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"Cash for Clunkers" Passes; dangerous?

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Will the "Cash for Clunkers" (C.A.R.S. Act) really help stimulate the economy?

President Obama signed a bill on June 24th to offer a voucher for U.S. citizens to "trade-in" their old inefficient "clunker" for a $3500-$4500 credit towards the purchase of a new more efficient vehicle. I don't necessarily consider myself an authority on the C.A.R.S. Act, but I work in the industry and have read the law. I thought I'd share some interesting points; it reminds me of a bunch of politicians scrambling to save an industry in this great book I read ;-)

*The program begins July 1, 2009 but the rules and regulations for the program will not be released till July 24, 2009. So, does that mean dealers will be giving $3500-$4500

*The expected boost of sales is 1,000,000 vehicles for the year, however, the program ends when $1,000,000,000.00 is spent - when the average credit is $4000.00 that means only 250,000 vouchers will be given. How does that translate to 1,000,000 vehicles?

Anyways, thought it was an interesting tidbit on how they are handling the crisis in the american auto industry....

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*The program begins July 1, 2009 but the rules and regulations for the program will not be released till July 24, 2009. So, does that mean dealers will be giving $3500-$4500

Didn't finish my statement, I apologize...

*The program begins July 1, 2009 but the rules and regulations for the C.A.R.S. Act will not be released until July 24, 2009. This means that the dealers could potentially be delivering vouchers to customers before the rules of the program are even set. On the 24th, when the criteria and rules of the program are released if anything is different than expected the potential loss to the dealerships is significant. Stimulating?

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*The program begins July 1, 2009 but the rules and regulations for the program will not be released till July 24, 2009. So, does that mean dealers will be giving $3500-$4500

Didn't finish my statement, I apologize...

*The program begins July 1, 2009 but the rules and regulations for the C.A.R.S. Act will not be released until July 24, 2009. This means that the dealers could potentially be delivering vouchers to customers before the rules of the program are even set. On the 24th, when the criteria and rules of the program are released if anything is different than expected the potential loss to the dealerships is significant. Stimulating?

Some brilliant people, NOT! ;)

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Will the "Cash for Clunkers" (C.A.R.S. Act) really help stimulate the economy?

No. It might help automakers, for a while, but not the economy. If all I want is a used car from a private owner rather than a car from a dealer, there are going to be 1,000,000 (or 250,000 depending upon your math as you indicate below) private owners who won't be able to sell their used cars if I am financially directed to buy a new car. It will also promote being in debt for those who don't have the remaining balance for the new car.

President Obama signed a bill on June 24th to offer a voucher for U.S. citizens to "trade-in" their old inefficient "clunker" for a $3500-$4500 credit towards the purchase of a new more efficient vehicle. I don't necessarily consider myself an authority on the C.A.R.S. Act, but I work in the industry and have read the law. I thought I'd share some interesting points; it reminds me of a bunch of politicians scrambling to save an industry in this great book I read ;-)

*The program begins July 1, 2009 but the rules and regulations for the program will not be released till July 24, 2009. So, does that mean dealers will be giving $3500-$4500

*The expected boost of sales is 1,000,000 vehicles for the year, however, the program ends when $1,000,000,000.00 is spent - when the average credit is $4000.00 that means only 250,000 vouchers will be given. How does that translate to 1,000,000 vehicles?

Magic. Don't do math; just accept what they say.

Anyways, thought it was an interesting tidbit on how they are handling the crisis in the american auto industry....

Not handling, controlling and directing.

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Government intervention buying up and destroying cars does not help the economy. It is deliberately destructive. The money spent to replace what is lost always means less money to spend or invest elsewhere. Destruction is always destructive. Government caused, taxpayer subsidized destruction is worse. They are replacing consumer choices with government mandates and higher taxes to fund them, while destroying what people otherwise would choose.

