No Cash for Clunkers is an Overwhelming “Success!”

Friday, July 31, 2009
Posted in category The Planned Economy

This morning I reported that the government’s ‘Cash for Clunkers’ program ran out of cash, meaning that people had to keep their clunkers and give up the cash. Congress just voted to refill the ‘Cash for Clunkers’ trough. The Wall Street Journal just reported:

The House voted 316-109 to approve the transfer of $2 billion in emergency funding from the $787 billion economic-stimulus plan to the “Cash for Clunkers” program, ensuring it has sufficient funds to continue. The Senate won’t consider an extension until next week. At a news conference Friday afternoon, President Obama praised lawmakers for moving quickly to rescue the popular program, which he said has succeeded beyond expectations.

The move follows a scramble Thursday after news emerged that the initial $1 billion in funding may have been close to exhausted after just one week. The National Auto Dealers Association said it was given “specific assurances” by the Obama administration that all deals secured on Friday will be honored, though the NADA’s chairman reiterated concerns that some dealers might not be reimbursed for rebates extended to customer.

It seems that Congress is stealing stolen money from some energy programs to honor its clunker promises, so now House Chief Nancy Pelosi is concerned about how they will steal additional money to reimburse the stolen money from the energy program. Let the steal-o-rama begin.

For those new to libertarian ideas, notice the multitude of comments in this story regarding the “success” of a failed, centrally-planned policy that needed emergency funding to keep its failure successful. Whereas businesses within the free market gauge success and failure through the means of profit and loss, here’s how a government determines success.

“Both sides of the aisle, people acknowledge the effectiveness of this initiative,” Ms. Pelosi said on the House floor, adding that early evidence showed that the program was exceeding its environmental targets.

How is this “effectiveness” quantified? “Exceeding” its environmental targets? How is that determined? There’s more…

…In a letter to Transportation Secretary Ray LaHood, Sens. Susan Collins (R., Maine) and Dianne Feinstein (D., Calif.) asked for a slew of data about the initial program.

“The tremendous number of sales in the first week of this program demonstrates that the ‘cash for clunkers’ act has succeeded in increasing new vehicle sales, but Congress needs this data in order to determine if the fleet modernization program delivered significant fuel economy gains and oil savings,” the lawmakers said in the letter to Mr. LaHood.

So if Lew Rockwell engaged the mafia to help him steal a load of Toyotas coming off of the docks, and gave one Toyota away to every consumer who agreed to give up Huffington Post for LewRockwell.com, that would be a success! If he ran out of Toyotas in the first week or on the first day, he could just get the boys together and steal more. Now here’s another happy, happy “success” story:

AutoNation Inc., the country’s largest chain of car dealerships, said Friday that it has sold more than 3,000 vehicles in the past week through the program.

“It’s been a huge success,” Chairman and Chief Executive Michael J. Jackson said in a brief interview. “I think there has been a psychological effect and gotten consumers to start buying cars again.”

I’m sure that any government-subsidized program that increases your company’s sagging sales and brings in easy revenues must be a “success!” If this whole blog post you just read sounded like a Larry, Curly, and Moe skit, you read it right.

Be Sociable, Share!
You can leave a response, or trackback from your own site.

9 Responses to No Cash for Clunkers is an Overwhelming “Success!”

  1. Mark Aster says:

    July 31st, 2009 at 6:42 pm

    As always, I love your commentary. I’m always amazed that members of Congress never seem to understand the basic economic proposition that when you subsidize an activity or behavior, you’ll get an increase in that same behavior or activity; just ask welfare moms and TARP bankers. How could they not foresee the program running out of cash so soon?

    Generally, as I see it, people who own “clunkers” fall into different categories. First, there are collectors, who will not part with their “archaic, polluting” vehicles because of their antique value. Collectors won’t be cashing in. Secondly, there are the “Dave Ramsey types” who are smart enough to hold on to their jalopies because the car is still functional and the owner can avoid the unnecessary debt of a car payment. The “Dave Ramsey” types also will not be cashing in. Then, there are the people who may have been saving for a new car and this subsidy program did not inspire an unplanned purchase but only sped up an inevitable transaction. I suspect that these were the majority of Clunker-traders this week and, despite what Obama terms the program’s “great, initial success,” we will eventually see a fall-off in sales.

