Rand Paul's Message to Texas: Don't Use the 'Venezuelan Socialist Playbook'

"Nothing like your first act being out of the Venezuelan socialist playbook," Sen. Rand Paul (R-Ky.) mocked Texas Gov.-elect Gina Hinojosa Tuesday morning. The well-deserved mockery was in response to Hinojosa's Day One promise to impose price controls on Texas energy producers.

She really said that. Twice.

"On Day One as governor," Texas Power Cost quoted Hinojosa saying during the campaign, "I’ll freeze residential electricity rates and make corporations finally pay their fair share." And that wasn't the only time she made such a promise. Over at Fox News this morning, Leo Briceno found this Hinojosa pledge from a pre-election interview with the Texas Tribune: "Within an hour of taking the oath of office, I will declare a high-cost emergency in the state of Texas and issue an emergency executive order to... freeze electricity rates."

Folks, I probably don't have to tell you that's the same moment Texas energy producers will freeze electricity generation — while power-hungry data center construction continues for the next two years. Hinojosa backed off her earlier pledge to cancel all construction, and will now allow — isn't that sweet of her? — the completion of previously approved projects.

Hinojosa also said she'd "direct the Public Utility Commission to freeze the rates residential customers pay until we have laws to ensure that data centers and other high-load users pay for themselves." First, good luck getting those laws — which are really about local issues — through the GOP-held state assembly. Second, if Hinojosa does impose price controls, they'll prove politically tricky to remove, even if ever-increasing demand hits the production wall.

Sen. Paul added in a follow-up post that "The Venezuelan 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."

In a year or two, we'll all pour one out for common sense and put on our shocked faces when data centers take the blame for rolling brownouts, or whatever totally unpredictable energy troubles unexpectedly land on Texans' doorsteps.

This is where I'll remind you once more that the only thing government produces in abundance is scarcity.

If there's any good news in this, aside from getting your USRDA of schadenfreude, it's that "in Texas' decentralized market, retail providers, not regulators, set electricity prices," as Reason's Tosin Akintola reported on Monday.

Instead of Texas imposing price controls on the free market, Hinojosa could learn from the mistakes of New Jersey Gov. Mikie Sherrill, a fellow Democrat who has failed to meaningfully lower electricity prices in her state despite signing an executive order that declared a state of emergency and froze rate hikes by the state's utilities.

Spoiler: It didn't work, and Sherrill eventually "signed off on a budget authorization that allocates $500 million to provide ratepayers short-term relief." In other words, Sherrill has taxpayers helping pay taxpayers' utility bills.

This is the path of absurdity Texas voters chose to take last week, following three decades of mostly competent if unexciting Republican governance.

But congratulations, Texas, for electing your first effectively Venezuelan-American governor. And as Sen. Paul concluded in his post to Hinojosa, "This will not end well."