IF Thomas Edison was Alive Today, The US would Ban Electricity to Protect Lantern Makers

There’s a growing majority of business owners in the US who would rather cheat that compete (despite what you might be thinking, it wasn’t always this way in the US).

Business owners willing to bribe a politician in order to protect their company from competition.  

Most recently, we’ve seen Michigan, Texas, New Jersey, Maryland, New Mexico, and Iowa block Tesla Motors, the electric car company, from selling directly to customers in the state.

In New Jersey’s case, the Republican governor, Chris Christie, claimed he was taking this action in order to protect consumers from the perils of direct sales.  The result was legislation that dictated that all cars must be sold through dealer networks.

“This administration does not find it appropriate to unilaterally change the way cars are sold in New Jersey without legislation…” New Jersey Governor, Chris Christie’s spokesman.

It was obvious why New Jersey did this.

Tesla is building a revolutionary product.

It’s not revolutionary because it is a well designed and reliable car (it’s has topped the ratings on Consumer Reports in the past).

Its revolutionary because it greatly improves the economics of driving. First off, it’s a fully electric car, not a hybrid car that uses gasoline and electricity.

This means it costs less to drive, a lot less. Based on current gasoline and electricity prices, it costs 90 percent less to run an electric car than it does a gasoline car. That’s an important savings for every American household.

It turns refueling from $70 weekly (or biweekly) visit to the local gas station into a $7 event. It’s a savings that could easily provide tens of thousands of dollars in savings to the owner over the life of the car (a friend of mine who owns a Tesla, saved $6,000 in fuel costs in the first year of ownership).

However, that savings is not the improvement that got it into trouble in New Jersey. Tesla is also trying to improve the economics of maintaining cars by changing how we buy them.

Here’s how the company’s CEO, Elon Musk, explains it:

“I have made it a principle within Tesla that we should never attempt to make servicing a profit center. It does not seem right to me that companies try to make a profit off customers when their product breaks.” Elon Musk, the Chairman and CEO of Tesla, in a letter to New Jersey.

From this statement alone, it’s easy to see the influence of the American Way on the decision making going on at Tesla.

Musk is driving his company forward based on the force of moral conviction and a belief in a vision of a better future for all Americans.

To make this future a reality, Tesla sells its cars directly to the customer to cut out the costs of the dealer network. The company can do this because since it doesn’t need a dealer repair network to keep its cars running. Electric cars don’t have spark plugs, belts, oil filters, and air filters that need constant replacement.

Tesla can diagnose many problems remotely and can often fix them by using updates, patches, and improvements sent over the air automatically to the car.

This is what set off alarm bells in New Jersey. Tesla’s approach to selling cars is clearly the future of the automobile industry and the car dealers know it.

So what happened?  Rather than innovating on ways to build a better future for themselves and their customers, these dealers opted to use clever legal reasoning to rig the game in their favor.

In this case, they campaigned for legal protection from the government based on an outdated state law. The type of protection that makes it possible for them to a profit at the expense of almost every other American.

This corruption isn’t isolated.

Just a few years ago, the financial industry became so corrupt, it led to a global financial disaster. This wasn’t any ordinary market crash. It was a financial disaster so big that it impoverished millions of American families.

Despite the severity, the bankers involved were not punished.  Worse, these banks have received trillions in subsidies from the Federal reserve since the crisis.

Unfortunately, this is yet another sign that bureaucracy and corruption in the US has become so severe, it’s very clear why the middle class that build the modern world isdying.

Join the movement to restore America's prosperity

Discussion — 8 Responses

  • Cory Newton October 24, 2014 on 4:42 pm

    I use the Tesla direct sales model, in an upcoming project. The dealers association uses their political connections and lobbying power to change the rules of the game. These deteriorations to the rules of the game, restrict technological innovation. It is an example of market power being abused. The rules of the game ought to be improved, to allow this technological innovation, which may also increase resource availability and capital stock. The abuse of market power, in this case, has less to do with “Market Failure”, and much more to do with the behavioral failures of the dealers association and politicians, that restrict such innovation.

  • DataShade October 25, 2014 on 1:39 am

    Edison might not be the best example given his treatment of motion picture technology.

  • Edward Klobucher October 25, 2014 on 8:05 am

    Well said!

  • Steve October 25, 2014 on 2:41 pm

    If aspirin were invented recently, you would of course need to get a prescription from a licensed doctor and pay $2 per pill for it from a licensed pharmacist.

    Typical American mercantilism. Look how many big companies spend time and money looking to curry favor with the seat of power- the ex-Goldman Sachs’ fraternity have settled throughout the federal government, Google’s Eric Schmidt role with the intelligence community, Warren Buffet, and his financial services investments that benefit from QE and the 08 bailouts, American insurance companies and their push to making the refusal to purchase their product against the law.

    How many pentagon officials regularly go from weapons procurement to working for the companies who sell those very same weapons or vice versa?

    There are so many examples. Whether its American lawyers in Texas who sue to have bankruptcy books removed from book stores or funeral companies in Louisiana who sued to prevent some local monks from building and selling caskets, the stench from mercantilism just continues to build.

  • Hank Broder July 9, 2015 on 3:35 pm

    I recently signed up to get a solar system installed on my house. It seemed like a “win-win”. Based on what the company proposed I would have produced enough electricity from the Sun to end up having the local electric utility paying me. BUT, I got a call from the Solar Energy company telling me they have to use fewer solar panels because of local permit laws. I “smell a rat” here. I think the utility is in league with the town to limit the competition from solar.