I really believe that President Obama had the very best of intentions for the Cash for Clunkers program. I don’t doubt the President believed Clunkers would boost sales for troubled automakers, get some polluting cars off the road, and help struggling families replace bad automobiles. Good intentions, all.
It is just that belief in the President’s sincerity that causes me to agree totally and completely with a recent Wall Street Journal editorial calling Clunkers, “One of Washington’s all-time dumb ideas.” The Journal justifies this harsh statement with simple analytics; “Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%.”
Critics predicted Clunkers would be a very expensive means of moving future sales forward. Last week’s data is evidence that this is exactly what has happened. To make matters worse, Clunkers cost more than the $3 billion spent by Congress. The bureaucratic complexities led to delays in dealer payments, or what amounts to dealers being forced into financing the program.
The cost of the Clunkers program could be worth every penny if Americans learn from its failures. To many Americans, the grass appears to be greener under economies with extensive government control. Overarching government management reduces the number of economic losers by enforcing fairness on that imagined greener side, or so the vision goes. The Clunkers program should end this kind of thinking.
Legislation like Cash for Clunkers is created by legislators – politicians whose first goal is to get reelected. Unfortunately, when politicians are involved, the winners and the losers are determined by horse trading and campaign contributions, not by earning the right to something, or even having a need for that something. In the case of Clunkers, the legislation was written to placate autoworkers and keep the environmentalists’ support, all in one neat little act. The President and Congress spent $3 billion of our tax dollars manipulating a few voter segments into thinking the government was helping them.
Capitalism is certainly a faulty system. Therefore, it is very tempting to want government, in its perceived benevolence, to make things safe and fair for all of us. However, Clunkers demonstrated that the grass is really not greener with a government controlled economy. We the People should remember that despite capitalism’s faults, it is still the best means we have for inspiring achievement, and building the national wealth that is needed to lift the poor from poverty, fund health care, green technologies, infrastructure improvements, and most of the other needs of the nation and the world. We the People, in order to form a more perfect union, created a system that makes each of us responsible to ourselves, and gives each of us the freedom associated with that responsibility.
If Americans continue to think that the grass will be greener with more government involvement in our economy, then we can expect a future filled with Clunkers programs, courtesy of our politician’s good intentions.
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Good article. I agree the concept of cash for clunkers was good. Unfortunatley, the execution was not well thought out. Because of that 700,000 running vehicles were destroyed. As a result, used car prices have increased and revenue from auto repairs and car donation have decrease.
C4C was a wasteful program and as indicated on AMAZINGLY NBC’s Saturday Night Live, they FINALLY ripped a little on Obama who until now has seemed to be an untouchable in late night comedy. SNL admited in their mocking Obama that C4C was a great way to boost the economy… Only problem is that it boosted the economy of Japan! C4C took many perfectly good working cars which were American made and destroyed them and “CLAIMED” it was for the environment when in fact it will do NOTHING for the environment as people will only drive more now that they are getting better gas mileage and this study has been proven in numerous university studies. The studies showed that when people have a cheaper means of travel per mile they only drive more therefore the environmental gains are minimal if any. The program was very ill thought out, but then again I wouldn’t expect any less out of President Pelosi and her puppet Obama.
It appears the government is incapable of thinking beyond the first great idea. That’s the fun part. The nitty gritty is figuring out how it will be executed, will it achieve what was intended, what are the unintended consequences and what is the exit strategy.
These questions were not answered for Cars for Clunkers, the Stimulus or the Iraq War. I’m sure the healthcare bill would fit in there too.