By on July 31, 2009

When it comes to federal teat suckling, Mark Tapscott’s got the inside line. I don’t mean Edmunds and I don’t mean he does it personally; Mark knows a lot about how the beltway boys reach into the taxpayer’s trousers to play pocket pool. So, while Tapscott joins the MSM (and TTAC) in announcing the bogus Cash for Clunkers program’s pre-mature hiatus, he’s out in front re: the C.A.R.S. program’s long term fate. Mark says the bill was secretly written with permanent marker. In other words, the billion dollar (for starters) Cash for Clunker boondoggle’s a keeper. The writer gives five—count ’em five!— reasons for car dealers to be perpetually cheerful about automotive euthanasia . . .

First, anytime Congress and the White House see an opportunity to take tax dollars and give them to somebody who can vote, they will do it . . .

Second . . . [it’s] an irresistible opportunity for the Washington politicians and bureaucrats to expand their power and perogatives over the rest of us . . .

Third, the timing is perfect . . . In just four days, Cash-for-Clunkers has given new life to the whole idea that government spending is the way to stimulate the economy. People are more receptive now than they will ever be to the idea of making a temporary measure permanent.

Fourth, Washington money is like crack cocaine . . .

Finally, the media won’t tell the whole story of Cash-for-Clunkers. Reporting on it will emphasize two things – Happy dealers and buyers getting new cars and trucks, and worried dealers wondering what will happen when the program ends.

What won’t be reported will be the actual cost of the program to the taxpayers, the transitory economic stimulus it provides, and how the most severe consequences will be felt among low-inomes people who must depend on used cars and trucks for their transportation.

No argument here.

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24 Comments on “Tapscott: Cash for Clunkers Will Become Permanent...”

  • avatar

    We know where GM ended up with 0% financing started post 9/11.

  • avatar

    I guess I had better buy that Roadmaster now.

    On a side issue, my local newspaper had an article on demolition derbys. The reporter quoted a longtime participant who doubts that derbys will be around in 10 years, mostly due to the growing shortage of suitable cars. Specifically, big cars that will run for awhile without coolant. The car of choice is the 74-76 Impalas and Caprices with the big bumpers. (the best use I ever heard for these) They say that the smaller cars cant take the hits and quit too quickly. Anyhow, cars for clunkers will be a factor as well, getting rid of the rest of the big ‘uns from the late 80s and 90s.

  • avatar

    We know where GM ended up with 0% financing started post 9/11.

    Yes, and how GM smirked and strutted when Ford complained about having to compete with it.

    Ain’t karma a bitch?

  • avatar

    As anticipated in 1984, the “war” with Oceania will continue in perpetuity.

    One of the things that CARS highlights is that people cannot afford things unless given substantial subsidies.

    So we now have:

    1. $8,000 (soon to be $10,000 and proposed $15,000) housing stimulus;

    2. $4,500 (soon to be more, no doubt) auto stimulus;

    3. 0% cash for banks to support lending

    4. Billions to support state and local agencies (check your local paper to see how much stimulus money is going to your schools and police departments to float them).

    What’s the lesson kids? We’re spending waaaay beyond our means and unless Uncle Sam supports our lifestyles we will not be able to continue living as we have the past 15 years.

    I don’t care what any economics pundit or government bonehead says: this is mathematically unsustainable. Further, the damage it does to the country’s psyche is going to be brutal.

    Watch what happens when the car makers raise prices or reduce incentives as suply shrinks and they decide to offset some of that federal stimulus and funnel it their way: sales will drop like a rock as consumers pull back again. Time and time again this has happened – see the price of college tuition the last 20 years if you want an example: as government subsidies and loan backing increased the demand for college, colleges turned right around and increased prices because they could (knowing that the government would simply boost the amount they would make available/guarantee).

    Further proof? Look at Fannie Mae and Freddie Mac: with government guarantees and cheap money they ran amok to the point where they’ve essentially detonated the system.

    Worse? Everyone now thinks: Hell, it’s my money, I should get in on the game too. I don’t want to be the last sucker standing. Now that this attitude has become prevalent, Big Brother has won and we are all beholden to him. Just wait until healthcare passes – once the masses rely on Uncle Sam for that, they’ll never say no to government.

    I’m not trying to be a Cassandra nor hystrionic, but everything is playing out as is the natural progression of these things.

  • avatar

    hreardon, I’ve been singing that same song for awhile and everybody walked out of the room on me multiple times.

    It’s gotten to the point where my giveadamn broke and I figure I’ll just quieten down and let the drek hit the air recirculating device. I can’t stop it all, anyway.

    Read it if you dare. It’s brutally honest, and sadly, probably at least 90% “pravda” (true).

