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How Car Dealership Lobbyists Successfully Banned Tesla Motors From Texas
Funksaw writes "In a political op-ed on his blog, long time Slashdot reader and contributor Brian Boyko (the guy who did that animated Windows 8 video) — now a candidate for state representative — explains how lobbyists from car dealerships successfully banned Tesla Motors from selling cars in Texas. From the article: 'Tesla Motors doesn't just present a case study of why a lack of campaign finance reform blocks meaningful reform on the issues that Democrats care about, like climate change and health care. A lack of campaign finance reform blocks reforms on both the Left and the Right. Here's the big elephant in the room I'd like to point out to all the "elephants" in the room: With a Republican-controlled legislature, a Republican executive, and many conservatives in our judiciary, why the hell don't we have free markets in Texas? Isn't it the very core of economic-conservative theory that the invisible hand of the free market determines who gets what resources? Doesn't the free market have the ability to direct resources to where they can most efficiently be used? I'm not saying the conservatives are right in these assumptions; but I am saying that our broken campaign finance system makes a mockery of them.'"
Here's what the Tesla site says:
http://www.teslamotors.com/advocacy_texas
Here's the Dallas Observer's discussion:
http://blogs.dallasobserver.com/unfairpark/2013/09/tesla_crushed_by_car_dealer_lo.php
And Auto News:
http://www.autonews.com/article/20130909/RETAIL07/130909878/how-texas-dealers-slammed-the-door-on-tesla
http://www.geoffreylandis.com
I read the laws tesla is lobbying for on their website, it's a rather specific exemption from the dealership law for basically them:
"a manufacturer of only all electric-powered or all battery-powered motor vehicles, or a distributor of only all electric-powered or all battery-powered motor vehicles, that (i) owned and operated a new motor vehicle dealership in the United States on or before March 1, 2013, and (ii) has never sold its line make in the United States through an independent franchised new motor vehicle dealership, may own or operate a dealer or dealership, or act in the capacity of a dealer, at any location within the state and may obtain a dealer general distinguishing number under Section 503.029 of the Transportation Code."
"let's write ourselves an exemption, but slam the door on anyone coming after us"
The Ds are what most countries would call 'the right'. They are nowhere near Socialism.,/p>
That's what most Americans don't get. "Liberals" in the US would be conservatives in most other countries. We are so far at the bottom of the "socialist" rating scale that we might as well be eliminated as an anomaly.
The problem is that Libertarians want corporations to be unencumbered by regulations to the extent that they can harm people and the environment without oversight.
Nonsense. Nobody, whether Republican, Democrat, Libertarian, Green, Socialist, whatever, wants individuals to be able to freely harm others.
Libertarians and Republicans frequently call for less regulation. I'm neither, but I still believe I can explain the argument they're making: they don't want complete deregulation, they just want less of a monopoly on regulation. Government regulation is a monopoly on regulation, and regulatory monopolies lead to regulatory capture (basically, corruption), as we've seen all over the US. Private regulation, on the other hand, means something like having insurance companies "internalize the externalities". If you just now took "private regulation" to mean companies voluntarily regulating themselves without any monetary incentive to do so, I agree, it sounds absurd. But that's not what it means.
The canonical example is pollution. The argument against free markets goes something like this: without regulation, companies will pollute the skies and dump toxic waste into rivers, since it is less costly than handling the waste. In other words, the market won't price in the externalities.
The counterargument: if companies did so, they would actually be hurting people--people who breathe pollution are more likely to get cancer, fishing businesses cannot catch uncontaminated fish, etc. These individuals would then have legal standing to sue in court, and have a really good case to boot. If you also had some tort reform such as loser pays + claimants can receive third-party funding for their cases, such claimants could actually win judgments in court, rather than settling out of court for a measly $2k or simply being out-funded into oblivion.
Under this system, companies would buy liability insurance to protect themselves against such large judgments, or else risk destroying their business entirely. (And who is going to invest in that?) As a condition for continued coverage, they would be required by their insurers to submit to regular audits and comply with certain safety and waste handling procedures, etc. If the company won't submit to these regulations, insurers just jack up the rates--it's riskier to insure them, after all. The audits and other compliance are cheaper by design, so companies will go that route.
This system provides a balance between the interests of the companies affected by the regulation, and the people who would be affected without it. Insurers don't want to impose onerous regulations lest the company choose a different, better insurer. But insurers don't want to do too little, else they're liable to be mispricing their insurance and end up losing a bunch of money. And corruption is gone, because there's no sense in letting a company you're insuring change your auditing procedures when you believe that's going to cost you money. Better yet, the regulations put in place are preventative rather than reactionary. While a monopolistic regulator motivated primarily by politics may simply react to events that have already occurred and put in place regulations to ensure they don't happen again, insurers actually have an incentive to imagine the worst-case scenarios and design policy to prevent them in the first place.
Would this work? You decide. But at least get your opponents' arguments straight, first. Otherwise we're never going to get anywhere.
I will also say right now I don't see why Tesla does not work with existing high end dealers in Texas. There are several that are extremely reputable that work with a number of high end cars(lotus, maybach) and are specifically able to deal with the clientele that Tesla wants. Recall that the original gliders were supplied by Lotus.
Lotus had to stop selling cars in the US for the most part for about a year IIRC (I guess they're back now). Maybach is dead. That's probably just it: this is not the model Tesla wants.
It's an incredible amount of work to create a dealership program (you have to invent training programs and survey programs and police the heck out of the dealerships, but in terms of customer experience and financial auditing). Tesla is selling cars as fast as they can build them as is.
The Texas government has reversed in the past on car-related regulations that pissed people off - it's fairly responsive to the people when it comes to that. If people want Teslas, the government will act. It will actually be pretty interesting to watch this play out.
Socialism: a lie told by totalitarians and believed by fools.