Corporate cronyism is a term that describes a system where success in business depends on rigging the relationships between a company and government. Corporate welfare, special treatment, and onerous regulation of a businesses’ competition produce an unfair and unjust playing field where the well-connected succeed and the rest aren’t even given a chance.
One needn’t look far in Michigan to find examples of this kind of perverse and destructive relationship between government officials and big business — just take a gander at DTE and Consumers Energy.
Last Christmas, DTE and Consumers Energy left a giant lump of coal in families’ stockings, when state regulators agreed to their demands to raise rates by $258 million a year.
Now, just over a month later, they’re back. This month DTE Energy filed a new request with the Michigan Public Service Commission to raise rates an additional $344 million a year.
But the $602 million in new rate hikes Michigan electric customers can see represent only the tip of the crony corporate iceberg hiding beneath the surface — with lawmakers and regulators racing toward it at top speed.
The real disaster for ratepayers comes in the form of Senate Bill 437 — the so-called “Nofs-Nesbitt” plan — legislation that would kill electric choice in Michigan and force every electric customer in the state to purchase their juice from a monopoly utility.
Check out Freedom Fund Chairman Greg McNeilly’s column from the Detroit News to learn more about this devastating legislation.
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P.S. Check out this week's important updates focused on economic and personal freedom in Michigan below.
Expand FOIA for Full Transparency
The water crisis in Flint underscores again the need for more transparent and accountable government in Michigan, which starts with changing the state’s Freedom of Information Act (FOIA) laws, among other improvements.
The Legislature and governor’s office must be subject to FOIA. The exemptions they enjoy block the public from information and communications at the highest levels of state government that is rightly theirs.
Unions Are Super PACs
A PAC, or political action committee, pools contributions and can both give money directly to candidates and pay for independent political activities on a candidate’s behalf. A major difference between a PAC and a super PAC is that there is no cap on how much money can be contributed to a super PAC. Also, super PACs are not allowed to contribute directly to or coordinate with election campaigns.
“It seems like everyone tends to think of super PACs as being something primarily associated with the far right,” said Dennis Darnoi, a political consultant with RevSix Data Systems. “They see super PACs as being funding from the Koch brothers and sources like that. Without ever looking closely at political funding issues for themselves, most people probably equate super PACs with conservative candidates and issues. I think that’s largely due to the way things are generally reported by the news media.”
Another Union Stronghold Goes Right-to-Work
Last Friday, West Virginia legislators (overriding the veto of Gov. Earl Ray Tomblin) kept the pressure on, taking another longtime labor stronghold into the ranks of right-to-work states. Twenty-six states—a majority—and the territory of Guam now prohibit arrangements requiring all employees to pay union fees whether they support the union or not—or even had a say on whether to unionize or not.
The expansion of employee financial freedom into union strongholds like West Virginia and Michigan shows that the public is dissatisfied with the current union boss power structure in workplaces. The system hasn’t been meaningfully reformed since the Truman Administration, when right-to-work laws were first permitted. That’s why forward-thinking labor reforms that go beyond the financial freedoms in right to work have been proposed in the Employee Rights Act (ERA), sponsored by Sen. Orrin Hatch and Rep. Tom Price.