Michigan lawmakers are looking out for auto dealers. Sounds nice, right? Well, it does if you’re a new car dealer who doesn’t like the fact that that upstart auto maker Tesla hasn’t followed the herd when it comes to selling their new cars.
The state’s legislature recently passed a bill that bans direct sales of new cars to customers, requiring a dealer to broker the sale. The bill is awaiting signing by governor Rick Snyder.
The National Automobile Dealers Association, which represents almost 16,000 new-car dealers, favors the franchised-dealer network.
“States are fully within their rights to protect consumers by choosing the way cars are sold and serviced,” Charles Cyrill, a spokesman, said in an e-mailed statement. “Fierce competition between local dealers in any given market drives down prices both in and across brands. While if a factory owned all of its stores, it could set prices and buyers would lose virtually all bargaining power.”
Are states “fully within their rights” to block consumers purchasing a legal product directly rather than going through an approved agent? I’m going to say that they’re not. At all. Sure, there may be no laws that expressly forbid them from doing it (though this seems more a case for the Federal government under the Interstate Commerce Clause), but just because you can do something doesn’t mean you should. This is a big old “don’t”. » Read more
Many progressives are looking forward to increased government oversight over the auto industry. They see this as a chance to influence the types of vehicles that are produced and to dictate that production be turned to socially beneficial uses, including the manufacture of green cars that auto manufacturers are not manufacturing. These vehicles are not manufactured presently because car manufacturers see bigger profits in continuing to produce SUV’s and more cheaply built sedans. Viewing this judgment as short-sighted, progressives are overjoyed at the prospect of including non-monetary considerations such as ecology or social needs in deciding what to produce. We who oppose the nationalization are viewed either as being too stupid to recognize the benefits of introducing considerations other than profits to production decisions, or as being wed to outdated economic theories or to be apologists for fat-cat capitalists.
This is incorrect. Rather, the progressives who support nationalization are being very short-sighted and are threatening to return society back to feudalism and are threatening to destroy the development of new technologies, technologies that will be vital to improving our standard of living while reducing the amount of pollution and natural resources needed to maintain such comfort. This not hyperbole but rather simple fact.
The problem, which has plagued all fascist and socialist economies throughout history, is that nationalization destroys the ability of the economy to rationally allocate capital goods and invest in the future. It is this incapability that is behind the phenomenon where communist countries seem to become mired in the past with stagnant technology, bare shelves in shops and factories that routinely fail to meet production quotas. » Read more