When the Boston Globe says that Cash for Clunkers was a waste of time and money, then you know it was a bad idea. Their lone wolf conservative columnist wrote a month earlier in a fake Q&A style how it was a bad idea. Of course, no paper has bothered detailed analysis of the true cost of these giveaway programs, but Calculated Risk tackled it. I was against this for many reasons:
1. It doesn't improve fleet auto mileage and CO2 issues much (400K trade ins in a nation of 250 mil passenger vehicles (0.16% of total fleet)).
2. It favors one industry over the many many manufacturing industries crushed in this recession. (Where is the cash for clunkers airplane edition???)
3. It subsidized autopurchases so people could finance autos without going the full 100%.
4. It added a few billion to the national debt that we do not need.
5. Top models purchased were made outside of the US or benefited foreign companies. I noticed no GM or Chrsyler cars on that top 10 list. Guess moving production offshore for years and ceding marketshare in the small car market backfired. As an "owner" of those companies, I am steamed!
6. It destroyed thousands of vehicles from the used car market that middle & lower class Americans would purchase. My 1st car was a 1991 Honda Accord in 1997. I got rid of it in 2005.
7. It iss a one shot sugar high stimulus to buying that sucks out future demand from the next few months. Wait for Sept-Oct car purchase numbers.
(Photo note: let's pray that we don't have wandering bands of jobless men.)
During the 2008 campaign, we heard about fairness or what is fair from then candidate Obama often (Clinton as well). This C4C program only benefits car manufacturers, dealers and their suppliers. Is that fair to the many steel & plastic product manufacturers not aligned with the auto industry hurt by foreign imports with no "special protection"? What about tool bit makers & ball bearing manufacturers? Is it fair to auto supplies stores that specialize in helping Americans get more years out of their vehicles? Add in distribution companies for non-auto industries, and it is staggering how Congress-WH threw billions on a one shot car deal that benefitted Japanese & Korean companies more than US companies!!! I won't touch how zombie Bank and specific insurance company TARP bailouts have screwed competitors. This kind of knee jerk short term policy making was tried before and failed.