Quote of the Day: Cash for Clunkers Post Mortem Edition
The Cash for Clunkers program is finishing its final weekend. By all accounts, the program has been a tremendous success, driving traffic back into tumbleweed-strewn showrooms, helping to cool the planet and reanimating idled automobile factories. Well, not by ALL accounts. The Wall Street Journal leaves no word unminced in its evisceration of the C.A.R.S. program: “The idea that a temporary subsidy program will launch the auto industry onto some new, higher sales and production plane defies logic.” As we shall see—or not—come September. Meanwhile, the media’s fixation with the NHTSA’s inability to send dealers rebate checks within a few weeks defies logic. For one thing, dealer ineptitude. For another, the NHTSA had three weeks to set up [what turned out to be] a $3 billion program. And lastly, it’s the federal government. What did anyone expect? Prediction: the dealers will get their money, the industry will gloat over August’s sales figures, and then it’ll be back to non-business as usual, until the housing market recovers. Whenever that is.
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Dave M: I'm currently negotiating for a CPO car and find I have a ton of leverage. They weren't eligible for C4C, and the flood gates for off-lease '07's are about to open. You can name your price.
No point in arguing the unknown as the evidence will be in in the next couple of months. It will then also be interpreted a minimum of two entirely different ways for another few. Did they sell less than expected in Sept because of pulled up sales, or lack of inventory? Me, I think the program helped a lot more than many want to give it credit for. Pull up sales? Well if you define a pull up as "from the day after hell freezes over" to now a pull up, it sure pulled me up. Wasn't thinking about, and definitely did not need a new car. Getting me to open my normally locked tight wallet and put some money into circulation should have a positive affect on the over all economy.
Reports are inventory is low. So the factories will need to crank out more cars. That means employees and vendors get paid. Sounds like it is working as intended.
The issue with this, as with all distortion-causing behavior, is why not more? If we all agree that the enviro aspects of this were negligible, then why limit the stimulus to clunkers? And why stop now? If $3 billion for a very limited pool of buyers was good, then $30 billion for everyone should be great, no? Hell, why not $300 billion split between the bank accounts of every voter? Surely that would get things going!