  • avatar

    Mark Tapscott is a veteran DC reporter. In the mid to late ’80s, and maybe before then, he was on the Washington times. I don’t know where he’s been since. Interesting article. Cash for clunkers is definitely one of those ideas that has a lot of unfortunate unintended conseqeunces. I can remember how, in the early ’90s, my mechanic, Adrian, wanted to save me money on a new distributor for my ’77 toyota. He went to several junkyards, couldn’t find a ’77 distributor, but put in a ’71, which worked fine, although it made it harder for me to get parts when tuneup time came around. (The only reason the Toyota needed a new distributor is that the first time I tuned it, I dropped a couple of screws down the distributor hole. No problem for maybe 6 years, but then the thing began crapping out, and it looked interesting after Adrian pulled it out. Adrian, if you are by some chance reading this, I’d love to hear from you.

  • avatar

    It’s going to be astounding when the bailout bubble finally pops.

  • avatar

    hreardon, menno,

    Japans debt is about to hit 200% of GDP. The US is at about 60% debt held by the public. How did things in Japan get so out of hand? They waited too long to before they began their simulus.

    The idea that if you don’t do anything it will be cheaper in the long run just isn’t backed by history. In almost all cases the longer you wait and the less you do the more it will eventually cost to stabilize the economy.

    Between 1992 and 1995, Japan tried six spending programs totaling 65.5 trillion yen and cut income tax rates during 1994. In January 1998, Japan temporarily cut taxes again by 2 trillion yen. Then, in April of that year, the government unveiled a fiscal stimulus package worth more than 16.7 trillion yen, almost half of which was for public works. Again, in November 1998, another fiscal stimulus package worth 23.9 trillion yen was announced. A year later (November 1999), yet another fiscal stimulus package of 18 trillion yen was tried. Finally, in October 2000, Japan announced yet another fiscal stimulus package of 11 trillion yen. Overall during the 1990s, Japan tried 10 fiscal stimulus packages totaling more than 100 trillion yen

    It’s not outside the realm of possiblity to think that if they had just done it earlier and all at once (like we are) it would have been a lot cheaper and a lot more effective.

  • avatar

    The only thing they will produce is a collapse in tax revenue.

    People are getting furious.

    The lowlifes get free money and people that actually produce something get taxed?

    How long do you think people will produce in excess of what they need just to give free money to someone else?

    Perhaps when the new beneficiaries get unemployed their discounted new car will get reposessed.

  • avatar
    Rod Panhard

    Hippo, they’ll continue to drink the Kool-Aid and believe that rising tides lift all boats, and the White House sources will continue to tell us the tide is rising.

    Here’s what I think is funny about this. Eight years ago, I stopped working in new media for media conglomerates and went elsewhere.

    Almost all of my co-workers at three different media companies were very responsible people. They were concerned about the environment. They worked hard and are very nice people. Most of them were fans of the comic strip “Pluggers” because it completely described their lifestyles with their media paychecks (i.e, not large.)

    The office parking lots were filled with Corollas, Civics and Saturns for the worker bees, and Camrys and Accords for the managers. They drove these things till the wheels fell off.

    Fiscal responsibility was part and parcel to the office culture. Environmental sensitivity was already going on with recycling bins for plastic bottles, aluminum cans and paper.

    These are the people who should be rewarded through a “Cash for Clunkers” program. But because they drive cars that aren’t EPA clunkers, they can’t.

    And now that econoboxes are hot because of market manipulation by the government, if anyone of these people (the ones who are left) needs to replace their aged econobox, they’re gonna get hosed because demand is high.

    Oddly enough, nearly all of them are Obamians.

    So how’s that for unintended consequences? Mr. Obama’s most staunch supporters are getting taken up the dirt road.

  • avatar

    On a personal level, I’m VERY pissed off that my tax dollars are being used this way.

    From a strictly “business” perspective, I have to believe that this program will only ADD to the overall demand for autos on a very marginal basis. What I expect it will do instead is to pull ahead demand in the short term which will be followed by a significant drop in demand once these buyers have their new car. Short term heroes, long term fools.

  • avatar
    Aloysius Vampa

    It makes me sick thinking about all the useful cars that are being completely destroyed.

  • avatar


    Interesting argument, but the US debt to GDP is more like 350% at the moment:

    I’ve read the studies on the Japanese study long and hard and again, there is some legitimacy to the argument that Japan waited far too long to begin its massive stimulus. There is one major assumption being made here, however: that stimulus will take us back to the bubble era. The problem we face is a DEBT crisis, not a solvency crisis (well, as of now, at least). Our problems are not caused by over-production and under consumption. Our crisis at the moment is a solvency one highlighted by that debt to GDP chart shown above.

    This is the major problem with the policy solutions to date: government has approached the problem as if it were a run of the mill recession, fixed by pumping massive amounts of liquidity into a system that is literally drowning in excess credit.

    The only way to solve a solvency crisis is:
    1. Pay down the debt
    2. Consume less
    3. Save more

    Credit crises/normal recessions are fixed by:
    1. Increased liquidity
    2. Loose monetary policy

  • avatar


    I was talking gov’t debt.

