Tesla ban quote of the day

Usually we think of politicians on the left as being the major proponents of protectionist policies. But Snyder is a Republican, as are the governors of almost all the states that have barred Tesla’s entry (Maryland’s Martin O’Malley is the only Democrat in the bunch). In other contexts, Snyder contends that he is against burdensome regulations that thwart competition and hinder growth. What’s different about the auto industry? Well, auto dealerships donate overwhelmingly to Republicans; perhaps these Republican governors are not so much pro-business as they are pro-businesses-that-fund-their-campaigns.

Indeed, prominent Republican politicians have a long history of enshrining protectionist laws that help auto dealers. In 1973, Republican hero Ronald Reagan, then the governor of California, signed a law that barred new-car dealerships from opening within a 10-mile radius of an existing dealership peddling the same kind of car, according to Mother Jones, to reward a businessman who was one of Reagan’s top fundraisers. Decades later George W. Bush, as governor of Texas, signed what was then the nation’s strictest law prohibiting car manufacturers from selling directly to consumers, at a time when the Internet finally made such transactions more feasible. Texas’s law was subsequently copied by other states around the country and used to shut down Ford’s own attempt to sell used cars to consumers through its Web site. Ford fought the law and ultimately lost.

Yes, that’s right: The big auto incumbents have tried to engage in their own direct-to-consumer sales before, even though many are now throwing their weight behind the recent spate of legislation that bars such activity.

– Catherine Rampell, writing in the Washington Post.

Townhall: Anti-Tesla bill bad for Michigan

Townhall.com, a relatively conservative publication, is now dissing Governor Rick Snyder for caving in to the auto dealer lobby.

Excerpt:

The original focus of House Bill 5606 was on determining how franchise-dealership fees are charged. Then, right before the vote, an amendment banning automobile sales directly to consumers was added by State Senator Joe Hune. This backhanded maneuver shielded the amendment from public comment and debate.

Passed unanimously in the State Senate and with only one dissenting vote in the House, the “anti-Tesla bill” is an economic loss for Michigan. The state will miss out on tax revenue from sales of expensive Teslas (which can sell for over $100,000), but the negative consequences extend much further and speak to the widespread problem of special interests controlling politicians.

* * *

Governor Snyder has received more than $175,000 this election cycle from automotive companies. Is it any wonder that General Motors and Ford both said in statements that they “applaud” Governor Snyder’s decision. The Michigan Auto Dealers Association has been a long-time backer of Hune, and his wife is a lobbyist for auto dealers. While Snyder is calling for the legislature to eventually debate the merits of requiring automobile sales through dealers, if the results of the vote on HB 5606 are any indication, the Big Three and Michigan dealers have no reason to worry—they already have the legislature in their pockets.

The influence of these groups extends far beyond Michigan. The National Auto Dealers Association has spent $2 million on federal candidates during the current cycle. General Motors, Ford Motor Company, and Chrysler have spent acombined $34 million on federal lobbying and political contributions in the 2014 election cycle. Alternatively, Tesla has only spent $8,600.

* * *

The dealership model does have some benefits, such as flexible prices based on low financing rates. Dealerships also offer places for customers to service their vehicles. However, if dealerships benefit customers, why is it necessary to ban other manufacturers from using direct sales? If all consumers were truly benefitting, there would be no need to force everyone to shop at dealerships.

Wall Street Journal calls out Rick Snyder

In an op-ed yesterday (pay wall), the Wall Street Journal called out Rick Snyder for “embracing the car dealer cartel.”

Excerpt:

Republican Michigan Governor Rick Snyder ’s re-election race against Democrat Mark Schauer is close, so naturally Mr. Synder is throwing his principles over the side.

How else to explain Governor Snyder’s signing Tuesday of a bill that effectively shuts out Tesla Motors from selling cars directly to consumers in Michigan? Restraint of trade and suppression of competition are now protected by law in Michigan.

* * *

General Motors [in 2009] filed for Chapter 11 bankruptcy. So it is no surprise to see that early Tuesday morning General Motors urged Governor Snyder to sign the auto-dealer protection bill, which he did.

Mr. Snyder and his GOP legislature may think this act of inbred protectionism two weeks before the election will guarantee their re-election. But doing this deal makes it more likely that a second Snyder term will consist of a return to the state’s low-growth status quo. It is the sort of flip-flop that breeds cynicism among Republican conservatives about the political leadership of their own party.

* * *

Direct sale of cars to buyers, whether by Tesla or more established manufacturers, gives consumers more choice and more control over how much they want to pay for a new vehicle. It creates downward pressure on prices, leaving more money in the car-buying public’s pockets. The dealer status quo, protected Tuesday by Governor Snyder and General Motors, does the opposite. It benefits some at the expense of everyone else.

Your (Michigan) tax dollars at work

Last week, I sent a message to Rick Snyder regarding the anti-tesla legislation that was passed by the legislature. I asked for a response. And today I got one.

