Should there be federal regulation?

The Tea Party seems to be kicking up the dust, readying for a real fight over the notion of big government. This means we should talk about what government should be for. The Right seems to think there's no need for any central government except to run the defense of the country and manage the economy. The Left says there's always a need for government to protect the interests of the people, whether through education, healthcare, a transport system, and so on. It comes down to money. One side sees no need for central taxation, arguing everything can be done by individual states. The other says there should be national standards to ensure no one is penalized because of the accident of where they live. In a sense, this is an academic argument that can be allowed to pass us by when the economy is doing well. But with unemployment high and the deficit mounting, the questions have more relevance.
To explain the point with an example, let's go down to Texas where the race for the governorship is hotting up. One of the issues that's really firing up the local voters is the premiums charged for insuring their homes. It seems the average rates are about $625 a year higher in Texas than in any other state in the nation. Who would have thought it costs so much more to have a home in Texas. The Republicans admit the Texan rates are among the highest in the country (it's more statistics and damned statistics in play here), but say there's no need for any regulations to protect consumers. The current GOP governor is a free market capitalist. He believes in self-regulation and the power of the consumer. If you do not like a product, you do not have to buy it. There's always someone with a better deal and, if consumers act rationally, they will all move their business and put the bad companies out of business.
In fairness, there's a rule which requires insurers to notify the local Commissioner for Insurance if they are going to increase premiums and he can intervene if there's any evidence the rates are out of line. So, the Commissioner has no power to prevent a company from increasing its rates. And, since State Farm has been locked in litigation over the last time the Commissioner did intervene, the last eight years has seen no activity from the Commissioner to protect consumers. By coincidence, rates have risen by an average of about 50% during this period.
So, to sum up, if you live in Texas you pay more than anyone else for your home insurance and the premium rates can be increased without limit whenever the insurers decide they want more money from you. And the Republican governor thinks the system is working well? You can tell he's rich and can pay his home insurance without flinching. It's rare to find such a clear-cut issue so high on the electoral agenda. It will be interesting to see how the vote turns out and, if the incumbent wins, will this actually be a vote in favor of paying the maximum to insure your home?