More Cash for Clunkers Fallout: Decreased Industry Output by 3 Billion Dollars

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We covered the debacle that was Cash for Clunkers as it happened.

Ulterior Motives in “Cash for Clunkers?”

Cash for Clunkers: Revisited

Cash for Clunkers Revisited: More Damage Done

Cash for Clunkers Update: Jobs Created for the Bargain Price of $1,400,000 a Pop

Additional evidence of it’s failure continue to come in years later.  The latest Cash for Clunkers evidence comes to us courtesy of the Lonely Conservative…

This is how Democrats “help” the economy.

The government’s “Cash for Clunkers” program – pitched as a plan to jump-start U.S. auto sales and clean up the environment by getting gas-guzzling vehicles off the road — may have been a clunker itself, according to a new economic study.

Researchers at Texas A&M, in a recently released report, measured the impact of Cash for Clunkers on sales and found the program actually decreased industry revenue by $3 billion over a nine-to-11-month period. Meanwhile, the “stimulus” also cost taxpayers $3 billion. (Read More)

Government in action!

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Cash for Clunkers Update: Jobs Created for the Bargain Price of $1,400,000 a Pop

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Government programs tend to fail, and fail hard.  “Cash for Clunkers” was no exception, as we had covered here at the CH 2.0.

Ulterior Motives in “Cash for Clunkers?”

Cash for Clunkers: Revisited

Cash for Clunkers Revisited: More Damage Done

So then, we see a report that indicates that some jobs might have been created, to the tune of $1,400,000 a job.  Steve, at Motor City Times, has more…

Free markets are the only way to go:

A Bookings Institution study found the $2.85 billion program “provided a short-term boost in vehicle sales, which were pulled forward from sales that would have occurred in subsequent months. There was a small increase in employment but the implied cost per job created ($1.4 million) was far higher than other fiscal stimulus programs.”

The study — from researchers Ted Gayer and Emily Parker — said the “Car Allowance Rebate System,” or CARS did little to boost employment. This is at least the fourth major study since 2012 that has raised questions about the value of the program.

The study said far more jobs could have been created using other government stimulus programs — increasing unemployment benefits (at $95,000 per job); $80,000-$133,000 per job created for cutting employers’ payroll taxes; $222,000 per job created for reducing employees’ payroll taxes; $200,000 per job created for providing additional Social Security benefits; or $222,000 per job created for allowing the expensing of investment costs.

The study estimates the sales led to 3,676 “job years” — sales supporting a job for a single year — between the automaker and auto parts sector, or at a cost of $1.4 million per job. “This suggests that the CARS program was far less cost effective at creating jobs than other fiscal stimulus programs,” the report said.

And, since Cash for Clunkers really just drained the market and led to lower sales for months after the program ended, you might guess that the extra jobs, if any, were eventually lost anyway.

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Cash for Clunkers Revisited: More Damage Done

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For those of you that have been here since almost the beginning, you know that we pegged “Cash for Clunkers” as the huge failure that it was.  Here is what we wrote while the program was ongoing…

The cars traded in on the program are to be destroyed.  Now, in normal situations, a trade in will either go on the dealer lot, go to auction, or go to the junkyard.  In any of those situations, others will have the opportunity to benefit from this car, either by driving it, or by purchasing the usable parts from it.  When the car is destroyed, there is little benefit.  Or is there?  I wrote here about how the new Secretary of Transportation wants to “coerce” people out of their cars and onto public transportation.  Here are some quotes…

The moderator of the press club event asked LaHood: “Some in the highway-supporters motorist groups have been concerned by your livability initiative. Is this an effort to make driving more torturous and to coerce people out of their cars?”

LaHood answered: “It is a way to coerce people out of their cars.

 

And some more…

Lahood then made a joke about the fact that some conservatives believe that the way he wants to use the Department of Transportation represents an increased government intrusion in people’s lives.

“Some conservative groups are wary of the livable communities program, saying it’s an example of government intrusion into people’s lives,” said the moderator. “How do you respond?”

“About everything we do around here is government intrusion in people’s lives,” said LaHood. “So have at it.”

“So have at it.”  Pretty cavalier attitude regarding manipulating the public into a pre-arranged goal, isn’t it?

