Michigan Crony Capitalism: Secret Spending

A crony capitalism agency of the Michigan state government has hidden their expenses on their own authority.

It is pretty amazing that our state governments pretend that taking taxpayer money and giving it to huge corporations is in the public interest and the legitimate power of the state. But it is even more amazing when such a department of crony capitalism (i.e. pseudo-capitalism) makes its work—which is allegedly so good for the economy—a state secret.

Back in 2009, the Michigan Economic Development Corporation (MEDC) stopped publishing the companies it was subsidizing.

Why?

Incredibly, this information was not only unavailable to the public. It was also unavailable to Michigan legislators.

According to the Daily Caller,

Several state lawmakers believe the MEDC should be compelled to provide full disclosure even if that requires a change in the law. 

“Companies that take the money should have to agree to allow the information to be disclosed,” Democratic state Rep. Jeff Irwin told Michigan Capitol Confidential in March. “Otherwise how are we supposed to do any analysis? How are we supposed to know whether that money would be better used to fill potholes or do other things instead of using it for job incentive programs?”

Republican state Rep. Martin Howrylak agreed, saying, “on the argument that MEDC should be required to provide more transparency there really isn’t anyone who disagrees; it cuts across the political spectrum.”

So basically we have a state agency acting as its own government on its own authority. The people elected by the residents of Michigan have no authority over it.

(Of course, if legislators would automatically de-fund departments that defy them or keep secrets from them, then we would see bureaucrats acting in a way that is more respectful of legislators. But why should we expect the Michigan legislature to demand more respect than Congress does for itself?)

So how did the MEDC get the authority to withhold this information?

In an email responding to questions posed a mere 12 weeks earlier by Michigan Capitol Confidential, MEDC Vice President of Communications Michael Shore said the agency decided to make the change based on “informal verbal advice” from the attorney general’s office.

That advice didn’t come out of the blue, though. Shore also confirmed in his email that MEDC had requested the ruling, but did not make either the request or the response public because “it was verbal.”

When the policy change first attracted notice, the agency said merely that it would no longer reveal the names of individual recipients because it was considered confidential tax information, but provided no details about how it reached that conclusion or whose opinion it was.

Coincidentally, this “informal” authorization was solicited soon before the MEDC made the Michigan taxpayers liable for “nearly $10 billion in unfunded tax credit obligations, much of it resulting from 20-year commitments to provide Ford, General Motors, and Chrysler with refundable tax credits.”

Ford, GM, and Crysler are welfare recipients. Crony capitalism means that businesses posing as additions to the economy are able to hide the fact that they are actually getting welfare.