TCS Daily


Punishing Popularity

By C. C. Kraemer - March 24, 2004 12:00 AM

State regulators are suing Nissan in New Jersey over the intensely bright xenon headlamps that come as equipment on some of the car maker's Maxima models. But not because they don't work properly. And not because they pose a safety hazard.

No, the New Jersey regulators have gone beyond that sort of routine legal hectoring of private industry. They're suing because the headlamps are wildly popular -- and not just with car buyers but with thieves.

One might think the New Jersey government would be providing a better service for the taxpayer dollars that it rakes in if it were to go hard after the thieves. But they're not necessarily easy targets. It often takes a lot of effort to find them.

A big multinational firm, though, just sits there, a large, immobile and inviting mark for the self-appointed protectors of the citizenry. So the regulators in New Jersey sue Nissan because it was allegedly aware that thieves are able to swipe the headlamps in about 90 seconds -- much longer than the proverbial New York Minute of time lapse across the Hudson River -- and make a quick buck, or as many as $250 of them, on the car parts aftermarket and did nothing about it.

"We allege the company sold cars with these fancy lights but kept consumers in the dark about how attractive the headlamps were to thieves," said Reni Erdos, director of the New Jersey Division of Consumer Affairs.

If Erdos was trying to be clever talking about "consumers in the dark," he should have saved his mental gymnastics to think about what the long-term effects of this suit might be. But that may have made him and his colleagues even more hostile to Nissan because there is one outcome so ugly that only a regulator could love it.

Companies are usually concerned about making their products good enough for the market. But here is an instance when a business is being punished for succeeding. The xenon bulb-powered headlamps emit a bluish beam that is roughly three times brighter than the halogen bulbs found in most cars. Some journalists are reporting that the light is closer to that of natural sunlight than other headlights and therefore provides another layer of safety.

The sad part is that attacks on success are not unheard of. Wal-Mart, for instance, is being punished in California because of its success. If it were some badly managed business, a sad sack unionized company that was about to go under -- or a passenger rail system that can do nothing but lose money -- governments would go to extreme lengths, including redistributing the wealth of others, to bail it out. It would be a way for caring lawmakers, thoughtful bureaucrats and self-less community "leaders" to express their magnanimous compassion.

Wal-Mart is a well-run company, though, the largest retailer in the world, that has succeeded by offering customers lower prices than they can get elsewhere. But it has small-town roots, hokey advertising and caters to tastes that elitists are offended by. It's also a non-union shop. So the social engineers in communities across California have made efforts to ban Wal-Marts, specifically the Wal-Mart Supercenters that sell groceries. Can't have Wal-Mart competing with the unionized supermarket chains that charge higher prices or peddling its discount goods. That would be bad for the community.

Achievement is also attacked in the courtrooms of America, where antitrust lawyers and regulators beat down any company or visionary that got too big for his britches and became a visible success. Think about Microsoft and Bill Gates. That company owns a large chunk of market share because it's made a product that is in high demand and is sold at a low price. The federal government can sue Microsoft, the European Commission can call it an "abusive monopolist," and all the people who talk about fairness and justice can wring their hands and wear expressions of deep concern in public, but the software maker's only real crime was growing too large from its success.

Dig back a little further in history and there looms the story of IBM, hounded by antitrusters for so hard and so long that the company fell out of its place of dominance in the market and lost its innovative edge because it was busy fending off lawyers and regulators.

Which brings us back to innovation and this silly suit in New Jersey. If it isn't profitable, if it is in fact costly, to create new ideas and bring them to market, car makers won't be so eager to do things that improve safety, performance and comfort. If the regulators convince the court to go their way, maybe the future of cars is the past. Remember those Trabants made in East Germany before the reunification that were notoriously slow, dangerous and primitively equipped? There might be a place for them again.

C.C. Kraemer recently wrote for TCS about apocalyptic claims.


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