In the “Cash for Clunkers” plan, how many cars will be taken out of the market?  How many fewer Americans will be able to own a used car due to this?  New cars that are to be made to the messiah’s specifications will be more and more expensive.  To reach the mileage and emissions goals, more, newer technology will have to go in, increasing the cost.  With so many used cars sent to the crusher, where will people go for a car when they cannot afford the newer ones?  Funded with $1,000,000,000, the initial plan was to scrap 250,000 cars.  The congress wants to add another $2,000,000,000 to the plan, does that mean a total of 750,000 cars?   How many people will that “coerce” onto public transportation?

That was in August of 2009.

Here is what we said a little more than a year later…

 

I think we have the answer to my last question, courtesy of Ed Morrissey at Hot Air.

In other words, there was real and rational demand for the cars that the Obama administration sent to the grinders.  That demand hasn’t stopped, even if tainted with political incorrectness.  The top four vehicles for price increases in Edmunds’ used-car tracking are all high-end, larger cars or SUV:

Cadillac Escalade – 35.6% increase
Chevy Suburban – +34.2%
Dodge Grand Caravan – +34%
BMW X5 – +33%

As predicted last year, the people most hurt by the price increases are those who can least afford them.  The used-car market usually attracts people who need transportation on a budget, who cannot afford to buy new.   By destroying a quarter’s worth of trade-ins in three weeks and permanently taking them off the market, the Obama administration has forced an artificial inflation by supply restriction.  Moreover, they did so by subsidizing new-car sales that would have occurred anyway, eating up three billion dollars in taxpayer money.

In other words, the White House spent $3 billion to make used cars more expensive for working-class families.  Nice work.

I’m not claiming to have a gigantic brain with super -predictive powers.  Anyone with half a brain could see this coming.  However, the folks in DC are lacking that half brain, or any other, for that matter.  There is even more for the post mortem on “cash for clunkers.”  Freedomworks has more…

“Cash for Clunkers” allowed drivers to trade their old gas-guzzler for up to $4,500 towards the purchase of a sparkly new green machine. Progressive pundits hailed it as a foolproof win/win/win: The anemic auto industry would sell cars, broke customers would get a sweet deal, and Gaia herself would breathe easier at America’s crystal-clear skies.

Alas, reality begged to differ:

[Cash for Clunkers] created a dearth of used cars, artificially driving up prices. For those who needed an affordable car, but didn’t qualify for the program, this increase in price meant affordable transportation was well out of reach. It also meant used-car dealers, most of whom are independently owned, small-business owners, had little to no stock. According to Smith, 122 Virginia dealers chose not to renew their licenses after that year.

If 122 dealers were put out of business in one state alone, just imagine the damage nationally. And help to the consumer was illusory. The artificial trade-in bonus helped people who couldn’t qualify for a new car loan get saddled with debt they had no hope of repaying. Once financial reality — and higher insurance rates — kicked in, many saw their cars repossessed and their credit ruined. Ultimately, they traded in their affordable ride for a daily bus ticket.

And, there is even worse new from the greenie front…

E – The Environmental Magazine gravely notes that Cash for Clunkers produced tons of unnecessary waste while doing almost nothing to curb greenhouse gas emissions.

Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.

E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivalled newer cars.

So, it cost jobs, and was even worse for the environment.  And everyone saw that, but they did it anyway.  It looked good, and it “felt” good, so it really didn’t matter if it actually made things worse.

Once again, Quinn’s First Law is proven…

 

Liberalism always generates the exact opposite of it’s stated intent. 

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Cash for Clunkers: Revisited

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A little over a year ago, I wrote this about Cash for Clunkers.

The cars traded in on the program are to be destroyed.  Now, in normal situations, a trade in will either go on the dealer lot, go to auction, or go to the junkyard.  In any of those situations, others will have the opportunity to benefit from this car, either by driving it, or by purchasing the usable parts from it.  When the car is destroyed, there is little benefit.  Or is there?  I wrote here about how the new Secretary of Transportation wants to “coerce” people out of their cars and onto public transportation.  Here are some quotes…

The moderator of the press club event asked LaHood: “Some in the highway-supporters motorist groups have been concerned by your livability initiative. Is this an effort to make driving more torturous and to coerce people out of their cars?”

LaHood answered: “It is a way to coerce people out of their cars.

And some more…

Lahood then made a joke about the fact that some conservatives believe that the way he wants to use the Department of Transportation represents an increased government intrusion in people’s lives.

