Two Worlds
You can't tell me what to do.
A Supreme Court Remedy for Nationwide Injunctions
Why doesn’t the Supreme Court exert its authority under the Separation of Powers and change the federal rules to prevent lower courts from issuing national injunctions?
‘The REA empowers the Supreme Court to “prescribe general rules of practice and procedure” such as the Federal Rules of Civil Procedure. The Supreme Court can prescribe them on its own under Section 2072. Any rule prescribed must be submitted to Congress by May 1 and “shall take effect no earlier than December 1” of the same year, “unless otherwise provided by law.” If Congress does nothing, the rule stands.
‘The REA respects the separation of powers between Congress and the Supreme Court by granting final prescription authority to the high court, the only federal court established by the Constitution. Lower federal courts are created by Congress. By acknowledging the justices’ power to prescribe, the REA respects their unique constitutional status, while retaining Congress’s ability to review and reject any rule they prescribe.
‘The question is whether the Supreme Court is willing to forgo the process under Section 2073 of the REA, which dates to 1988. Critics will note that Section 2073, which involves input from advisory committees, the Judicial Conference and the public, has been routinely employed and become the usual way of developing rules.
‘But the Section 2073 process often takes years, and federal courts are in crisis. Nationwide injunctions are frustrating the presidency, eroding the separation of powers, and threatening judicial legitimacy. The justices’ authority as well as the president’s is under assault by rogue judges claiming national power using nationwide injunctions. Such national power must be reserved to the only court with constitutional authority to bind the entire nation: the Supreme Court.’
Rethinking regulatory fragmentation
The prime example here is financial regulation. When multiple agencies regulate the same activity, hilarity confusion reigns.
‘Regulatory fragmentation occurs when multiple federal agencies oversee a single issue. Using the full text of the Federal Register, the government’s official daily publication, we provide the first systematic evidence on the extent and costs of regulatory fragmentation. Fragmentation increases the firm’s costs while lowering its productivity, profitability, and growth. Moreover, it deters entry into an industry and increases the propensity of small firms to exit. These effects arise from redundancy and, more prominently, from inconsistencies between government agencies. Our results uncover a new source of regulatory burden, and we show that agency costs among regulators contribute to this burden.’
Trump Ushers In ‘New High Water Mark’ for Deregulation
The problem with the deregulatory implementation is that it is going to follow the cost-cutting and other measures (e.g., tariffs) the Administration is employing to arrest the economy and instigate some actively deflationary (not just disinflationary) forces.
Maybe July 2026 will be the starting point for the deregulation momentum. If so, investors should keep their powder dry until its anticipation starts to ripen, perhaps.
‘President Trump is following through on his pledge to usher in one of the most sweeping deregulatory drives in modern U.S. history, moving swiftly to slash environmental rules and bank oversight, remove barriers to cryptocurrencies, and reverse the Biden administration’s restrictions on energy production.
‘The most aggressive plans for a red-tape rollback have come from the Environmental Protection Agency, which in a single day announced 31 actions to deregulate U.S. environmental policies, including rules for power plants, the oil-and-gas industry, electric vehicles and wastewater.’
Good Night to a Biden Overdraft Rule
Tim Scott making things happen with the Congressional Review Act.
‘The Senate passed a resolution, 52-48, disapproving the CFPB overdraft rule. The Congressional Review Act allows Congress to scuttle rules with a majority vote within 60 days, along with the President’s signature. The edict capping overdraft fees was ripe for review, and Missouri Sen. Josh Hawley was the lone GOP dissenting vote.
‘All the other Senate Republicans understand that this price control will hurt the low-income Americans it is supposed to help. The rule effectively caps what banks can charge when consumers overdraft their checking accounts, at $5 per transaction, down from today’s $35 average. The agency dubiously styled such fees as loans, which are subject to more regulations.’
Republicans for the Green New Deal
The problem with rolling back the Green New Deal’s subsidies is that they’re so large. There are some people who have benefited tremendously and they’re not going to go gently into the good night. Not only will the distortions on electricity markets add crazy amounts of debt, but they’ll also act as a significant friction for economic growth. But at least the Beautiful People will make out.
‘President Trump campaigned on repealing the IRA’s Green New Deal, but the renewables lobby won’t give up its iron rice bowl without a fight. Some Republicans have bought their line that rolling back the subsidies will raise energy prices. If you believe this, California Gov. Gavin Newsom has a $120 billion bullet train to sell you.
‘Like other entitlements, the green subsidies have outgrown their original purpose. Congress established the wind production tax credit in 1992 and the solar investment tax credit in 2005 to support these “infant” industries. They are now creating huge distortions in electricity markets and will add trillions of dollars to the deficit if not checked.’
I’m skeptical. The DEI construct no longer exists as it was. My sense is that it is baked into the DNA already. It may hide in the shadows of unaccountability going forward.
This is the guerilla phase of the war. The destruction of the army has led to the distribution of its armed soldiers into the general population. Asymmetric warfare, indeed.
‘BREAKING: The University of Michigan is closing its DEI office and discontinuing its DEI strategic plan, including all “unit plans, related programming, progress reporting, training and funding.” DEI is done at UMich. This is huge news!’
What is the disciplinary violation here?
‘“DEI, Redundancy, and Bullshit Jobs” Here’s a crazy story: A Brown U. student built a website, “Bloat at Brown,” with a database of about 3,500 university staff and emailed them, asking “what tasks you performed in the past week” and “how Brown students would be impacted if your position was eliminated.” About 20 people replied. One told him to “f**k off.” The school advised employees not to respond and referred the student to the disciplinary office (he hasn’t been charged with any violations yet). Then his website was hacked by someone with a Brown IP address.’
Editor’s note: nothing will change, dear readers.
‘Great new article from the inimitable Stuart Taylor Jr. on how DEI policies have ravaged Princeton. With a hostile administration looking for an excuse, this is Princeton's chance to reform internally.’
National Diversity Council Files For Bankruptcy, Says Top Employees Stole Millions
In the words of George Costanza, “Was that wrong? Should I not have done that?”
‘A prominent diversity, equity, and inclusion nonprofit declared bankruptcy this month after its board accused its founder and top employees of stealing millions of dollars, a Daily Wire investigation found. Bill Clinton and Oprah Winfrey are set to keynote a conference run by the alleged thief, apparently through his for-profit firm, next month.
‘The National Diversity Council filed for bankruptcy on March 17 after its board said in a lawsuit that its founder R. Dennis Kennedy “improperly paid himself millions of dollars from NDC’s donor funds.” The suit said Kennedy “paid himself a grossly excessive salary” while using the nonprofit as a front for his for-profit diversity consulting business called Diversity & Leadership Inc (D&L).
‘The group’s 2020 IRS disclosure said Kennedy was paid $450,000 for 10 hours of work per week. In 2022, at the height of corporations’ DEI hype, Kennedy, chief executive officer Ángeles Valenciano, and chief financial officer Jason deGroot also “unilaterally decided that they were owed almost $3 million in ‘back pay,’ and then paid themselves more than $1 million of donor funds,” the lawsuit said.’