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Blue state affordability blues

Published September 10, 2026 6:00am ET



Left-wing politicians, including New York Mayor Zohran Mamdani and Senator Bernie Sanders (I-VT), often blame corporate greed for high prices.

The problem is that, on average, prices are 23% higher in blue states than in red states. Are corporations somehow greedier in blue states than red states? Seems unlikely. Yet, liberal politicians and increasingly some on the Right side of the aisle tell us that corporations, not onerous government policies, are to blame for high prices.

Nine of the 10 most expensive states in the MERIC cost-of-living index are controlled by Democrats, e.g., Democratic governors and Democratic-controlled legislatures. (Alaska is the only non-Democrat-controlled state in the top 10, but obvious logistical challenges drive up costs when your state is as distant as Alaska is from most producers.)

Meanwhile, Republicans control 15 out of the 17 least expensive states in the MERIC index (16 if you count Kansas, where the Republican legislature has a veto-proof majority over a Democratic governor).

In fact, this index actually understates the affordability differences between blue and red states, because it excludes most taxes, which are generally higher in blue states.

So why are blue states so much more expensive?

Hint: It has nothing to do with corporate greed. Companies are basically the same throughout the country. The difference is that companies in some parts of the country are forced to contend with more heavy-handed laws, onerous regulations, and higher taxes, which naturally drive up costs.

blue state economic policies liberalism leftism economy regulation tariffs
(Washington Examiner illustration; Getty Images)

Home ownership is a quintessential part of the American dream. But sadly, blue-state housing is on average 57% more expensive than red-state housing. State and local regulations, not greed, make it more time-consuming and expensive to build in the average blue state than in red states. For example, all 16 of the states controlled by Democrats have a residential energy code that is stricter than the median state. Also, property taxes in blue states are about 24% higher than in red states.

Residential energy codes and property taxes are just two examples of how blue states drive up housing costs with onerous restrictions, fees, and taxes.

Utilities tell the same story. 

Utility prices are 15% higher in blue states than in red states, as 11 blue states take part in cap-and-trade regimes versus only one Republican-controlled state (New Hampshire). Incidentally, utility prices are also 15% higher on average in cap-and-trade states than in non-cap-and-trade states, again showing that corporate greed isn’t the problem.

Transportation costs are 14% higher in the average blue state, where self-inflicted policy wounds deserve most of the blame. No state has inflicted more financial pain on its residents for simply wanting to drive a car than California, where a gallon of regular gasoline costs $5.78, compared to an average of about $4.00 in the other 49 states.

California chose sky-high gas prices. Despite possessing plentiful oil reserves, the state has taken every step imaginable to raise prices, including requiring its own special gasoline, the California Reformulated Gasoline. It also imposes costly low-carbon fuel standards that punish Californians for doing something as American as driving a car.

California’s blue West Coast neighbors, Washington and Oregon, have also adopted low-carbon fuel standards and other expensive programs that have helped drive gas prices to $5.47 and $4.99 in those states, respectively.

Lawmakers and regulators at all levels of government make countless decisions that layer on costs and affect which goods and services American families can afford to buy: strict efficiency standards on appliances; onerous state inspections; environmental reviews; energy mandates; occupational licensing; union mandates; price controls; red tape in permitting; excessive taxes and fees; reporting requirements; wasteful spending and subsidies — the list could go on.

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In short, affordability doesn’t stem from corporate greed so much as from governments that are greedy for power and other people’s money.

While blue states have more room for improvement, all states should work on making life affordable for their residents. Lawmakers should start by not blaming the effects of bad government policies on “corporate greed.”