“Some conservative groups are wary of the livable communities program, saying it’s an example of government intrusion into people’s lives,” said the moderator. “How do you respond?”

“About everything we do around here is government intrusion in people’s lives,” said LaHood. “So have at it.”

“So have at it.”  Pretty cavalier attitude regarding manipulating the public into a pre-arranged goal, isn’t it?

In the “Cash for Clunkers” plan, how many cars will be taken out of the market?  How many fewer Americans will be able to own a used car due to this?  New cars that are to be made to the messiah’s specifications will be more and more expensive.  To reach the mileage and emissions goals, more, newer technology will have to go in, increasing the cost.  With so many used cars sent to the crusher, where will people go for a car when they cannot afford the newer ones?  Funded with $1,000,000,000, the initial plan was to scrap 250,000 cars.  The congress wants to add another $2,000,000,000 to the plan, does that mean a total of 750,000 cars?   How many people will that “coerce” onto public transportation?

So, back to 2010…

I think we have the answer to my last question, courtesy of Ed Morrissey at Hot Air.

In other words, there was real and rational demand for the cars that the Obama administration sent to the grinders.  That demand hasn’t stopped, even if tainted with political incorrectness.  The top four vehicles for price increases in Edmunds’ used-car tracking are all high-end, larger cars or SUV:

Cadillac Escalade – 35.6% increase
Chevy Suburban – +34.2%
Dodge Grand Caravan – +34%
BMW X5 – +33%

As predicted last year, the people most hurt by the price increases are those who can least afford them.  The used-car market usually attracts people who need transportation on a budget, who cannot afford to buy new.   By destroying a quarter’s worth of trade-ins in three weeks and permanently taking them off the market, the Obama administration has forced an artificial inflation by supply restriction.  Moreover, they did so by subsidizing new-car sales that would have occurred anyway, eating up three billion dollars in taxpayer money.

In other words, the White House spent $3 billion to make used cars more expensive for working-class families.  Nice work.
This is one of those situations where I wish I were wrong.  We could invoke Jim Quinn’s first law; “Liberalism always achieves the exact opposite of its stated intent,” but given Sec. LaHood’s comments, I can’t help but think that the scarcity of used cars is an intentional effect.

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Ulterior Motives in "Cash for Clunkers?"

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When one remembers that the left is often indirect in working toward their goals, one can take a look at a wide range of their actions, and see their statements put into action.  I think “Cash for Clunkers” may be such an example.  It’s a plan that looks good to many, and is obviously popular, but there are consequences that seem to fit some of their other goals.  Let’s take a look.  My first observation is a bit unrelated to the premise, but I think it’s important all it’s own.

They planned to have this program for four months.  It ran out of cash in four days!  And this is the same government that KNOWS how much their single payer plan will cost?  They can’t even estimate how to fund a four-month plan, but they can plan for decades of health care expenditures?  This is laughable.  Again, the cheerleaders at the MSM are simply saying that the program is “SOOOOO SUCCESSFUL!”

The cars traded in on the program are to be destroyed.  Now, in normal situations, a trade in will either go on the dealer lot, go to auction, or go to the junkyard.  In any of those situations, others will have the opportunity to benefit from this car, either by driving it, or by purchasing the usable parts from it.  When the car is destroyed, there is little benefit.  Or is there?  I wrote here about how the new Secretary of Transportation wants to “coerce” people out of their cars and onto public transportation.  Here are some quotes…

The moderator of the press club event asked LaHood: “Some in the highway-supporters motorist groups have been concerned by your livability initiative. Is this an effort to make driving more torturous and to coerce people out of their cars?”

LaHood answered: “It is a way to coerce people out of their cars.

And some more…

Lahood then made a joke about the fact that some conservatives believe that the way he wants to use the Department of Transportation represents an increased government intrusion in people’s lives.

“Some conservative groups are wary of the livable communities program, saying it’s an example of government intrusion into people’s lives,” said the moderator. “How do you respond?”

“About everything we do around here is government intrusion in people’s lives,” said LaHood. “So have at it.”

“So have at it.”  Pretty cavalier attitude regarding manipulating the public into a pre-arranged goal, isn’t it?