More specifically, destroying older cars means that there will be fewer of them left and therefore less incentive for the manufacturer to continue making parts. It will therefore become harder or impossible to keep an older car on the road. That is what they want. They want to force you to buy a newer car made with mandated equipment, which is very expensive to maintain and one good reason to keep an older car running. They know that you know that and want to interfer with your choice. They are always looking for ways to interfer with your own judgment and choices and then calling it an "improvement in the economy" when you have to do what they want.

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I should add that for the economic issues of the fallacy of "improving the economy" by destroying existing assets to "stimulate" economic activity replacing them you should read Henry Hazlett's Economics in One Lesson, especially his discussion of the broken window fallacy.

But this car scheme is primarily politically and ideologically driven by the viro agenda of control limiting technology and use of energy. They may or may not believe their claims to "economic improvement" in this car buying scheme, but such claims are primarily intended to propagandize and sell the scheme to the public to make it more pallatable while they use the power of government intervention in the economy to accelerate the viro agenda. They would prefer to directly mandate the elimination of older cars but know they can't get away with that politically because there are too many of them -- they know they have to "grandfather" older cars rather than outright ban them because there would be too much of a revolt against such a ban, at least until the owners of such cars are too much of a minority to matter politically. Hence the pretense of "choice" and a "market mechanism" of "incentives" for what is in fact government coercion through taxes, borrowing and inflation for discriminatory subsidies intended to herd people into a government agenda manipulating the market. They are doing everything they can to coercively intervene in the economy in order to undermine the "grandfathering" and accelerate the elimination of unapproved cars that people would otherwise keep because they choose to spend their money elsewhere instead of paying taxes or buying a new car they can do without. If they can pay people off and drive out the market for parts available to those who are left, that is politically easier through the deception heading off controversy than an outright ban.

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I should add that for the economic issues of the fallacy of "improving the economy" by destroying existing assets to "stimulate" economic activity replacing them you should read Henry Hazlett's Economics in One Lesson, especially his discussion of the broken window fallacy.

But this car scheme is primarily politically and ideologically driven by the viro agenda of control limiting technology and use of energy. They may or may not believe their claims to "economic improvement" in this car buying scheme, but such claims are primarily intended to propagandize and sell the scheme to the public to make it more pallatable while they use the power of government intervention in the economy to accelerate the viro agenda. They would prefer to directly mandate the elimination of older cars but know they can't get away with that politically because there are too many of them -- they know they have to "grandfather" older cars rather than outright ban them because there would be too much of a revolt against such a ban, at least until the owners of such cars are too much of a minority to matter politically. Hence the pretense of "choice" and a "market mechanism" of "incentives" for what is in fact government coercion through taxes, borrowing and inflation for discriminatory subsidies intended to herd people into a government agenda manipulating the market. They are doing everything they can to coercively intervene in the economy in order to undermine the "grandfathering" and accelerate the elimination of unapproved cars that people would otherwise keep because they choose to spend their money elsewhere instead of paying taxes or buying a new car they can do without. If they can pay people off and drive out the market for parts available to those who are left, that is politically easier through the deception heading off controversy than an outright ban.

Excellent analysis, Erich.

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Well, not surprisingly, the Cash for Clunkers program has run out of money. After destroying thousands of valuable cars and putting in debt thousands of new car buyers, the Obama administration is looking to see if it can continue its destruction of assets. Somehow, such destruction and indebtedness is supposed to get us out of the recession and productive again. Such ignorance of basic economics can not possibly be innocent. Destruction = production; indebtedness = savings; slavery = freedom.

It's no longer 1984; it's now, 2009.

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Well, not surprisingly, the Cash for Clunkers program has run out of money. After destroying thousands of valuable cars and putting in debt thousands of new car buyers, the Obama administration is looking to see if it can continue its destruction of assets. Somehow, such destruction and indebtedness is supposed to get us out of the recession and productive again. Such ignorance of basic economics can not possibly be innocent. Destruction = production; indebtedness = savings; slavery = freedom.

It's no longer 1984; it's now, 2009.

See Dealers Race to Get Their Clunkers Crushed.

