Cash for Clunkers Revisited: More Damage Done


Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.


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…


Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

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.