Ignorance of economics in hard times

The AP posted a story today that Oregon auto dealers wanted the state to prohibit car sales on Sunday. Huh?

The story (read it here) never really analyzed how this would help dealers. AP is not known for getting too far below the surface. But one may assume that the argument is that unless car dealers can cut costs, more of them will go out of business.

This is not economics, it is ignorance. Like the French imposing a 35 hour work week years ago to boost employment. It only seems like a good idea for about 10 minutes.

Basically the dealerships are saying that they want to cut labor costs. Which means that sales and service people will have less income, and therefore less money to spend. Which may do an individual dealership some good, but does nothing for the general population, which would have fewer options when to buy a car.

It is not the job of the state to introduce inefficiencies into the marketplace to support less productive dealers. If there are too many dealers to support the current level of sales, then the less efficient dealerships should close.

In the long run, this will lead to higher wages, more options for the buying public and a stronger industry.

There will be many such "emergency" measures proposed by various interest groups during these hard times. Most should be ignored. The state needs to provide a safety net so that the most disadvantaged can find new opportunities. But proping up failed business models is the wrong solution for the wrong problem.