The White House and Congress may be giving the “cash for clunkers” program a reprieve, but one can’t help wondering how many dealers and customers will have the confidence to go forward at this point. Things sound like a total mess in the showrooms.

“There is absolute frustration across the board,” Alex Kurkin, a lawyer based in Miami who represents several car dealerships, tells The Lede today. “As of this morning, they’re not really confident about any deals, and no one can give them advice about what they should be telling their customers.”

One thing still not clear is how many older cars have actually been sold and scrapped with the original $1 billion, and how many more the new $2 billion will be able to cover. Mr. Kurkin tells us that the government Web site where dealers are supposed to register their deals has been crashing, and the dealers haven’t been able to plug in their information.

We spent a couple of days earlier this week following the whole complex program, from dealer to scrap heap, and found twists and turns in it that are making it a nightmare now for everyone involved.

The program requires that the clunkers be put out of service for good, so dealers must destroy the engines on cars that are traded in. We watched this process yesterday at the DCH Paramus Honda in Paramus, N.J. It is quite laborious and potentially dangerous. And it certainly is final.

Nick Clites, who is in charge of used cars for the dealership, was prepping a 1988 BMW 535IS, with 214,000 miles on the odometer, for its death. He drained the oil, then donned a silky blue protective suit, goggles and gloves and poured a sodium silicate solution into the engine. He revved the car, and within a few seconds, the solution hardened into a glass-like substance, the engine seized up and the car was dead.

The soul of the industrial revolution has been lost. Can we find it? Where is John Galt?

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Rush Limbaugh and Glenn Beck have been, appropriately, pounding on this insanity.

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Rush Limbaugh and Glenn Beck have been, appropriately, pounding on this insanity.

This is one of the worst programs I've ever seen the government foist on the public. Here you have dealers give their customers rebates that they don't have confidence of getting reimbursed; once the dealers destroy the engines, the scrap yards don't want the cars from the dealers because they can't resell the engines for parts, so the cars pile up at the dealers; the government now promises $2B more and the dealers race to destroy more cars because "They’re worried that the new money might last only two days." The range of thinking of businessmen has shrunk to this. Truly abominable.

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Rush Limbaugh and Glenn Beck have been, appropriately, pounding on this insanity.

This is one of the worst programs I've ever seen the government foist on the public. Here you have dealers give their customers rebates that they don't have confidence of getting reimbursed; once the dealers destroy the engines, the scrap yards don't want the cars from the dealers because they can't resell the engines for parts, so the cars pile up at the dealers; the government now promises $2B more and the dealers race to destroy more cars because "They’re worried that the new money might last only two days." The range of thinking of businessmen has shrunk to this. Truly abominable.

How right you are: cars and dealers back to "base" metal.

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Note the similarity between this and the progressives' "reform" plans for health care in which they want government rationing to curtail care for the elderly to save money and be more "efficient', thereby "stimulating" the economy of those deemed to be worth more.

Glenn Beck suggests that Obama combine this and "Cash for Clunkers" into a "Cash for Cripples" program. You would turn grandma into the government for stimulus cash. Of course her brain would have to be permanently disabled to ensure that there were no witne..., er, to ensure the integrity of the program with the money properly spent. Then the parts would be shipped to China for re-educat..., er, re-use in more valuable robo.., er, products. Cash for Cripples is the ultimate in "shovel ready" government projects, greatly stimulating the graveyard industry.

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Note the similarity between this and the progressives' "reform" plans for health care in which they want government rationing to curtail care for the elderly to save money and be more "efficient', thereby "stimulating" the economy of those deemed to be worth more.

Glenn Beck suggests that Obama combine this and "Cash for Clunkers" into a "Cash for Cripples" program. You would turn grandma into the government for stimulus cash. Of course her brain would have to be permanently disabled to ensure that there were no witne..., er, to ensure the integrity of the program with the money properly spent. Then the parts would be shipped to China for re-educat..., er, re-use in more valuable robo.., er, products. Cash for Cripples is the ultimate in "shovel ready" government projects, greatly stimulating the graveyard industry.