    As you can see from that list Japanese gov’t debt levels are nearly 3x as high as ours.

  • avatar

    TexN is spot on about pulling ahead demand. This is the same net effect that the GM, Ford and Chrysler rebate mania had in the aftermath of September 11th when they were basically giving cars away.

    The credit deflation we’ve seen over the course of the last year from, what, 17 million cars per year down to around 10 million has shown what the TRUE demand for vehicles, sans easy money, really is. Same for homes – once the funny money disappeared and people were forced (shock!) to put 20% REAL CASH down and have credit scores that reflected reality, not ‘fog a mirror standards’, the brakes hit home sales hard.

    Artificially boosted sales are great in the short run but are unsustainable and damaging long run. What we’re seeing is that our economy is increasingly looking like a bubble economy where we move from one bubble to the next, with each bubble increasingly large and scary: the tech bubble, the housing bubble, the commodities bubble and right now…probably a Treasury and/or equities bubble.

    When you stop making real things and spending real money everything gets distorted. That our government wants to propagate an unsustainable bubble is criminal.

  • avatar

    OK, I want one of those “My other car was crushed by the Government” plates. (I want to put it on the front of my scooter that I ride to work!)

  • avatar

    Permanent CFC is a subsidy, and a back-door way for the government to own the car companies and control the behavior of the American people.

    It makes the notion of American Leyland look quaint.

    +1 bluecon – The USSR really was one big long painful government stimulus package. Which didn’t work out too well.

  • avatar

    I guess I’m not seeing government control in paying me twice what my tired, unused van would otherwise net me on a trade (and trade in a high mileage but otherwise good 30+ mpg compact car for some poorer person to boot) in exchange for a new car that will enable me to go to my good job to continue to pay the taxes required to fund the CARS and other gov. programs… uhhh, I seem to be going in a circle here. Anyway, I see it as just enabling me to do a one time deal that would not happen otherwise, and without the same degree of pain, for some time in the next year or so. Car salesmen and women have to eat too!

  • avatar


    More cherry cars like this one…

    …can now be destroyed.

    This program is beyond idiotic.

  • avatar


    “see the price of college tuition the last 20 years if you want an example: as government subsidies and loan backing increased the demand for college, colleges turned right around and increased prices because they could (knowing that the government would simply boost the amount they would make available/guarantee).”

    Just wait till the “poor” (and everyone else eventually) has “free” health care. The prices WILL go up. Remember when dentists were the lowest paid health care specialists and pediatricians were the lowest paid medical doctors? That’s because they weren’t generally covered by insurance. They used to advertise their prices to attract prospective patients (also known as CUSTOMERS, fee markets anyone?). Now that they are moslty covered by insurance the prices have been steadily increasing. This will cause a never ending price spiral and we will have to pony up, “for the children”.

  • avatar


    As a car lover and engineer, that video actually brought a tear to my eye and angered me more than I thought it would. The whole CARS program seemed detestable to me, but now having seen the fruits of this misguided attempt to provide economic stimulus, I’m almost disgusted beyond words.

    I couldn’t believe my eyes when I read the “disabling procedure”, and now seeing in action has made me see red.

    I like to believe that cars have a soul (however illogical that seems) and that this will somehow come to bite the creators of such a stupid program in the ass.

    Honestly, watching that video was like watching somebody kick a puppy. I almost wish that Volvo would have erupted into a giant ball of flames just to make people think twice about such a stupid program.

  • avatar

    Just wait till the “poor” (and everyone else eventually) has “free” health care. The prices WILL go up.

    So the solution is to do away with the insurance scheme and institute single payer, isn’t it? Don’t be shy, carry out the logical thinking to the end.

    First, anytime Congress and the White House see an opportunity to take tax dollars and give them to somebody who can vote, they will do it . . .

    Second . . . [it’s] an irresistible opportunity for the Washington politicians and bureaucrats to expand their power and perogatives over the rest of us . . .

    This guy’s a real tard. The election of officials is generally paid for by corporate and wealth interest.

    Notice the telltale signs of that manipulation in his assertions: alienation of the population from their representatives, indignation that tax money is not being payed to the wealthy instead.

    Don’t be dumb, don’t fall for this crap.

  • avatar

    Rod Panhard,

    If I could look at it like that then I would be laughing my arse off.

  • avatar

    Japans debt is about to hit 200% of GDP. The US is at about 60% debt held by the public. How did things in Japan get so out of hand? They waited too long to before they began their simulus.

    Maybe, but I don’t think that’s been established as fact. I’ve read plenty of analyses that suggest that the failure was due to the general uselessness of the projects themselves and to the standard pork and payola that one expects to accompany a government redistribution of the productive’s money.

    Not saying your assertion is wrong, just that it may be one of a host of factors which determined the outcome of Japan’s stimulus efforts. I believe they also raised taxes when they started to get concerned about the deficit, which some believe killed the initial stimulus momentum. Sounds eerily similar to some other things I’ve heard in the news…….

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