“This will not end well,” Sen. Rand Paul (R-Ky.) warned Tuesday, explaining how Texas Democrat Governor-Elect Gina Hinojosa’s plan to unilaterally freeze electricity prices employs the socialist tactics that drove Venezuela into ruin.
Many Democrats scored victories in November’s midterm elections by promising “affordability,” without providing specifics about how they planned to achieve that end.
Hinojosa, on the other hand, has made her plan clear: simply decree affordability.
During her campaign for governor, the Democrat spelled out what she planned to do to address the high cost of electricity:
“On Day One as governor, I’ll freeze residential electricity rates and make corporations finally pay their fair share.”
“Nothing like your first act being out of the Venezuelan socialist playbook . . . This will not end well,” Sen. Paul cautioned in the first of a series of X.com posts Tuesday, linking to a Fox News article noting that Hinojosa has doubled down on her plan in recent interviews.
“Don’t let the Left tell you their agenda isn’t socialism. This sounds like Venezuela,” Sen. Paul followed up, again referencing the Fox News piece titled, “Texas governor-elect's plan to freeze electricity prices raises questions over legal authority.”
“The governor-elect says she will use emergency powers to lock residential electricity rates amid an affordability crisis,” Fox News explains.
In his next post, Sen. Paul quotes from an Economics Observatory article titled “Why did Venezuela’s economy collapse?”:
“Venezuelan ‘electricity subsidies were also vast, leading to losses and underinvestment in the sector.’ Texas are you prepared (for) Venezuelan socialism?”
“The country’s economy collapsed under a single government during peacetime,” Economics Observatory explains, stressing the devastating impact socialist policies had on Venezuela:
“Living standards in oil-rich Venezuela plummeted by a staggering 74% between 2013 and 2023. This is the fifth largest fall in living standards in modern economic history.”
Government price-fixing in Venezuela produce a number of harms, Sen. Paul continued:
“The Venezuela ‘government set prices for thousands of retail goods by decree: from rice and chicken to soap and toilet paper. Price caps were often too low, so producers could not cover their costs, leading to shortages, smuggling and bankruptcies.’”
Under its current free-market system, Texas has a highly-competitive energy sector, in which citizens can choose from more than 100 retail energy providers competing for their business.
Electric companies serving Texas are expected to challenge the incoming governor’s fiat in court.
