Archive for November, 2013

President Obama’s FTC goes after,….Piano Teachers!!! REALLY???


Teddy Roosevelt busted Standard Oil. The Obama administration? It’s making the world safe from rapacious piano teachers.

Every month, it seems, brings a new story of this presidency leveling the intimidating powers of the federal government against some law-abiding citizen. Now comes a terrifying tale of how the Federal Trade Commission, a governmental Goliath, crushes an average David because it can.

In March of this year, a small nonprofit in Cincinnati-the Music Teachers National Association-received a letter from the FTC. The agency was investigating whether the association was engaged in, uh, anti-competitive practices.

This was bizarre, given that the MTNA has existed since 1876 solely to advance the cause of music study and support music teachers. The 501(c)(3) has about 22,000 members, nearly 90% of them piano teachers, including many women who earn a modest living giving lessons in their homes. The group promotes music study and competitions and helps train teachers. Not exactly U.S. Steel.

The association’s sin, according to the feds, rested in its code of ethics. The code lays out ideals for members to follow-a commitment to students, colleagues, society. Tucked into this worthy document was a provision calling on teachers to respect their colleagues’ studios, and not actively recruit students from other teachers.

That’s a common enough provision among professional organizations (doctors, lawyers), yet the FTC avers that the suggestion that Miss Sally not poach students from Miss Lucy was an attempt to raise prices for piano lessons. Given that the average lesson runs around $30 an hour, and that some devoted teachers still give lessons for $5 a pop, this is patently absurd.

MTNA Executive Director Gary Ingle, who has been at the organization 17 years-and who agreed to talk when I reached out about this case-said that he and the group’s attorneys immediately flew to Washington to talk to federal investigators. They explained that this provision had been in the group’s code for years, and that it was purely aspirational. The association has never enforced its code, and no member has been removed as a result of it.

The FTC didn’t care. Nor did it blink when the MTNA pointed out that the agency has no real authority over nonprofits (it is largely limited to going after sham organizations) and that Congress has never acted on the FTA’s requests for more control over 501(c)3 groups. Nor was the agency moved by the group’s offer to immediately excise the provision. The investigation would continue.

With a dozen employees and a $2 million budget, the group doesn’t have “the resources to fight the federal government,” Mr. Ingle says. The board immediately removed the provision from its code, but the MTNA staff still had to devote months compiling thousands of documents demanded by the agency, some going back 20 years: reports, the organization’s magazines, everything Mr. Ingle had ever written that touched on the code. Mr. Ingle estimates he has spent “hundreds upon hundreds” of hours since March complying with this federal colonoscopy.

This October, MTNA signed a consent decree-its contents as ludicrous as the investigation. The association did not have to admit or deny guilt. It must, however, read a statement out loud at every future national MTNA event warning members against talking about prices or recruitment. It must send this statement to all 22,000 members and post it on its website. It must contact all of its 500-plus affiliates and get them to sign a compliance statement.

The association must also develop a sweeping antitrust compliance program that will require annual training of its state presidents on the potential crimes of robber-baron piano teachers. It must submit reports to the FTC and appoint an antitrust compliance officer. (The FTC wanted the officer to be an attorney, but Mr. Ingle explained that this would “break the bank,” so the agency-how gracious-is allowing him to fill the post.) And it must comply with most of this for the next 20 years.

The MTNA is not yet free of fear; the FTC has still to approve the consent decree. An FTC spokesman told me the agency does not confirm or deny the existence of investigations. The organization to this day has no idea how it became a target, nor will it ever because the FTC doesn’t have to provide it.

While this abuse of power has received no national attention, it has riled the music community. Brian Majeski, the editor of the journal Music Trades, lambasted the FTC in a December editorial, noting that “a consumer watchdog that sees piano teachers as a threat either has too much time on its hands, or badly misplaced priorities.”

That might be too kind. Whether it is the IRS targeting conservatives, the Justice Department hounding Gibson Guitar, or the EPA conducting an armed raid on an Alaskan mine-this administration has a tendency toward abuse of power. That’s how antitrust laws created to tackle mega monopolies end up being used to hound and hammer a nonprofit organization devoted to piano teachers.


Michigan eliminates 1,500+ rules – for environment, occupations and one requiring smiling child care workers

By Melissa Anders | 
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LANSING — The state has been cleaning house the past two and a half years, scrubbing hundreds of administrative rules in an effort to trim red tape and promote business growth.

While many of the rescinded rules are obsolete, unnecessary or even unenforceable, some regulatory changes have raised concerns among environmental activists and others keeping an eye on the process.

Michigan State Capital at Dusk

In 2011 Republican Gov. Rick Snyder created the Office of Regulatory Reinvention within the Department of Licensing and Regulatory Affairs. The office has reviewed more than 19,000 rules and so far has rescinded 1,950 rules. Some rules were replaced with others, and new ones were added, so the net rule reduction comes out to 1,554, the office announced Thursday.

Many of the changes were recommended by eight Advisory Rules Committees (ARCs) that studied regulations on the environment, inspections and permitting, insurance and finance, liquor control, natural resources, occupational licensing and workplace safety. The committees, which included various stakeholders and state employees, have so far publicly released 320 recommendations.

