TWE 156: You Can’t Hide from the Data: Bad Policy Has Costs
From jobs to healthcare to trade, the warning signs are showing up across the economy.
Hello Friends,
The numbers are in—and it’s not telling a flattering story. Across the economy, the warning signs are piling up: a weakening labor market, rising healthcare costs, slowing growth, and increasing uncertainty. These aren’t disconnected trends or unfortunate timing. They are the predictable results of policy decisions made over the last several years.
In this episode of This Week’s Economy, we connect the dots too often ignored. Jobs, Medicare, regulation, trade, and state tax codes show the same pattern: when government expands its role, distorts incentives, or adds complexity, the costs show up in the data—and in people’s lives. The question isn’t whether we see the consequences. It’s about whether leaders are willing to change course before those consequences worsen.
Let’s explore in this full episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information about my work at Ginn Economic Consulting.
ECONOMIC HEALTH CHECK: Are We Back on Track After COVID?
In the News:
This month marks six years since the World Health Organization declared COVID-19 a global pandemic — and the economic consequences of government lockdowns are still with us. We can see the latest data in the latest jobs and GDP reports.
The February jobs report shows nonfarm payrolls fell by 92,000, the unemployment rate rose to 4.4%, and labor force participation declined to 62.0%, its lowest level since late 2021. The household survey paints an even weaker picture, with 185,000 fewer Americans working and 203,000 more unemployed. Meanwhile, the latest GDP report shows the U.S. economy grew at just a 0.7% annualized rate in Q4, down from 1.4% estimated a month earlier. For 2025, full-year growth came in at 2.1% — slower than any year under the Biden administration. Sources: Bureau of Labor Statistics and Bureau of Economic Analysis
What That Means For You:
Six Years Since Shutdown:
In 2020, U.S. GDP contracted 3.5%, more than 200,000 small businesses closed permanently, and the federal deficit hit $3.1 trillion. The lesson isn’t that we need more refined emergency powers — it’s that concentrated government control, even with good intentions, produces outcomes that free markets and voluntary cooperation would not.
Job Recession & Slow Economy:
Today, we see what poor policy looks like in the data. The GDP report reveals slower growth, persistent inflation, and increasing uncertainty. The February jobs report should be a wake-up call: the labor market is beginning to resemble a jobs recession. The industry employment chart shows job losses are spreading across key sectors tied to production and investment, while gains are concentrated in just a few areas.
Policy Plan for Economic Growth:
To restore strong, sustainable growth, policymakers should end tariffs, rein in federal spending to ease inflationary pressure, reduce regulatory burdens, and provide a stable policy environment so businesses can invest and hire with confidence.
Related Reading: For a deeper look at how COVID-era lockdowns reshaped the economy — and why those effects are still lingering — read my latest commentary.
FEDERAL POLICY: What to Expect for U.S. Trade and Tariffs
In the News:
Trade tensions are back in the spotlight. Last week, U.S. and Mexican officials started discussing the future of the USMCA, the trilateral pact underpinning North American trade. At the same time, U.S. and Chinese officials met in Paris to address ongoing disputes, including China’s rare-earth export controls.
Meanwhile, after the Supreme Court struck down President Trump’s recent tariffs, he has signaled he still has “the absolute right” to impose new ones — and is exploring ways to replace them. In response, Democratic attorneys general and governors from 24 states, along with a libertarian group representing small businesses, have filed legal challenges to block a proposed 10% tariff on most U.S. trading partners. Sources: Yahoo Finance, Wall Street Journal, and Politico
What That Means For You:
The Court Fixed the Power to Tax:
Tariffs are taxes. That’s what too many policymakers try to obscure with patriotic branding. In our system, broad-based taxes are supposed to go through Congress, not be created through executive action. The Supreme Court’s ruling reinforces that boundary, rejecting the idea that emergency powers can justify sweeping, global tariffs.
Free Trade, Not Trade Wars:
The U.S. should lead by expanding trade. That means pursuing agreements that lower barriers, strengthen alliances, and increase access to global markets. Open trade raises incomes, expands opportunity, and reinforces America’s leadership on the world stage. Tariffs do the opposite by raising costs, distorting markets, and inviting retaliation.
The Proper Role of Government:
Government does have a legitimate role in trade — but it’s not picking winners and losers. It’s about enforcing contracts, protecting property rights, and upholding the rule of law. When those foundations are strong, markets work — and countries can negotiate real free trade agreements that increase competition and prosperity. Trade deficits are not a scoreboard of winning and losing. The goal shouldn’t be shrinking deficits. It should be expanding freedom by making trade more open and less restricted.
Related Viewing: Catch my breakdown of the Supreme Court’s ruling on President Trump’s tariffs and what it means for future trade policy.
STATE POLICY: Why Some Will Rise Above the Pack
In the News:
Texas has outpaced the national economy for more than half a century. With a $2.7 trillion economy, it now ranks as the eighth largest in the world — larger than countries like Russia, Canada, and Italy. In 2025, it also led the nation in attracting new economic development projects.
Zoom out, and a clear divide is emerging. Since 2021, 23 states — mostly Republican-led — have cut or flattened their income taxes. Meanwhile, many Democratic-led states are moving in the opposite direction, raising taxes on top earners to address budget shortfalls and inequality. Sources: Houston Chronicle, MSN, and Wall Street Journal
What That Means For You:
Why Texas Keeps Winning:
Texas’ success isn’t an accident — it’s a model. With no personal income tax and a relatively lighter regulatory burden, it allows markets to work. People are moving in. Capital is flowing in. And businesses are expanding because the conditions for growth are there. When returns are possible, investment follows.
State Tax Code Competition:
A competitive tax code is neutral, simple, and predictable, encouraging investment and innovation rather than penalizing growth or distorting decisions. According to the Tax Foundation’s 2026 State Tax Competitiveness Index, the states with low, broad-based taxes are winning — while those with high rates and carveout-laden tax codes are falling behind. In short, the states that trust people to prosper are leading America’s economic race.
The Blueprint for Growth:
Top-performing states either avoid major taxes altogether or keep rates low and systems flat and broad-based. The worst-performing states rely on complexity, narrow tax bases, and high rates that drive people and capital away. These rankings show up in real time through migration, investment, and job creation. If states want to grow, the playbook isn’t complicated: limit spending, simplify taxes, and trust people — not politicians — with their money.
Related Reading: I break down what tax competition looks like and why it matters for states here.
HEALTH CARE: Medicare Advantage
In the News:
Medicare premiums just jumped again, and seniors are paying the price. Congressional investigators found that the average Medicare premium rose about 10% last year—more than $200 annually—driven in part by alleged overpayments to private Medicare Advantage plans.
At the same time, seniors unhappy with their coverage are up against a deadline: the Medicare Advantage open enrollment period closes March 31. And in Washington, a growing fight over overpayments is exposing a bigger question—how this program actually works, and who it’s really working for. Sources: Wall Street Journal, NPR, and Yahoo Finance
What That Means For You:
Who’s To Blame?
Medicare Advantage is failing because we’ve built a healthcare system around government formulas, insurer incentives, and bureaucracy—not patients and doctors. As long as healthcare is financed through federal formulas and third-party payment systems, politics will dominate medicine. Patients are sidelined. Doctors are buried in compliance. And insurers win by mastering the rules, not by improving outcomes.
How the Game Works:
The federal government pays Medicare Advantage plans a set amount per enrollee and adjusted for several factors. The more “complex” a patient looks on paper, the higher the payment.The system rewards upcoding—making patients appear sicker to increase payouts. And when those costs rise, seniors pay twice: once as taxpayers, and again through higher premiums.
You do not fix a structurally unsustainable program with another round of annual adjustments. You fix it by changing the incentives.
Empower Patients Model:
If we want better outcomes, we have to put patients in control of the money—starting by shifting the value of the employer insurance tax exclusion directly to workers. That means giving patients access to no-limit HSAs so they can save and spend on care without restrictions, and moving Medicaid toward state-driven flexibility instead of one-size-fits-all federal micromanagement. When patients control the money, the system ultimately has to compete for their business.
Related Reading: I break down further how Medicare Advantage reveals what’s broken in healthcare, and what it would take to fix it.
TECHNOLOGY: AI Shapes Banking
In the News:
Banks across the United States are pouring billions into artificial intelligence —using it to detect fraud, assess credit risk, automate compliance, and modernize operations. Large institutions are embedding AI deep into core financial services, transforming everything from risk management to customer experience. Source: Forbes
What That Means For You:
AI Can Level the Playing Field:
Artificial intelligence may be particularly important for smaller financial institutions, helping them compete with established incumbents. For years, community and regional banks have been squeezed by rising regulatory costs and growing complexity. Large institutions can absorb those costs across massive balance sheets, but smaller banks can’t. AI changes that equation. By automating compliance and improving efficiency, it lowers costs and reduces barriers — giving smaller players a real chance to compete.
The Real Risk is Overregulation:
Regulatory overreaction is a much bigger threat to financial markets than artificial intelligence. Financial services are already among the most heavily regulated sectors in the economy. Layering on sweeping, AI-specific rules risks repeating a familiar mistake: protecting incumbents under the guise of protecting consumers. Complex regulations favor the largest institutions that can afford to navigate them — while smaller banks and startups get pushed out.
AI Can Restore Competition:
Artificial intelligence alone will not solve deeper structural problems in the financial system. Decades of regulatory accumulation and monetary policy distortions have already reshaped the financial markets in ways that often reduce competition rather than expand it. AI offers an opportunity to restore some of that competition. But only if policymakers allow markets to work. See my guide: Correcting America’s Financial Future: Monetary Policy and Financial Regulation
Related Reading: See my new piece for a deeper look at how artificial intelligence could reshape banking.
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.
God bless you, and let people prosper!