:angry2:

I hadn't heard him make that comparison, but that is excellent. Soylent Green in reality.

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"Uncle Sam Wants You" has taken on a new meaning. It's the same old premise but now they pay cash up front to "stimulate" your shovel-ready sacrifice.

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That was actually one of his radio show caller's jokes, but he got such a kick out of it he used it on TV. I'm not sure why he took credit for it, though.

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About 10 years ago in Arizona, then Governor Jane Hull instituted the 'Alt Fuels' program that subsidized vehicles fitted with propane tanks. I personally knew a guy I worked with who bought TWO Chevy Suburbans completely loaded for essentially the price of one, thanks to this program. There was no requirement that the purchasers actually USE propane fuel, and this particular guy actually had the propane tanks removed after the deal was completely done. So, the program was an obvious fraud from the beginning and the people who 'got in on the ground floor' made out like bandits while the taxpayers foot the bill.

You can guess the results of the program based solely on my co-worker's actions. Within a few months, the program was abruptly ended and REPUBLICAN Governor Hull was basically shamed out of office.

Since that debacle, there was never again talk of such a program in Arizona, but now of course all of you in America get to repeat the insanity on a national scale. Somehow I doubt Dear Leader will take any of the blame for it.

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About 10 years ago in Arizona, then Governor Jane Hull instituted the 'Alt Fuels' program that subsidized vehicles fitted with propane tanks. I personally knew a guy I worked with who bought TWO Chevy Suburbans completely loaded for essentially the price of one, thanks to this program. There was no requirement that the purchasers actually USE propane fuel, and this particular guy actually had the propane tanks removed after the deal was completely done. So, the program was an obvious fraud from the beginning and the people who 'got in on the ground floor' made out like bandits while the taxpayers foot the bill.

You can guess the results of the program based solely on my co-worker's actions. Within a few months, the program was abruptly ended and REPUBLICAN Governor Hull was basically shamed out of office.

Since that debacle, there was never again talk of such a program in Arizona, but now of course all of you in America get to repeat the insanity on a national scale. Somehow I doubt Dear Leader will take any of the blame for it.

You can read about it here: http://www.goldwaterinstitute.org/article/1063

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About 10 years ago in Arizona, then Governor Jane Hull instituted the 'Alt Fuels' program that subsidized vehicles fitted with propane tanks. I personally knew a guy I worked with who bought TWO Chevy Suburbans completely loaded for essentially the price of one, thanks to this program. There was no requirement that the purchasers actually USE propane fuel, and this particular guy actually had the propane tanks removed after the deal was completely done. So, the program was an obvious fraud from the beginning and the people who 'got in on the ground floor' made out like bandits while the taxpayers foot the bill.

You can guess the results of the program based solely on my co-worker's actions. Within a few months, the program was abruptly ended and REPUBLICAN Governor Hull was basically shamed out of office.

Since that debacle, there was never again talk of such a program in Arizona, but now of course all of you in America get to repeat the insanity on a national scale. Somehow I doubt Dear Leader will take any of the blame for it.

Jason, your statement(s) from above reminded me of a book I read called The Roosevelt Myth which was written by John T. Flynn. The book was originally printed in 1948 and in the book John Flynn describes the situations from the time just before Roosevelt took office and then up through his death. There is a part during Roosevelt's second term, somewhere around 1938, and after his "New Deal" and "The Second New Deal" have both failed when Roosevelt is blaming everyone else around him while constantly replacing most of his staff and almost begging for someone to tell him what to do, but taking none of the blame for his ideas. As a matter of fact while reading the book I kept thinking how a lot of the situations we are going through now are very, very similar to what happened under Hoover and then Roosevelt.

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Government intervention buying up and destroying cars does not help the economy. It is deliberately destructive. The money spent to replace what is lost always means less money to spend or invest elsewhere. Destruction is always destructive. Government caused, taxpayer subsidized destruction is worse. They are replacing consumer choices with government mandates and higher taxes to fund them, while destroying what people otherwise would choose.