Here is the text of the email I sent, for those that missed it:

Honorable Rick Snyder:

I am appalled that the Michigan legislature has approved a bill (HB 5606 and specifically Section 14(3) thereof) that would ban auto manufacturers, including Tesla, from making direct sales of its vehicles in the state. I am especially shocked to see the Republican party standing in the way of the free exercise of business sales by a modern company like Tesla, which is producing incredibly good and novel vehicles. This is an automobile state and stopping direct sales is an affront to the history of automotive innovation in Michigan.

It seems to me that the legislature is beholden to the Michigan Automobile Dealers Association and the large amount of contributions made by that group. There is simply no reason to prohibit legitimate automobile sales by any manufacturer.

I will also point out that your administration approved “right to work” legislation in this state. How about supporting a right to sell legitimate products in this state free from governmental interference? Surely, as “one tough nerd” you understand the need for all American businesses to be free to innovate and sell products that meet customer demands.

I highly recommend that you or one of your staffers carefully review this report prepared by the Daniel A. Crane, Associate Dean for Faculty and Research and Frederick Paul Furth, Sr., Professor of Law, University of Michigan regarding the undue influence of the car dealers:

http://repository.law.umich.edu/cgi/viewcontent.cgi?article=1211&context=law_econ_current

I would be most interested in what you intend to do with regard to this bill. I would particularly like to know your position before election day.

Brant Freer
Troy, MI 48098

Here is the response from the governor’s office:

Dear Brant Freer,

Thank you for your recent correspondence sent to Governor Rick Snyder. I have been assigned to your correspondence and am responding accordingly on behalf of the Governor. Governor Snyder has a strong vision to create opportunities, networks, programs, and environments across Michigan that will both retain and attract great talent to our great state. It appears you have much to offer and I hope your pursuit for Michigan employment is successful. All civil service employment opportunities are regularly updated at Michigan’s Career Center website of www.michigan.gov/mcsc. Please submit your online applications for the job opportunities most suitable for your chosen career path.

Thousands of other jobs are also available at our job portal website: http://www.mitalent.org.

Again, thank you for your recent correspondence. Should you have any further questions or concerns regarding this or any other state-related matter, please do not hesitate to contact me directly.

Sincerely,

Ryan Studley
Constituent Relations Division
Executive Office of the Governor, Rick Snyder
517.335.7858 (o)

Is it just me, or is this response totally and fully off-point to my original comments? I felt compelled to reply to this response as follows:

Are you kidding me? Nowhere in my email to the Governor did I mention seeking civil service employment. Do you understand English as a language? I certainly would never work in a Snyder administration. But your response is so funny I will post it on my blog.

Of course, by now we all know that the Governor’s failure to veto the anti-Tesla legislation brought out a torrent of complaints about his action. This will continue and, given his failure to veto a very anti-competition bill, please be so kind to tell the Governor I know exactly how I intend to vote and I will press my friends to do that same.

Very truly yours,

Brant Freer

Surveillance self-defense

The EFF has just released a compendium of products than can help you defend your computer systems and communications from the surveillance state. It is called Surveillance Self-Defense. It offers advice for people in differing scenarios.  I am planning to implement the recommendations in the section entitled “Mac User?”.

Well worth a careful review.

Halloween and the 1%

The following is probably the best take on the smug selfish life of the 1% in this country.  It is from the Dear Prudence column on Slate.

Dear Prudence,
I live in one of the wealthiest neighborhoods in the country, but on one of the more “modest” streets—mostly doctors and lawyers and family business owners. (A few blocks away are billionaires, families with famous last names, media moguls, etc.) I have noticed that on Halloween, what seems like 75 percent of the trick-or-treaters are clearly not from this neighborhood. Kids arrive in overflowing cars from less fortunate areas. I feel this is inappropriate. Halloween isn’t a social service or a charity in which I have to buy candy for less fortunate children. Obviously this makes me feel like a terrible person, because what’s the big deal about making less fortunate kids happy on a holiday? But it just bugs me, because we already pay more than enough taxes toward actual social services. Should Halloween be a neighborhood activity, or is it legitimately a free-for-all in which people hunt down the best candy grounds for their kids?

—Halloween for the 99 Percent

Dear 99,
In the urban neighborhood where I used to live, families who were not from the immediate area would come in fairly large groups to trick-or-treat on our streets, which were safe, well-lit, and full of people overstocked with candy. It was delightful to see the little mermaids, spider-men, ghosts, and the occasional axe murderer excitedly run up and down our front steps, having the time of their lives. So we’d spend an extra $20 to make sure we had enough candy for kids who weren’t as fortunate as ours. There you are, 99, on the impoverished side of Greenwich or Beverly Hills, with the other struggling lawyers, doctors, and business owners. Your whine makes me kind of wish that people from the actual poor side of town come this year not with scary costumes but with real pitchforks. Stop being callous and miserly and go to Costco, you cheapskate, and get enough candy to fill the bags of the kids who come one day a year to marvel at how the 1 percent live.