In the “Cash for Clunkers” plan, how many cars will be taken out of the market?  How many fewer Americans will be able to own a used car due to this?  New cars that are to be made to the messiah’s specifications will be more and more expensive.  To reach the mileage and emissions goals, more, newer technology will have to go in, increasing the cost.  With so many used cars sent to the crusher, where will people go for a car when they cannot afford the newer ones?  Funded with $1,000,000,000, the initial plan was to scrap 250,000 cars.  The congress wants to add another $2,000,000,000 to the plan, does that mean a total of 750,000 cars?   How many people will that “coerce” onto public transportation?

Am I reaching here?  Quite possibly, however, if we look at what the left says, and compare it to what they do, some interesting patterns emerge.

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Disclaimer: Government Assistance Comes With Strings Attached

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When we give the government power to give us something, we give them control over us.  The assistance always comes with requirements, regulations, stipulations, and so forth.  This, for the left, is a “backdoor” way to advance their agenda.  Directly ordering states to change their laws and regulations is a direct violation of the Tenth Amendment.  Also, going through the legislative process can be messy; legislation may not pass, and, more importantly, the debate is public.  When the left can’t pass something in the open, their either do it in pieces (incrementally), bypass the democratic process via a lawsuit, or pass it as a “string” attached to funding.

As we see the programs of the POTUS emerge, one can see the truth in this idea.  We have seen the Porkulus mandate that states change their laws and regulations.  For example, states accepting Porkulus money for unemployment are required to change their laws to provide benefits for people having part time jobs.  At the time, many states did not do this. Then, when the Porkulus money runs out, the states would be strapped with an unfunded mandate that would break their budgets!  The left obviously wanted states to do this, so they made it a “string.”  They count on desperation.  They wanted to approach cash strapped governors with this Faustian deal, and get them to sign on, and many did.  The MSM, of course, vilified the ones that saw past the crisis to look upon the power grab.

Another example is with the Single Payer health care plan.  They want to entice the poor with “free coverage,” and “guilt” better-off Americans into giving them control of the health care industry.   (I’ll be covering the falsehood of the rationale for the single payer plan in a future post.)

The strings attached to this are a bit more unspoken, but altogether real.  Under this plan, the government gets to…

  1. Control the payment your doctor receives.
  2. Mandate what treatments your doctor can and cannot provide to you.
  3. Ration care (They say publicly that this is not the case, but I covered this some time ago here, and here.)
  4. Mandate “end of life counseling.” (Yes, they say they’re not going to cut off care to seniors, but some of the minions have been quoted advocating for it.)

Now, there will be some that say, “This is fear mongering!  You’re just trying to scare the old folks!”  I think my response would have to be two fold:  The left has been telling the seniors that the Republicans were going to freeze and starve them for decades!  My other response would be that the administration has been saying to the press that the “public option” isn’t about single payer, but to their supporters, they say something very different!  If they lied about this aspect of the plan, why should we trust that rationing isn’t in the works, after all, they have mentioned it, just like they mentioned single payer!  Give them your healthcare, and you and you doctor will lose all control over it-plain and simple.

Anytime you accept assistance from the government, you accept their control over some part of your life.  Banks that took TARP money found out quickly that any aspect of their organization could be scrutinized or controlled, including the salaries of their workers.  The creditors for Chrysler found out that they were going to be cheated by the government bailouts, and were threatened with retaliation if the did not comply.  The CEO of GM got shown the door; GM was taken over by the government, and the friends of the POTUS, the UAW, got the windfall.  Thousands of GM and Chrysler dealers were shut down, most of them were profitable (and Republicans), and untold thousands of their workers were put in the unemployment line.  All of these events occurred because it was thought that taking government assistance would be a good idea.

Now, the latest.  The government created the “Cash for Clunkers” program ostensibly to help the car industry, and to get people into more fuel-efficient cars.  They even created a helpful website so people could enter their information and find out what they were able to do with the program.  The strings??  Glen Beck accessed the sight on his show on Friday; this is his coverage of the issue:

So, log on to this government website, and the government “owns” your computer!  All of your information, your pictures, your music, my ranting against the POTUS, all belong to the government!  Now, are they scanning every computer to see what is on it?  I don’t know, but they sure saw a need to put that up as a “terms of use.”  Why is that?

Frankly, the notion that government assistance represents control could take up a book, but I thought giving some of the more recent examples would serve as a reminder that, as Reagan said…

“Governments tend not to solve problems, only to rearrange them.”

And, more importantly…

“The most terrifying words in the English language are: I’m from the government and I’m here to help.”

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