this might not be the highest share of GDP since 1934, increased barriers from higher taxes & from higher govt spending as % of GDP will grow deficits. Must consider both sides of fiscal equation.

Tax Foundation @TaxFoundation

Biden’s tax plan would be the 5th largest tax increase since the 1940s and one of the largest tax increases not associated with wartime funding: https://t.co/u0ELaCIbwW #Election2020 https://t.co/X2w46wfgGh

One way to not return to the stronger institutional framework with pro-growth policies supporting prosperity is to raise the federal (or any) minimum wage as noted here:

Vance Ginn @VanceGinn

The Real Cost of Doubling the Minimum Wage

economics21.orgThe Real Cost of Doubling the Minimum Wage

And I’ll leave you with some optimistic news, given I’m an optimist at heart:

Vance Ginn @VanceGinn

U.S. economic growth in Q3 will be released on Thursday (10/29). It will likely show an annualized growth rate of at least 30%. Of course, this is after a 5% drop in Q1 and a 31.4% drop in Q2. That's a lot of contraction to recover, but it's a start. frbatlanta.org/cqer/research/…

I hope that this information provides insights that reveal how nothing is free. Most of you have heard me say this often as there are always tradeoffs in a world of scarcity, whether those costs are explicit or implicit, such as opportunity costs.

If you have any information that I should see, please send my way. Contact me at any time. Also, let me know if you’d like me to take you off this list. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.

Have a blessed week.

Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper