Economist Vance Ginn Joins the Show
Main Discussion Topics
OECD Economic Projections vs. Reality
Third quarter GDP growth came in at 4.3%, nearly double OECD forecasts
OECD had predicted slower growth based on tariffs and protectionism concerns
Investment growth was only 0.2% in third quarter, raising concerns about future supply
Vance explained the mixed signals: "Growth was faster than many forecasts, but at the same time, there are weaknesses that are out there given the amount of protectionism and other sort of factors in the economy."
Economic Uncertainty and Job Growth
Job growth essentially flat after Liberation Day tariffs began in April
Businesses uncertain about supply chains due to tariff policies
Economic uncertainty slowing investment and job creation
Vance described the business environment: "What I've been seeing here a lot this year is the amount of economic uncertainty, especially when I talk to a lot of businesses, given they don't know what their supply chains are gonna be with all the tariffs and other things that are going on."
Federal Reserve Manipulation Concerns
Fed lowered interest rates three times in 2025, down to 3.5%
Trump seeking Fed chair who will push interest rates even lower
Fed ended quantitative tightening and returned to quantitative easing
Current inflation at 3%, well above the Fed's 2% target
Vance warned about Trump's Fed plans: "Having this increase in the balance sheet... along with a lower interest rate sort of push, is going to lead to higher inflation, not lower inflation. And it's a major concern that I have."
On Trump's likely Fed nominee: "My guess is that somebody that Trump will nominate for Chair of the Fed will be someone who would want lower interest rates... I'm hopeful that the Senate will push back on that and maybe even vote him down if they need to."
Federal Reserve Balance Sheet Analysis
Fed balance sheet was $800 billion (6% of GDP) in 2008
Expanded to $4 trillion during financial crisis
Ballooned to $9 trillion during COVID
Currently at $6.5 trillion with $2 trillion in mortgage-backed securities
Vance explained the implications: "Starting last month, the Fed decided to end quantitative tightening, a reduction in the balance sheet, and move back to quantitative easing, to increasing the balance sheet."
Housing Market Intervention
Trump planning to use $200-250 billion from Fannie Mae and Freddie Mac excess cash
Money would be directed toward buying mortgage-backed securities to lower rates
Plan represents industrial policy and government planning approach
Vance called it a terrible move: "This is just another way of government planning... We might get a boost in one time housing affordability, if you will, making it a little bit cheaper, but longer term, those interest rates are gonna be much higher. People are gonna be buying homes that they otherwise can't afford. And we're gonna be putting ourselves in a situation like we did during the two thousands."
Austrian Economics and the Structure of Production
Discussion of how interest rate manipulation distorts production structure
Boom-bust cycles created by government intervention in markets
Housing market specifically vulnerable to these distortions
Vance explained the Austrian perspective: "When you manipulate one part of that production process, it then filters through and kind of a trickle down throughout the rest of the production process and makes the prices and the signals that are out there all distorted and makes the situation worse."
Michael referenced Austrian theory: "The Austrian theory of the trade cycle... talks about how if you push down interest rates, it alters the structure of production in a way that's not dictated by the supply and demand in the market or by the time preference in the market."
Free Banking Alternative
Vance advocates for free banking system like mid-19th century America
Private banks would issue their own currency and compete
Would eliminate Federal Reserve's boom-bust cycle creation
Current system creates perverse incentives through FDIC insurance and bailouts
Vance explained his preference: "What I would like to see is banks across private banks across the country issuing their own currency, and then they can compete with those exchange rates across the country... It really starts to incentivize people who have money in their banks to care about what their banks are doing with their money."
Federal Reserve's Historical Origins
Created in 1913 along with income tax under Woodrow Wilson
Originated from 1907 banking panic and Aldridge Commission
JP Morgan and banking interests involved in creation
Intended as lender of last resort but became lender of first resort
Vance noted the timing: "In 1913 we had the Federal Reserve Act and we put in place the income tax. So it was a situation to where we were adding in a terrible income tax and we were gonna monetize it, find a way to cover other bases at the same year."
Inflation vs. Deflation Debate
Politicians and economists fear deflation based on Great Depression
19th century had periods of deflation with economic expansion
Deflation from productivity increases is beneficial
Great Depression deflation resulted from government policy, not free markets
Vance challenged conventional thinking: "During the 19th century, so the 1800s, there were periods of deflation and the economy continued to expand... I think that part of a strong economy, one that's unhampered, if you will, by government intervention, what you would see is inflationary periods and deflationary periods."
Trade Theory and Win-Win Exchange
Discussion of Adam Smith's absolute advantage (1776)
David Ricardo's comparative advantage in 1800s
Period of free trade support through 20th century including NAFTA
Trump popularized zero-sum trade perspective
Vance explained the shift: "Trump I think popularized this even more was to say, no, it's not a win-win. It's a win-lose situation and we are gonna be winning, right? If quote unquote we're winning and other people are losing."
AI Revolution and Government Response
AI represents extraordinary advancement in productivity
Some workers will be displaced but new jobs will emerge
Trump administration relatively good on AI compared to states
California heavily regulating AI industry
Vance praised AI potential: "I think this AI revolution is extraordinary. And it's gonna continue to propel us to more prosperity into the future... Just like when the horse and buggy was going out of business, when the T model car was coming into place... a lot of people who are working horse and buggys started working in the auto sector."
California AI Exodus
California's share of US tech jobs falling from 19% pre-2020 to 16%
High taxes and regulations driving AI companies to Texas, Florida, Tennessee
Austin now called "Silicon Valley of the South"
Vance supports federal moratorium on state AI regulation
Vance explained the relative decline: "Yes, those places like San Francisco continue to grow in their job creation, but not the same pace that other states are, like Texas and Florida and Tennessee... That's shifting the extent of the market to other states compared to the Silicon Valley."
Healthcare System Myths
European socialized healthcare creates long wait times and lower quality
US healthcare problems stem from government intervention, not free markets
Third-party payer system (government and insurance) distorts market signals
Medicare, Medicaid, and employer-sponsored insurance remove price sensitivity
Mark shared his experience: "I was put in a room with 50 other sick people with an IV in me for seven and a half hours... In Canada, I was fortunate enough because I'm in productions, I pay cash. I just go to the front of the line and I get the stink eye from everybody else in the waiting room."
Vance broke down US healthcare costs: "We spend $5 trillion a year on healthcare, right? And two and a half trillion is what we find in our work does not go to care. It goes to bureaucracy, it goes to waste, it goes to private health insurance, it goes to everything else except for care. We could cut that cost in half."
Pharmaceutical Price Controls
Trump's RX and most favored nation rule would reduce drug prices
Research shows 50% price reduction leads to 30% cut in R&D
Average drug now costs $2 billion and takes 5-7 years to bring to market
Price controls will reduce development of life-saving medications
Vance warned about consequences: "If you have a 50% reduction in the price, which sounds good, I think we'd all love that, it reduces R&D by up to 30%. Meaning that you're gonna have fewer drugs that are gonna cure cancer, fewer drugs that are gonna do something else that's gonna help someone else over time because you're trying to manipulate the prices."
New York Democratic Socialism
Mandani implementing rent controls and billionaire taxes
Policies will drive wealth and businesses out of New York
Financial center could relocate to Florida, Texas, or elsewhere
Provides institutional experiment comparing policy approaches
Vance saw opportunity in the contrast: "I think this is a great opportunity for us to highlight the differences between different types of policies... This gives us some institutional experiments, and I think it's gonna be a travesty for the people of New York City."
Texas Stock Exchange
Texas opened new stock exchange in Dallas
Designed to attract companies leaving New York
Part of broader migration from high-tax, high-regulation states
Economic Literacy and Trade-Offs
Thomas Sowell principle: "There are no solutions, only trade-offs"
People focus on surface-level effects while ignoring opportunity costs
Need better economic education about voluntary exchange
Mutual benefit through trade both domestic and international
Vance emphasized the core issue: "People look at what's on the surface level and they'll say, okay, that's good. These tariffs are good... And I think that could be a good thing overall, but you have to look at what the trade-offs are. What are the opportunity costs? What are we gonna give up?"
Book Recommendations
"Empower Patients" by Vance Ginn and Dr. Dean Waldman
Available on Amazon and vanceginn.com
Addresses government intervention in healthcare
Proposes patient-centered free market reforms
Referenced Media/Resources
Vance Ginn's Let People Prosper podcast
Vance's newsletter at vanceginn.substack.com
Article: "Econ 101: A Compass for a Lost Country"
Paper on biopharmaceuticals and price controls (Americans for Tax Reform)
Milton Friedman's "Monetary History of the United States"
Murray Rothbard's history of money and banking
Mark Perry's "chart of the century" from American Enterprise Institute
Notable Quotes
Vance on Economic Growth Outlook: "What I'm hoping is in 2026 that we're in now is that there will be a couple things. One is I hope they can get their fiscal house in order at the federal level. That will help to reduce the uncertainty in the economy when you think about the excessive spending and deficits, but also the trade protectionism and the tariffs and the on again, off again sort of situation the Trump administration has put us in over the last year. If that goes away, then I think we'll see a lot more economic growth."
Vance on Trump's Economic Direction: "I worked in the first Trump administration and talk to some of those folks still. It's just they're heading much more into an industrial policy, government planning sort of direction that is not good for the housing market and not good for Americans."
Mark on Housing Solutions: "What they should do is deregulate the housing industry and let prices and interest rates reflect the capital and the supply and demand ratios... We would see more housing... It might be more expensive for a while because the prices would reflect supply relative to demand, but those prices would fall precipitously as entrepreneurs came in and started building."
Vance on Free Banking: "The Federal Reserve, look, I mean, they were created to be a lender of last resort, and instead they had become a lender of first resort multiple times and distorted our economy and created much more of the boom and bust cycles. You could still have a boom and bust cycle without a central bank, but it won't be as severe, and it won't be as long because prices and behaviors in markets will better respond."
Vance on Healthcare Reality: "In Europe, nationalized healthcare and all that, the problem is that nothing is free and so you're going to pay for it, and you pay for it through lower quality and longer waiting lines... Our problem in healthcare is not that it's quote unquote free market, is that it's government, it's dominated by third-party payers."
Mark on Economic Understanding: "It's guys like Ginn who are going to keep you from being exploited by the political class. If you read his stuff, you will no longer be fooled by the demagogues."
Key Themes
Economic uncertainty from Trump's trade policies undermining growth
Federal Reserve manipulation creating boom-bust cycles and inflation
Government intervention distorting healthcare, housing, and pharmaceutical markets
Austrian economics explaining structure of production distortions
Free banking as superior alternative to central banking
AI revolution threatened by state-level overregulation
Democratic socialism's institutional failure on display in New York
Trade-offs and opportunity costs ignored in policy debates
Voluntary exchange and free markets as path to prosperity
Capitalist Thought of the Day
"What we've been talking about here, folks, is liberty. Human liberty works whether you like it or not, whether you're afraid of it or not. It works. Yes, it makes your future a little bit uncertain, but it gives you complete moral agency to realize your potential. That is where human dignity lies, in your ability to choose for yourself how your life is going to go. We think we represent that by promoting a system that respects individual rights. No other party in this country does that, and the right to your own property. That is what the Capitalist Party stands for. That's what capitalism is. It is an economic and political and moral system of complete and total choice across all human action." - Mark