Thursday, November 10, 2011

Was Cash For Clunkers A Clunker?

Was Cash For Clunkers A Clunker?

That's the question that Ezra Klein of The Washington Post asks if you go here. 

To even ask that question is to answer it. 

Yes, the program was a clunker.  It was a clunker of such magnitude that to even ask the question is to answer it.  If you're pay more for something than it is worth, or to expedite or reward a lopsided trade of that type, then you are participating in Clunkerite behavior. 

Good Lord in heaven, this thing made me crazy back in the day.  Now even the Official Newsletter Of The Obama Vandalism Team is almost admitting that the program was dumber than a box of rocks.  Here's Klein:
For one thing, the fuel-economy requirements were fairly lax: A person could, in theory, trade in a Hummer that got 14 mpg and get a $3,500 voucher for a new 18-mpg SUV. What’s more, that slight gain in efficiency would be partially offset by the energy costs involved in manufacturing the new car. And on the economic front, critics argued, the program might just move up purchases that would’ve happened anyway — thereby providing little actual stimulus.
And that's exactly the type of thing that the smarter people among us did.
My employer, Jukt Micronics, participated in a similar Texas program for forklifts.  It was supposedly about lowering carbon emissions, but in reality it was about using up some of the Texas government's 2009 budget.  Hit this link.  The forklift giveaway was pure, undiluted, insane, government mandated greatness.  I can't thank you good taxpayers enough for giving me these forklifts , by the way.  Oh, and we're letting these things idle all night so that the government inspectors will see that they're getting enough hours, which is the only way they can prove that I really needed them. 
Long story.  Hit the link.  I'm begging you. 
Go ahead.  Hit this link. 
You'll continue to vote for Democrat or Republican idiots unless you hit this link. 

But that's enough chatter about how I'm letting forklifts idle all night so the odometers will prove that I really did need the forklifts that you gave me so that I could help reduce carbon emissions.....Back to Ezra Klein at the WaPo:
So were the naysayers right? It seems so. A newly updated analysis from economists at Resources for the Future finds that the actual benefits of the program were pretty meager. The paper examined U.S. car sales using trends in Canada as a control group, and estimated that about 45 percent of cash-for-clunker vouchers went to consumers who would have bought new cars anyway. In the end, the program boosted U.S. vehicle sales by just 360,000 in July and August of 2009 and provided no stimulus thereafter. What’s more, the program increased average fuel economy in the United States by just 0.65 miles per gallon.
Ezra, you ignorant slut. 
The program was not about stimulus, or fuel economy.  I don't know why this is so hard to admit.   
The program was a political favor to Detroit which harmed most of the rest of us.  It annihilated the used car and used parts market.  Mission accomplished on that score. 
Now, there’s a case to be made that that’s better than nothing. For one, handing $3,500 vouchers to people who would’ve bought cars anyway still counts as stimulus. What’s more, as the RFF paper found, the program reduced overall U.S. carbon-dioxide emissions by between 9 million and 28.4 million tons. But even so, that implies that it cost between $91 and $288 per ton to get those reductions — a pretty lousy bargain as far as carbon policy goes. Even if the program did have some benefits, it’s hard to argue that it was an efficient way to dole out cash.
Oh for Christ's sake !!!   It doesn't count as "stimulus".  Ezra, if I take money from you and give it to a forklift manufacturer, it doesn't stimulate anything but my do-gooder credentials.  You won't get to spend the money the way you wanted to, and the forklift manufacturer gets to spend it the way he wants to.  Net gain: Zero. 

And chances are, the manufacturer is going to spend some of it on campaign contributions for the person who took away your money, you idiot.  

Here's one of my least favorite videos of all time. 

1 comment:

Nick said...

C4C didn't even do the things that Klein charitably rewards it for. The CO2 embedded in the new vehicles more than offsets the gains in fuel economy. Also, when people get more mpg, they tend to drive more because the cost per mile has dropped.

Then we aren't counting the environmental damage caused by the mining of rare earth metals and nickel used in the many hybrids sold.

All of the vehicles that were destroyed had useful life remaining, and a large portion of that value was erased from the nation's balance sheet.

Accelerated vehicle sales stole sales from the future, and will displace all the labor used to make the new vehicles. If the labor market had fully recovered, that wouldn't have been much of a problem. But since it didn't recover, the program was a waste.

Then there is all the fraud, only some of which we know about.

By the way, than you sir for your contribution to the Homebuyers Tax Credit and tax rebate for new energy efficient windows I got for buying things I would have bought anyway. Unfortunately, I ended up paying that rebate back in a higher house price and higher taxes.

Keynesian economics is rearranging deck chairs on the Titanic.