—Prudie

What a perfect response. I particularly am appalled by the “we already pay more than enough taxes toward actual social services” complaint. As if taxes are all that is needed to help those down and out.

Conflicts of interest at the NSA

Who could have possibly thought that NSA employees, at high levels in the agency, would be involved in obvious conflicts of interest?  Well, BuzzFeed News is reporting that Teresa Shea, a high level employee, is leaving the agency as a result of financial interests and conflicts between her and her husband and the NSA.

Excerpt:

Shea was the director of signals intelligence, or SIGINT, which involves intercepting and decoding electronic communications via phones, email, chat, Skype, and radio. It’s widely considered the most important mission of the NSA, and includes some of the most controversial programs disclosed by former contractor Edward Snowden, including the mass domestic surveillance program.

It couldn’t be determined why Shea is leaving her position or what new job she might take. Neither the Sheas nor the NSA responded immediately to requests for comment.

In September, BuzzFeed News reported that a SIGINT “contracting and consulting” company was registered at Shea’s house, even while she was the SIGINT director at NSA. The resident agent of the company, Telic Networks, was listed as James Shea, her husband.

Mr. Shea is also the vice president of a major SIGINT contractor that appears to do business with the NSA. The company, DRS Signals Solutions, is a subsidiary of DRS Technologies, which itself is a subsidiary of Italian-owned Finmeccanica SPA.

Last week Buzzfeed News also reported Shea herself had incorporated an “office and electronics” business at her house, and that the company owned a six-seat airplane and a condominium in the resort town of Hilton Head, South Carolina.

 

Putting numbers to the surveillance state

This is amazing (and more than a little creepy). According to an article in the Wall Street Journal:

Over the past 20 years, prompted by changing police tactics and a zero-tolerance attitude toward small crimes, authorities have made more than a quarter of a billion arrests, the Federal Bureau of Investigation estimates. Nearly one out of every three American adults are on file in the FBI’s master criminal database.

This is outrageous. And remember, this is only the files maintained by the FBI. There is seemingly no way to get such files purged at any point in time.

 

Who gains from Snyder’s signature

The big winners are car dealers, of course. And the big loser is the purchasing public.

Check out this article from Vox, written by Timothy B Lee.

Excerpt:

The main supporters of these laws are auto dealerships themselves. According to the Wall Street Journal, “dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees.” This argument doesn’t make much sense. Lower prices might be bad news for independent franchisees, but they’re a good thing from the consumer’s perspective.

But despite their weak policy arguments, auto dealerships have a lot of clout with state legislators. People who own auto dealerships tend to be pretty affluent, so they can afford to make generous campaign contributions. And dealerships are spread out around a state, allowing dealers’ groups to organize a potent state-wide lobbying campaign. The result: the Michigan legislature overwhelmingly approved the protectionist legislation.

As economists at the Federal Trade Commission have written, the ban on direct auto sales is “an anomaly in the broader economy, where most manufacturers compete to respond to consumer needs by choosing from among direct sales to consumers, reliance on independent dealers, or some combination of the two.” But auto dealerships are using their clout to force consumers in Michigan and other states to pay inflated prices to get cars through them.

Decision day for Rick Snyder: Snyder signs bill banning Tesla sales in Michigan

Here is Snyder’s statement regarding the bill:


 


 


 


 


Interesting quote from Rick Snyder, as quoted in the Detroit News:

Snyder sidestepped a question about whether it should be illegal for Tesla to sell its cars directly to Michigan buyers without dealerships.

“That’s a separate legislative question,” Snyder said. “That’s something that should be a different discussion that could be a legislative priority either in (the) lame duck (legislative session following next month’s election) or after that.”

 

GM admits electric Cadillac is no competition to Tesla Model S:


 


 


 


 


 


 

Tesla quote of the day 2

The forces aligned against disruptive ways of satisfying consumer demand have gotten, in the space of a couple days, an amendment into a bill that passed both houses and is sitting on the governor’s desk. The amendment prohibits Tesla — in the largest state in which company doesn’t yet have a sales office — from selling directly to its prospective customers. The company has said it had been discussing an approach to sales in Michigan with political leaders in the legislature and appropriate government agencies, until the amendment was adopted and voted on with great alacrity by the General Assembly.

There was never any public debate, and news reports suggest that most members of the legislature were unaware of the impact until the auto dealers started thanking them for their votes. That is, for voting to protect Michigan customers from having more choices about what to drive.

We’ve seen a lot of this lately. It’s just plain bad faith by lawmaking bodies to not at least host some discussion on a law that puts a death sentence on what appears to be a perfectly reasonable business model. If signed by Gov. Rick Snyder, sales of a shiny new consumer product will be impossible in Michigan unless the company decides to sell through traditional dealerships. It is difficult not to notice that these middlemen are third parties that are very active politically, in what was supposed to be a pretty close election for governor this time.

Alan Smith at R Street.

Your NSA: putting the dumb in freedom