New Jersey just became the third state to ban the sale of Tesla cars directly to customers who want them. Because never forget that the stated glories of the free market (which are real, actually) must always take a back seat to political grift and rent-seeking companies.
Like a lot of Republicans, New Jersey Gov. Chris Christie likes to talk about how the government should get out of the way of the free market. In a speech last week in Washington, D.C., he railed against President Obama’s economic interventions. “We don’t have an income inequality problem, we have an opportunity problem in this country because government’s trying to control the free market,” he said. And he urged his fellow conservatives to shout their opposition to government regulations from the rooftops. “We need to talk about the fact that we’re for a free-market society that allows your effort and your ingenuity to determine your success, not the cold, hard hand of government determining winners and losers.”
Then Christie came back to New Jersey and signed off on a cold, hard government regulation that blocks Tesla from selling its cars in the state.
The rule change prohibits automakers from selling directly to consumers, as Tesla does. Instead, it requires them to go through franchised, third-party dealerships, as the big, traditional car companies do. In other words, it requires that the middle-men get their cut. The Christie Administration made the move unilaterally, via the New Jersey Motor Vehicle Commission. It was urged on by lobbyists for the state’s existing car dealerships, which fear the competition. The upshot is that Tesla will be forced to stop selling cars at its two existing dealerships in the state, and drop its plans to build more. It’s unclear what will happen to the employees of those dealerships.
New Jersey is the third state to effectively block Tesla by banning automakers from selling their cars directly. The other two are Texas and Arizona.
Also states that are run by people who declare the virtues of the free market right up to the point where someone pays them in campaign contributions to distort the market by keeping competitors out. This is the kind of regulation that everyone should be able to agree is wrong — liberals, conservatives, libertarians — but money talks. Tesla doesn’t have the resources to buy off enough politicians to counter the influence of the Big Three automakers and the dealerships that sell their products.