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Posted by on Apr 6, 2015 in Economy, Government, Law, Politics, Science & Technology | 5 comments

Tesla’s Stalled Nationwide Rollout: A Case Study in Political Conflicts of Interest

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While it’s possible you haven’t yet heard of Tesla, the company best known for their mold-breaking automobiles, that probably won’t be true for much longer. With famed billionaire entrepreneur Elon Musk at the helm, Tesla is looking to disrupt a number of major industries, including electric automobiles, home energy, and even privatized space travel. In 2013, Tesla’s Model S was named by Consumer Reports as the best car they’ve ever tested.

Unfortunately, public servants and lawmakers across the country seem hell-bent on re-enacting certain pivotal scenes from Atlas Shrugged by literally outlawing Tesla from competing in some of these existing markets. Fans of Ayn Rand’s tour-de-force will be reminded of Hank Rearden’s struggle to bring his revolutionary product, Rearden Metal, to market in the US. Say what you will about Ayn Rand (I know I have), but she was pretty damned prescient sometimes.

The latest attack on ingenuity comes from West Virginia.

West Virginia governor Ray Tomblin recently signed a bill into law that effectively halts Tesla’s planned expansion into the state. The law would prevent any automobile manufacturer from establishing and operating their own dealerships. In other words, Tesla is not allowed to sell directly to the American public; they must go through an established dealership. If that sounds questionable to you, you’d be right.

Here’s where the conflict of interest comes in. The president of the Senate in West Virginia, Bob Cole, is an auto dealer. It’s not too hard to see why they have a problem with Tesla selling directly to the public.

And West Virginia isn’t alone; similar laws were also signed into law in New Jersey by Chris Christie (though he later “changed his mind”) and Michigan (which, of all the states in the Union, is the one most synonymous with automotive excellence).

All told, though, Tesla’s attempt at establishing a direct-sales market have been outright banned in five states, and is being fought in court in a further six states.

The most frustrating part of the story may be the fact that governor Tomblin was originally against the bill; he’s quoted as saying, “One of my goals is to attract businesses or bring jobs into the state…I have a lot of friends who are car dealers, and maybe they would like to protect their turf, but at the same time, it’s just another business.”

Look at that, folks—he gets it. While Tesla is anything but “just another business,” he’s right in recognizing that bringing Tesla into the fold would create both jobs and competition.

And yet he still signed this bill into law, probably because of those “friends” he’s proud of telling us about. If average citizens are the ones most in need of a more competitive automotive industry, then it’s perfectly clear that governor Tomblin does not work for the average citizen.

The plight of Tesla has to be the most naked example I’ve seen in a while of duly elected politicians using their power to protect their own financial interests. If we’re being honest with ourselves, we’ve come to associate this kind of political hypocrisy with the Republicans, who demonstrably take more money from private interests.

But Tomblin is a Democrat, which confirms that neither of our major political parties are immune to the temptation to throw their weight around for personal gain.

Politicians of all stripes ostensibly support free market values like competition and innovation, and yet many of them insist on blocking, at literally every turn, any attempt to embrace those values. We’re seeing it with the corporate outcry against net neutrality, and now we’re seeing it—in multiple states, no less—with Tesla. We’re apparently meant to adhere slavishly to capitalism’s dog-eat-dog strictures until something comes along—be it a new company (Tesla) or a new piece of legislation (net neutrality)—that threatens not the status quo, but the incumbent companies in that particular industry. Peter G. Calabrese might call this kind of legislation “arbitrary and capricious,” but I’d call it something else: weak, venal, and damaging to the very idea of democracy.

Governor Christie grudgingly did the right thing, in the end, when this issue came up in New Jersey. Let’s hope governor Tomblin gets his act together, too.

Here’s Governor Tomblin’s official Twitter account. Feel free to tell him what you think of this decision.

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Copyright 2015 The Moderate Voice
  • Rambie

    Massive public shaming seems to be the only way for the average citizens to get politicians to listen.

    • Slamfu

      It also seems to be the time when the public actually tunes in the most, when someone is being humiliated. Not unlike a reality TV show. People don’t watch to see reality, they watch for the conflicts.

      Now, guess which one I was talking about in the last line of that paragraph.

  • Slamfu

    It really is amazing to me how the GOP has the bona fides for being the party of Capitalism, when so much of their efforts seem to be about deregulation, which is almost entirely about letting the big dogs in any given industry corner the market and/or screw the general public by eliminating competition and creating de facto monopolies. Basically, in the name of Free Markets, they are strangling the actual Free Marketplace. Oh irony. Or maybe its just good old fashioned corruption and misdirection.

    • pschearer

      So-called monopolies are a widely misunderstood concept. Only government can create true monopolies by prohibiting entry into a market, as was formerly true with Ma Bell (in most areas) or most local utilities. Something is not a monopoly just because there is one dominant company (and I say that even as someone who competed with IBM much of my career). It is not a monopoly just because nobody chooses to compete (as was the case with the Topps company’s former status as the only bubble-gum sports-card company the major leagues would deal with–your tax dollars at work). It was definitely not a monopoly when the government accused the largest manufacturers of paint pigments of having a “joint monopoly” (say what!?!). Monopoly cases are just exercises in government power over some company that has become too successful (whatever that could mean) for someone who can’t tell the difference between economic power and political power. Hint: the ones with the political power are the ones with the guns, handcuffs, and prisons.

  • The_Ohioan

    Seems like Tesla doesn’t want to use franchise dealerships? Why? How are they different from direct dealerships? What do they call their own dealerships? Just looked and they have 7 dealerships in SF bay area, 8 in Chicago, 3 in Atlanta. What am I missing?

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