Blue states are more expensive for a reason

Wages, services, health outcomes, and opportunity tell the real story behind the cost of living debate.

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Republicans are trying out a new line on the economy, and it is one of the more confused arguments we have heard in recent memory. A couple of weeks ago, Fox News favorite and Treasury Secretary Scott Bessent declared that inflation is lower in red states than in blue states by half a percentage point. His proposed solution for struggling Americans was simple: if you want to beat high prices, move from a blue state to a red one.

We ran the math when he first said it and the conclusion bordered on parody. For a savings of roughly $25 a month, Bessent suggested uprooting your family, leaving behind higher wages, better schools, and superior health care, and moving to a state that statistically offers fewer jobs and worse outcomes on nearly every metric that defines a functional society. That was the argument.

Bessent is now back, doubling down in an interview with Andrew Ross Sorkin. This time he framed the issue as an affordability crisis that exists primarily in blue states. The conclusion he wants you to draw is that Republican states are the fiscally responsible havens where life is cheaper and therefore better. The problem is that he is missing the entire forest while obsessing over a single leaf.

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The Part Conservatives Pretend Not to Understand

Republicans love to lecture the country about supply and demand. Ask a conservative why a Rolex costs more than a Timex or why a Mercedes costs more than a Kia and you will get a lecture about scarcity, quality, and willingness to pay. Markets determine prices. You know the drill.

Then, for reasons no economist has ever been able to explain, that logic mysteriously disappears when the topic shifts to blue states.

Yes, the cost of living is higher in states like Massachusetts, California, Connecticut, New York, and Washington. That part is true. But the reason is not mysterious. People in those states make far more money and are willing to pay for the benefits that come with that. Those benefits include:

• significantly higher wages

• better public schools

• more stable labor protections

• better health outcomes and more available health care

• more extensive public transit

• richer culture and amenities

• higher life expectancy

• more innovation and knowledge-based jobs

• broader access to high-speed internet

• real social safety nets

You do not get those things for free. They cost money. People happily pay that money because the opportunity is worth something. That is literally how markets work.

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The Demand Republicans Cannot Explain Away

If blue states are so unaffordable, why is demand to live in them so consistently strong?

The answer is the one Bessent refuses to acknowledge. These economies produce more jobs, more income, and more upward mobility. Wages rise because the value of labor is higher. That creates a willingness to pay more for housing and other costs. The price rise is a symptom of success, not failure.

The alternative is a low-wage state with cheaper rent and fewer opportunities. You can absolutely move there. What you cannot do is pretend that a lower monthly grocery bill outweighs decades of lower salary, less economic dynamism, and a weaker safety net.

If Republicans believed their own rhetoric, they would applaud high cost states as perfect examples of market driven demand. Instead they insist on treating prices as isolated facts, separate from the very forces they claim to worship.

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The Caveats Democrats Must Own

None of this is an argument that blue states are perfect. Inequality exists within them and some rural areas are struggling. Affordability is a real issue in major cities. Short term inflation looks different from long term cost of living, and conservatives often blend the two together as if they are the same thing. They are not.

However, these complexities do not erase the central point. A state that costs more because it offers more economic opportunity is still a net positive for the people who live there. Pretending otherwise is not analysis. It is ideology dressed up as math.

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A Final Thought

When Republicans celebrate market forces, they demand applause for high prices as proof of value. When those same forces play out in blue state economies, they fall silent or claim something sinister is at work.

Scott Bessent is either unwilling or unable to follow his own logic to its obvious conclusion. Blue states cost more because they offer more. People move there because the wages, services, culture, and stability are worth the price.

That is a market functioning exactly as advertised.

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