Banning direct auto sales a backward idea

The bipartisan bill banning direct auto sales is a misguided and backward idea, the chair of the Durham and Orange County Libertarian Party said today in a letter to the Chapel Hill News.

“The threat technological advancements pose to job security has been used as justification for stifling advancements for centuries,” said Jason Melehani.

“Imagine all the jobs we could create if we banned electronic printing of books or banned computers from automating manufacturing processes.”

“These obviously are backwards ideas,” he said. “The ban on direct auto sales in SB 327 (Clarify Motor Vehicle Licensing Law) is backwards as well.”

Melehani is also an at-large member of the state Libertarian Party executive committee. He is a student in the combined MD/PhD program at UNC Chapel Hill School of Medicine.

Last week, the state Senate unanimously approved the bill which would ban direct auto sales to consumers by companies like Tesla Motors under the premise that it threatened the jobs of thousands who work at auto dealerships.

“I suspect the North Carolina Auto Dealership Association played a major role in bringing both parties together to pass this protectionist legislation,” Melehani said.

Melehani said that if enacted into law the bill will stifle innovation and hurt consumers by preventing competition and thus increasing cost.

“The NC Senate clearly lacks an understanding of opportunity costs,” he explained “When consumers are forced to pay more for a good, they ultimately can afford less of that good and others too.”

Melehani recounted a famous story told about noted economist Milton Friedman. When visiting China, Friedman reportedly saw thousands of workers digging a canal with shovels instead of tractors and excavators. His guides told him that this approach created more jobs. The Noble Prize winner retorted, “Then why not use spoons instead of shovels?”

“As Friedman pointed out, jobs are only as beneficial as the value they add to a process or product,” he said.