    Finally, there are people who were holding on to clunkers because they couldn’t afford, or didn’t possess sufficient credit to buy or finance a new car in the first place. If people with low income or bad credit are getting in on the Clunker Craze, they are doing so through sub-prime, high interest financing, and will probably have the vehicles repossessed in short order due to the vagaries of our “jobless recovery.” As a bankruptcy professional, I jokingly refer to this aspect of “Cash for Clunkers” as the “The 2009 Future Repossessed Automobiles of America Act.” I’ve yet to see evidence where banks have loosened credit for the generally non-creditworthy, just for the sake of helping to finance purchases under a government program. It hasn’t happened under the mortgage remodification program, so why would it happen with cars?

    As to your BET problem and theirs, I guess I qualify as an Official African-American Reader of The White Blogger. Believe me, any black person with an I.Q. that has more than two digits shuns BET, so I wouldn’t give their self-righteous racial indignation a second thought.
    Actually, “The White Blogger” sounds like the title for a lousy network sitcom. Is Ken Howard still acting? (LOL)

  2. Not Sure says:

    July 31st, 2009 at 8:58 pm

    The government was successful at giving away money? How could they *not* be?
    Seems a rather low bar to set as a mark of success, if you ask me.

  3. clark says:

    July 31st, 2009 at 9:34 pm

    This means my local dealership does Not have to take down the huge crane that has an older 1980’s pickup truck dangling in the air like bait with the huge numbers $4500 painted on the side.

    When that money runs out again, do you think they will raise the amount? My idiot fellow citizens love this program, and are rushing to get in on it, even after it’s pointed out that the money comes from our pockets to theirs.

    To those idiots, if the government gave $25,000 for the clunkers they would love it and still not see it as Socialism or some such variety.

    I used to envision office workers as smart. Now I will forever after see most of them as one of The Three Stooges.

  4. Robin says:

    August 1st, 2009 at 12:30 am

    Actually, Karen, “Cash For Clunkers” might be a success as a nasty little domestic spying operation. Anyone who visits the official web site, and carelessly clicks the “I Agree” button, consents to let the Feds take over and download the contents of his computer. Clever way to get around the 4th Amendment search and seizure restrictions, huh? Check out this Glenn Beck report: http://www.youtube.com/watch?v=bWs12ccbOiE

  5. Robin says:

    August 1st, 2009 at 12:39 am

    Correction. The libertarian blog Holy Cause (see http://theholycause.blogspot.com/2009/08/your-computer-is-considered-federal.html) has researched this and discovered that only the dealer login has this snooping feature, and that it’s not on any consumer sites. In principle it’s just as tyrannical.

  6. Karen De Coster says:

    August 1st, 2009 at 6:47 am

    Mark, BET can’t be worse than MTV, can it? Funny, I used to love The White Shadow TV show. I noticed it’s out on DVD now.

  7. QOTD « Paul Stagg says:

    August 2nd, 2009 at 12:06 pm

    [...] De Coster, a fantastic writer/blogger.  In a post on the “cash for clunkers” program, she writes: For those new to libertarian ideas, notice the multitude of comments in this story regarding the [...]

  8. Private Fleet Australia says:

    September 15th, 2009 at 2:23 am

    Will be very interesting indeed to see how the auto industry in US holds up now that the Cash for clunkers program has ended. Australians will be watching very closely.

  9. Odell Goracke says:

    March 21st, 2012 at 12:16 am

    Usually I don’t learn post on blogs, however I wish to say that this write-up very forced me to take a look at and do it! Your writing style has been surprised me. Thanks, quite nice article. Best Escorts, 8, 31 Maddox Street, London, W1S 2PB, 020 3011 2418

Leave a Reply