While some recommendations involve rule changes, others require legislation. So far the state has implemented more than 100 ARC recommendations, with more expected.


• See the eliminated rules here.
• Search for rules here.
• Read the Advisory Rules Committees reports here.
• Provide comments and feedback to the Office of Regulatory Reinvention here.

Source: Office of Regulatory Reinvention

Even if a rule hadn’t been actively enforced, businesses had to wade through the regulations to determine if they’re in compliance.

“That’s the reason that we thought it was so important to give these rules a good scrub, to clean them up, and to get rid of this superfluous and obsolete language,” said Kevin Elsenheimer, a deputy director at LARA who oversees the ORR.

One somewhat unconventional rule requires child care workers in Michigan to smile. He said those rules, which will be removed in January, are unnecessary and impossible to enforce.

Many changes have occurred without much public attention. Others have garnered more interest, namely those involving air quality rules, occupational licensing, and alcohol regulations.

Environmental groups contend some changes would put public health and safety at risk, such as a proposal to reduce the number of toxic air contaminants that would be subject to certain regulations. Supporters of the change say it would bring Michigan more in line with other states while still exceeding federal regulations and protecting public health.

Environmental activists also have spoken against an overhaul of Michigan’s wetlands regulations. Michigan is one of just two states that have stricter rules than the federal regulations, and that’s appropriate given the state’s reliance on its fresh water system, Jack Schmitt, deputy director of the Michigan League of Conservation Voters.

James Clift, policy director for the Michigan Environmental Council, participated in the environmental rules committee. He said he agreed with about two-thirds of the recommendations, but thought the rest either minimized public health concerns or just weren’t efficient or cost-effective changes.

“I wouldn’t say they don’t care (about public health), but they care more about making the businesses happy, and that’s where we’re concerned,” he said. “We think they’re undervaluing the public health of Michigan residents.”

Some deregulation is needed to help Michigan’s small businesses succeed, said Lonnie Scott, director of liberal advocacy group Progress Michigan.

“If that’s the intent, then that’s one thing,” he said. “There’s this other deregulation that just seems to be for deregulation’s sake that really seeks to just increase corporate profits, often at the expense of worker or environmental safety. I think that’s where we get into problems.”

For example, Scott said the repeal of Michigan’s item pricing law was a “terrible mistake” that seemed to help businesses more than consumers.

Elsenheimer said that the state’s goal is to continue to protect public interests while getting rid of burdensome rules. He used the example of a rule requiring businesses to submit a certain wastewater report that was not used by environmental regulators. Another policy required auto insurers to produce large, detailed rating process booklets for their policy holders.

Eliminating those rules, he said, saves businesses time and money but doesn’t have a real-world impact on the public. In the insurance example, some companies spent $1 million each year to produce the booklets. Policy holders can still get detailed information upon request.

Businesses take note of a state’s regulatory environment, said Jason Geer, director of energy and environmental policy for the Michigan Chamber of Commerce.

By paying attention to business needs and making it easier for them to operate and expand here is “huge in changing the image of the state” as a “more competitive and a better place to do business,” he said.

MI Senators Vote To Continue Special Subsidy Program Without Knowing Whether It Works

State Senate wants to extend $844 million program; bill now heads to the Michigan State House

Michigan State Capital at DuskThe state senate overwhelmingly passed a bill extending the life of an $844.5 million economic development program despite the legislators not knowing how well the program was performing because of a lack of transparency.

Senate Bill 269  would extend funding for the 21st Century Jobs Fund an additional four years; it was supposed to sunset in 2015. It passed the senate by a 33-4 vote Oct. 31. The bill now goes to the House of Representatives. The 21st Century Jobs Fund was created using money from a tobacco company lawsuit settlement.

“It’s not possible to get a clear picture of how well the 21st Century Jobs Fund is performing because the state doesn’t report on the results on many of their projects,” said James Hohman, a fiscal policy analyst for the Mackinac Center for Public Policy.

The Michigan Economic Development Corp.’s 2012 report stated the 21stCentury Jobs Fund’s Competitive Edge Technology Grants program gave out $137 million in grants and loans and created 999.19 full-time jobs.

But the information about the 21st Century Job Fund’s performance is not clear.

For example, that 2012 MEDC report states that the company IA Inc./Three Fold Sensors reported negative 3.84 jobs.

Hohman questioned how a company could generate negative 3.84 jobs and wondered whether legislators know what taxpayers are receiving for their money that is invested in this program.

Sen. Rick Jones, R-Grand Ledge, said he supports more transparency on how 21st Century Jobs Fund money is spent. He voted “yes” on the bill to provide more money to the fund.

“I think the feeling that if we don’t have some sort of mechanism in place to attract jobs in Michigan, then Indiana and Ohio and surrounding states will eat our lunch,” Sen. Jones said.

But Hohman said these incentive programs are better at producing press releases than actual jobs.

The 21st Century Jobs Fund has been roundly criticized for inaccurate reportingrepeated failings of past companies subsidized, and the idea that bureaucrats are better at spending money through centralized planning than the private market/sector.


Hey Gov. Snyder,…repeal the prevailing wage law,…and shut down this program,…and POOOOOOF,….$1,2 Billion Dollars for Michigan roads and bridges!!!


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