Breaking news of the worst kind this evening: The Atlanta Fed's GDP tracker posted a -1% for the second quarter. After yesterday's -1.6% downward GDP revision for Q-1, we are now looking at a recession in the first half of the year, accompanied by roughly 8 to 10% inflation — the worst possible combination.
Today's personal income and spending report showed a drop in consumer spending in May in real disposable income, which is total income after taxes, after inflation, has fallen 3.3% over the past year. When Joe Biden came into office, he was handed a Trumpian economy that scored 6.5% growth with less than 2% inflation. In just 18 months, Biden's big-government socialist economic policies have decimated a near pluperfect American economy. It's a tragedy.
Now, 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, the Green New Deal and Biden's insistence that he will end fossil fuel has stalled production and skyrocketed prices, 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, most particularly the EPA. The court decided in favor of West Virginia in the dispute over the clean power plan and declared that the EPA has no authority to regulate greenhouse gases.
Let me put it even more bluntly: There is no Green New Deal without explicit statutory authorization. In other words, the voters elect Congress and the Congress can make the laws, but unelected bureaucrats cannot. This is a huge decision by the Supremes. For one, Biden's proposed 32% cut in carbon emissions by 2030, only a few years from now, is off the books. For another, 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 they'll be left with a nose for breathing purposes, but that's about all. The executive branch cannot take matters into their 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 who 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 states and their legislatures and their voters who elected the legislatures.
Importantly, this decision by the court extends well beyond the EPA. This puts all the federal regulatory agencies on short-leash notice. For example, the SEC has no authority to establish environmental rules for large companies. No law. Not their mission. Similarly, the OSHA administration had exceeded its authority on mandating COVID-19 vaccinations in a court ruling last January.
The HHS cannot use the 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, folks, but in the last week or so, we've seen strong progress. That's my riff.
This article is adapted from Larry Kudlow's opening commentary on the June 30, 2022, edition of "Kudlow."