Eagle Daily Investor

Christie and Tesla — A Freedom Problem

[Tesla Motors]

As an unapologetic advocate of capitalism and free markets, the thought of a politician blocking the sale of a legal product in any way, or for whatever reason, is an abhorrent concept. The idea is even more repugnant when that politician is being trumpeted by mainstream Republicans as a leading candidate for president.

New Jersey Governor Chris Christie recently sent a chill down the backs of free market, libertarian types such as me when he essentially took steps to block the sale of Tesla Motors (TSLA) luxury all-electric cars. The kerfuffle that’s now morphed into a war of words between Christie and Tesla CEO Elon Musk began last week when the state’s Motor Vehicle Commission unanimously passed new rules that limit Tesla’s direct sales business model.

The reasons given for the ruling are nearly laughable to freedom lovers, or to anyone who has ever bought a car from an auto dealership. The main hollow argument comes from the industry protection and lobbying group known as the New Jersey Coalition of Automobile Retailers (NJCAR). Group front man and NJCAR President Jim Appleton argued that Tesla’s direct-sales business model (which cuts out traditional auto dealers) is something that hurts the consumer.

Yes, the ability to choose to buy an automobile or any other good or service directly from the manufacturer and without a middleman is something that every customer knows is going to hurt them, right? I am being facetious here, of course, because the idea that you have to go through a special, government-approved channel just to buy a product is completely contrary to freedom. It is also something that reeks of cronyism and political favoritism.

So, it should come as no surprise to learn that the NJCAR is a big donor to Gov. Christie’s political machine. In fact, the NJCAR spent north of $150,000 on lobbying efforts last year. According to NJ.com, Gov. Christie has received a substantial portion (more than $60,000 in donations from dealerships) of that money.

In response to the New Jersey ruling, Tesla has accused the Christie administration of not acting in good faith to work with the company. In a blog post written by Musk, the self-assured Tesla chief also sharply criticized the ruling’s rationale in the following, and in my opinion harshly beautiful, statement:

“The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures ‘consumer protection’. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of ‘protection,’ this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.”

Ouch! — and bravo Mr. Musk!

In fact, I wish more CEOs had the gumption to speak their minds like this in the face of an obvious case of protecting an industry that makes a lot of political contributions. The more outspoken businessmen are, the more the public is likely to realize that self-proclaimed, anti-establishment politicians like Christie are actually impediments to freedom, not proponents of liberty.

In fact, the Christie case is even sadder than most — for the simple reason that I expect a liberal Democrat to always look to restrict freedom. It is in his philosophic DNA. What I don’t expect to find is that same DNA in someone who wants to be the leader of the GOP.

Gov. Christie, you have a freedom problem.
Jim Woods is Editor-at-Large of TheWealthShield.com. You can follow him on Twitter: @Woodsish.

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About Jim Woods

Jim Woods has covered the economy and stocks for nearly two decades. His varied experience as a financial journalist, stockbroker and money manager provides him with unique insights into the complex world of investing. He is the co-author of “Billion Dollar Green: Profit from the Eco Revolution.” Jim is a frequent contributor to numerous investing sites, including Traders Reserve, Main Street Investor, Investorplace, StreetAuthority, TradingAuthority and Marketwatch. Jim holds a B.A. in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his horse ranch in Southern California. Follow Jim on Twitter: @Woodsish.

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