More specifically, destroying older cars means that there will be fewer of them left and therefore less incentive for the manufacturer to continue making parts. It will therefore become harder or impossible to keep an older car on the road. That is what they want. They want to force you to buy a newer car made with mandated equipment, which is very expensive to maintain and one good reason to keep an older car running. They know that you know that and want to interfer with your choice. They are always looking for ways to interfer with your own judgment and choices and then calling it an "improvement in the economy" when you have to do what they want.

The central idea identified in both paragraphs, the main idea that the government wants people to get "used to" and feel comfortable with, is government mandate. Mandates are good! See how they help people get new cars! Hey, if mandates work with cars, why not with doctors, with jobs, with education? Mandation makes a great nation! Why, a mandate President is what we've needed all along!

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It seems some enjoy destroying assets:

At dealerships across America, mechanics accustomed to fixing engines are battling for the chance to ruin them. "Everybody wants to go first, so I'm probably going to have to make them draw straws," says Jim Burton of Randy Curnow Buick Pontiac GMC in Kansas City, Kan. As service manager, however, he might reserve that thrill for himself. "I can't wait," he says.

Over the weekend, half a dozen mechanics gathered around three clunkers marked for death at Jim Clark Motors in Lawrence, Kan. As Loris Brubeck Jr., the dealership's president, held a stopwatch, the sodium-silicate solution took two minutes flat to kill a 2002 Ford Windstar, and just a few seconds more to kill a 1999 Jeep. But a 1988 Dodge van lasted more than six minutes.

Liquid glass

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Jason, your statement(s) from above reminded me of a book I read called The Roosevelt Myth which was written by John T. Flynn. The book was originally printed in 1948 and in the book John Flynn describes the situations from the time just before Roosevelt took office and then up through his death.

In the second edition in the 1950s Flynn didn't hold back. By then he had learned even more to confirm what he had known all along but didn't put all of into the 1948 edition. If you buy a used copy, keep that distinction in mind.

There is a part during Roosevelt's second term, somewhere around 1938, and after his "New Deal" and "The Second New Deal" have both failed when Roosevelt is blaming everyone else around him while constantly replacing most of his staff and almost begging for someone to tell him what to do, but taking none of the blame for his ideas. As a matter of fact while reading the book I kept thinking how a lot of the situations we are going through now are very, very similar to what happened under Hoover and then Roosevelt.

They are similar, but FDR didn't have any ideas. He was a power seeker who relied on the schemes of others, who usually turned out to be various kinds of fascists and communists. (What other book does this remind you of?) Is Obama much different? He absorbed a lot at Columbia and Harvard and from his cohorts in the progressive left, but he is not known himself for anything but his 'organizing', parroting leftist political agendas and reactions, and political action as a politician. A few recordings exist of his views (like his statements on how the Warren Court really wasn't that radical and he and has political allies have to politically get around the Constitutional constraints on government power), but there isn't much explicitly revealing his ideology and intellectual thoughts, and nothing original. Even his academic history has been thoroughly repressed. One wonders if there is anything in his writing to be repressed other than parrotting of ideology that would be politically embarrassing. Meanwhile, as president and like Roosevelt, he has surrounded himself with radical left intellectuals seeking a means to impose their ideology, but you have to suspect that the choice of their ideology is more explicit with Obama than it was with Roosevelt. Obama hasn't had enough time yet to replace and scapegoat his staff and advisors to avoid blame for his ostensive failures; so far he is still blaming "Bush" and "Wall Street". That much, at least, will continue. There is reason to believe that he is worse than incompetent, and that he deliberately seeks some of the failures as an excuse to break down the system and impose even more radical anti-American ideas for which it is otherwise still too early to openly promote.

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Ewv, I agree with your comments. And to answer your question, reading Flynn's book (second edition) reminded me of Atlas Shrugged.

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