When Consumer Protection Becomes Commercial Protectionism

I guess our state government really isn’t as interested in growing the Iowa economy as we thought.

Thursday, the Des Moines Register reported that the Iowa DOT shut down test drives by Tesla in West Des Moines.  Two reasons were given for the overt stage-hooking, and both objections are based on Tesla’s noncompliance with our monolithic and obsolete regulatory code: They are not a “registered” car dealer with the state, and Iowa law prohibits carmakers from selling directly to the public.

Essentially, Tesla hasn’t yet paid homage to the almighty state government.

For a state that talks so much about economic growth and practically obsesses over clean energy, we sure have a funny way of showing hospitality to our clean, green friends at Tesla Motors.   The unprecedented hostility is a slap in the face to the citizens of Iowa, who deserve the option of buying from this innovative leader in the electric car industry.

When did we stop believing in American business?  When did we stop believing in American consumers?  Most importantly, when did we decide that every voluntary transaction requires a permit, a registration, a fee, a fine, and a license?

Tesla’s business model is unique, not only technologically, but in terms of sales and marketing.  They don’t sell through dealerships, preferring to sell their cars online and through their own small network of outlet stores.  Their success with this sales model has engendered a war with traditional car manufacturers and dealers, who have spent years influencing state governments to engage in a kind of de facto protectionism by using regulatory dinosaurs like the aforementioned to handcuff any competition that might arise.

Or, in this case, has already arisen.

Having worked as a homebuilder for almost a decade, one of the first things I learned in my dealings with government is that “consumer protection” measures are a giant scam through which government covers for businesses who don’t want competition.  I have watched as building inspectors walked in to inspect framing, electrical, plumbing, and mechanical work, stopped to chat with the General Contractor, glanced around for less than a minute, and then left without inspecting anything but the bottom of their coffee mug.  As long as the fees are paid and the license secured, nobody cares about quality.  In the end, all the consumer is protected against are innovative (pronounced “unapproved”) solutions and low (pronounced “unfair”) prices.

Taxes, fees, and risks that large companies can afford, drive smaller ones out of business.  And that’s exactly why big business is pro-regulation, from banks to car manufacturers to drug companies.  Regulations sustain the growth of government by allowing it to harpoon growing businesses and feed off of the revenue generated by their success;  even as it protects old – and sometimes dying – businesses by forcing competitors to contort their business plans in order to run through the regulatory maze set out by the state.

Iowa government is forcing Tesla into an obsolete mold, and holding Iowa consumers hostage by disallowing in-state test drives.

As consumers, we have a right to pursue the types of products and services that best suit us.  We have a right to buy fresh organic vegetables and raw, unpasteurized milk. We have a right to purchase products online without the threat of an internet tax being imposed.  And we have a right to test drive and buy whatever car we want – including cutting edge alternate energy cars that might threaten Iowa’s sacrosanct ethanol and biodiesel industries.

It’s time that government gets these absurd and abusive regulations out of the way: not of big business or small business, but all business.

It’s time that our state government starts taking consumer choice as seriously as we do.





Joel Kurtinitis is the Outreach Director for Liberty Iowa.  A former member of the State Central Committee of the Republican Party of Iowa, Joel is also a regular contributor to Liberty Conservatives and the Steve Deace website.  Joel and his wife live in Perry, Iowa.

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  1. Pingback: Dear Oatmeal, Net Neutrality Just Isn’t Fair | Joel Kurtinitis

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