Texas is a “Free Market” State, Right? No, Not Really.

June 09, 2017 By: El Jefe Category: Holy Crap

All of our glorified politicians and Chamber of Commerce representatives continually crow about Texas being a “free market” state with a “light touch” when it comes to regulations.  But is that really true?  Actually, no.  It’s only free market for those who pay for it.  To wit:

  • You can’t buy a Tesla directly from the company in Texas.  You have to buy it online and have it delivered from California.  Bills to allow direct sales have died 3 times since 2013, killed by big money from the powerful auto dealers lobby to protect their own dealer franchises.
  • Under the same Byzantine laws promoted by Texas auto dealers, Warren Buffett was prevented from keeping his chain of auto dealers in Texas because his company happens to also own an RV manufacturing company in Indiana. Buffett tried to fix the problem, but Teabaggers shut him down and the bill never made it to the floor.  In Texas, manufacturers cannot sell cars.  I know, weird, right?
  • You can’t buy wine online in Texas like you can in most other states.  The powerful liquor lobby controls the governor’s mansion and both houses in the legislature, and has had enacted more Byzantine laws that are inconsistently applied.  These laws treat beer, distilled spirits, and wine differently, with complicated permitting requirements.  A national online distributor, Wines Til Sold Out, recently received a cease and desist letter from the State of Texas and has shut down sales to the state.  Texas consumers lose again.
  • This year, the powerful beer distributor lobby, which has doled out over $11 million to Texas elected officials (Greg Abbott got $1.4 million, and Dan Patrick got $688,000), got a roll back of the beer law passed in 2013 which encouraged small craft brewers to invest in Texas by lifting insanely low limits on how much beer can be made by small brewers and allowing in-brewery sales directly to customers.  That law was so successful that small brewers increased by 3 fold since 2011 drawing the ire of the beer distributors who don’t like competition.  They hate it so much that they got a new law passed this year that limits the size of brewers who can sell directly in their own taprooms.  The limit is a production size of 225,000 barrels in all of their facilities regardless of whether those facilities are actually in Texas.  This shuts down craft beer company Oskar Blues of Colorado, who just spent millions opening a new brewery and tap room in Austin, and also affects Deep Ellum Brewing which is near the 225,000 barrel limit and has already announced that, because of this law, it will now seek to invest in other more friendly states.  Oh, and BTW, mega brewers like Anheuser Busch, Heineken, and Miller-Coors were all given carve outs to the size requirement.  I’m shocked, just shocked, I tell you.  Well, not really.  Oh, and for reference, Anheuser Busch produces about 125 million barrels a year.
  • But it gets worse…In this same law, small craft brewers must pay a per barrel fee to local beer distributors for beer they sell in their own facilities and that is never actually touched by the distributor.  That’s right, folks, the Great State of Texas is so “free market” that it has made a law that allows huge multi-billion dollar distributing companies to freely extort money from small brewers for the privilege for selling their own beer in their own taprooms.  You’re welcome.  This bill is on Abbott’s desk, and if he doesn’t veto it, will become law on June 18th.  With $1.4 million of beer lobby money in his pocket, what do you predict he’ll do?

By now, most of those paying attention know that Texas is not a “free market” state, not in the slightest.  It has been turned into a corrupt banana republic that benefits the wealthy and powerful while trampling on the small businesses all over the state it claims to promote.  But the really weird thing?  Those same business people and consumers who are hurt by this corruption are the very people who support and vote for those who participate in it on a daily basis.

You can only draw one conclusion from these clear facts – voters in Texas are stupid.