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> States didn't like how much money was flowing from their economies to Detroit, and by making direct consumer sales illegal they gave a lot of leverage to fran

by libria 12y ago

> States didn't like how much money was flowing from their economies to Detroit, and by making direct consumer sales illegal they gave a lot of leverage to franchises, which are local businesses. That seems to make sense. What's different about Palo Alto, CA that they're ok with money flowing directly there? Is it because dealerships have become unnecessary middlemen putting more $ on the cost before it reaches consumer hands?

rayiner 12y ago
Palo Alto isn't different.[1] Getting rid of these laws will cost NJ jobs, while making products slightly cheaper for everyone else. In a state like NJ, that's a tough pill to swallow no matter what. [1] In fact, I imagine lots of state legislators hate Palo Alto for making middle class jobs in their states obsolete while creating a few high paying jobs in California and diverting the difference to shareholders in New York. We're talking about a state hollowed out by deindustrialization, where the promise of better jobs to replace the ones lost was made decades ago, and still has yet to materialize.
- paddy_m 12y ago
  I don't know if you are advocating for a zero sum view of the economy, but you are definitely describing one. The thing about those middle class jobs that New Jersey is losing, is that they didn't need to exist. The only way they did was by stealing through coercion a little bit from people who chose to buy cars in New Jersey (mostly state residents).
  - rayiner 12y ago
    I'm not describing a zero-sum economy. It's possible that NJ suffers a net local loss, even if that's more than outweighed by a net benefit in NJ + CA. And even if NJ enjoys a net local benefit, you still have a bunch of people out of work in return for everyone paying slightly lower prices for cars. In a place like NJ, where unemployment is the #1, #2, and #3 concern, you can see why legislators would be gun-shy about getting rid of local protections in the name of economic idealism.
    - remarkEon 12y ago
      I'd probably suggest that if a direct-from-manufacturer store would open in NJ the people most likely to be able to find employment at such an establishment would be those who used to work at a dealership.
    - swatow 12y ago
      The standard arguments for free trade apply as much to individual states as to countries. Just as the US enjoys a net benefit from buying goods from China instead of making them, so does New Jersey enjoy a net gain from its residents buying California cars without any New Jersey middleman.
- brc 12y ago
  It's not just states that hate Palo Alto. Foreign governments the world over are chafing at the amounts of revenue that pour into Google and Apple and they don't get even the tiniest cut. A large economy will have consumers spending millions on google ads and iTunes content, and none of it will end up in the tax coffers of the local country. This is better off for everyone except for the politicians who want to throw money around. The eventual result will be make-work schemes like the local dealer franchises. Expect enforced-local entities in some countries where an office is created and people do meaningless work so the tax revenues can be domiciled. In other words, the exact same model as the car dealerships. It's bad but people hate being exposed to the market, because it systematically punishes laziness. Most people will vote for a politician to make it easier for them to be lazy, even if it ultimately makes them worse off.

by libria 12y ago

rayiner 12y ago

Palo Alto isn't different.[1] Getting rid of these laws will cost NJ jobs, while making products slightly cheaper for everyone else. In a state like NJ, that's a tough pill to swallow no matter what. [1] In fact, I imagine lots of state legislators hate Palo Alto for making middle class jobs in their states obsolete while creating a few high paying jobs in California and diverting the difference to shareholders in New York. We're talking about a state hollowed out by deindustrialization, where the promise of better jobs to replace the ones lost was made decades ago, and still has yet to materialize.

paddy_m 12y ago
I don't know if you are advocating for a zero sum view of the economy, but you are definitely describing one. The thing about those middle class jobs that New Jersey is losing, is that they didn't need to exist. The only way they did was by stealing through coercion a little bit from people who chose to buy cars in New Jersey (mostly state residents).
- rayiner 12y ago
  I'm not describing a zero-sum economy. It's possible that NJ suffers a net local loss, even if that's more than outweighed by a net benefit in NJ + CA. And even if NJ enjoys a net local benefit, you still have a bunch of people out of work in return for everyone paying slightly lower prices for cars. In a place like NJ, where unemployment is the #1, #2, and #3 concern, you can see why legislators would be gun-shy about getting rid of local protections in the name of economic idealism.
  - remarkEon 12y ago
    I'd probably suggest that if a direct-from-manufacturer store would open in NJ the people most likely to be able to find employment at such an establishment would be those who used to work at a dealership.
  - swatow 12y ago
    The standard arguments for free trade apply as much to individual states as to countries. Just as the US enjoys a net benefit from buying goods from China instead of making them, so does New Jersey enjoy a net gain from its residents buying California cars without any New Jersey middleman.
brc 12y ago
It's not just states that hate Palo Alto. Foreign governments the world over are chafing at the amounts of revenue that pour into Google and Apple and they don't get even the tiniest cut. A large economy will have consumers spending millions on google ads and iTunes content, and none of it will end up in the tax coffers of the local country. This is better off for everyone except for the politicians who want to throw money around. The eventual result will be make-work schemes like the local dealer franchises. Expect enforced-local entities in some countries where an office is created and people do meaningless work so the tax revenues can be domiciled. In other words, the exact same model as the car dealerships. It's bad but people hate being exposed to the market, because it systematically punishes laziness. Most people will vote for a politician to make it easier for them to be lazy, even if it ultimately makes them worse off.