Why did Michigan cap competition?
Steven Andersen is a Fortnightly contributor based in New York.
The sweeping regulatory reform implemented in Michigan over the past year is often couched as a response to the economic crisis. Decoupling rates from utility profits, the reasoning goes, will remove disincentives to efficiency. Reducing the subsidies that commercial customers have long shouldered will ease their financial burdens. New renewable portfolio standards and wind generation initiatives will create green jobs and much-needed infrastructure.
To be sure, the recession has hit Michigan and its manufacturing-based economy particularly hard. A disastrous 2009 saw bankruptcies at two of the big three automakers, leading to the demise of several familiar brands and sending shock waves through the auto parts supply industry. Further, the latest blows are nothing new—Michigan’s economic decline over the course of decades is a sad and familiar story.