Here’s some breaking news of the worst kind: The Atlanta Fed’s GDP Tracker posted a -1.0 percent for the second quarter. After yesterday’s -1.6 percent downward GDP revision for Q1, we are now looking at a recession in the first half of the year. That’s accompanied by roughly 8 percent to 10 percent inflation. The worst possible combination.
Today’s personal income and spending report showed a drop in consumer spending in May. And real disposable income, which is total income after taxes, after inflation, has fallen 3.3 percent over the past year. When President Biden came into office, he was handed a Trumpian economy that scored 6.5 percent growth with less than 2 percent inflation. In just 18 months, Mr. Biden’s big-government socialist economic policies have decimated a near-pluperfect American economy. It's a tragedy.
A key Biden policy that has pulled down the economy is his stubborn over-regulation of energy in particular and business in general. Radical climate change policies, the “Green New Deal,” and Mr. Biden’s insistence that he will end fossil fuels has stalled production and made prices skyrocket. But the cavalry is on the way.
Indeed, some of the cavalry’s early squadrons have already landed. Today, the Supreme Court dealt a major blow to unelected bureaucratic, deep-state federal regulators — especially energy regulators, and most particularly the EPA. The court decided in favor of West Virginia in the dispute over the Clean Power Plan, declaring that the EPA has no authority to regulate greenhouse gas emissions.
Let me put it even more bluntly: There is no Green New Deal without explicit statutory authorization. In other words, the voters elect members of Congress, and the Congress can make the laws. Unelected bureaucrats cannot. This is a huge decision by the Supremes.
For one, Mr. Biden’s proposed 32 percent cut in carbon emissions by 2030, only a few years from now, is off the books. For another, Mr. Biden’s carbon-free electricity by 2035 is off the books. The self-exalted, power-grabbing, Green New Deal-infested Biden EPA just got its wings clipped. It may have had its ears cut off. Perhaps it’ll be left with a nose for breathing purposes, but that’s about all.
The executive branch cannot take matters into its own hands. The principle articulated by the court is known as the “major questions doctrine,” and it just means that regulatory rules that affect the whole economy cannot proceed without clear congressional laws. Also, the principle of Federalism was upheld again by the court. It is the states that are empowered to make power and energy decisions in the absence of clear federal legislation, and, constitutionally, that is how it should be.
This constitutionally backed power of Federalism is the same doctrine used by the Supremes when they moved Roe v. Wade abortion decisions back to the state legislatures and their voters who elected these representatives. Importantly, this decision by the high court extends well beyond the EPA. This puts all the federal regulatory agencies on short leash notice.
Thus the SEC has no authority to establish environmental rules for large companies. Not its mission. Similarly, OSHA exceeded its authority in mandating Covid-19 vaccinations, and the HHS cannot use its power to regulate public health in order to make labor, corporate, or even environmental decisions. The Supremes today restored representative and constitutional government.
As I said, the early squadrons of the cavalry have landed. Block by block, they’re taking back the country in a noble effort to restore life, liberty, and the pursuit of happiness. Not all is won, but in the last week or so we’ve seen strong progress.
Larry Kudlow was the Director of the National Economic Council under President Trump 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.