What's Wrong With This Picture: A Giant Clunking Sound Edition

by Edward Niedermeyer

Published: June 4th, 2010

what s wrong with this picture a giant clunking sound edition

Anyone still feel like arguing that Cash For Clunkers was a good use of nearly $3b? [ Coyoteblog, via Instapundit]

#3WTP #Cash-for-Clunkers #Government #Incentives

Edward Niedermeyer

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Braven on Jun 04, 2010

To mtymsi, Please read my post again. I never said it did nothing for the economy. Also, there is a lot more data to look at than the data you mentioned. Why would or should anyone feel good about spending that kind of money on something that has a temporary effect? It makes no sense. This was, IMO and many others, the most poorly planned and executed government program in years. Quick yes, correct no.

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- Mtymsi on Jun 04, 2010
  
  Again, C4C was never intended to provide a long term benefit to the entire economy. It was intended to provide a short term boost in auto sales which it did. The program did exactly what it was intended to do and in fact was much more successful than anyone thought it would be which is why Congress had to allocate additional funds to it.
  
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- Mtymsi on Jun 04, 2010
  
  Also, as mentioned I did see a direct benefit from C4C in my local economy. If I lived in a different part of the country I may well feel differently about the program. It put people back to work when the outlook couldn't have been bleaker. The amount spent on the program is such a tiny fraction of the economic stimulus package it is almost invisible. Look at the amount the financial sector received versus C4C. C4C provided a glimmer of hope when there was none especially in my area.
  
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- Braven on Jun 04, 2010
  
  If your argument is that it was a good program to provide a temporary boost in car sales, then I would have to agree with you. But $3B for a temporary boost? Are you kidding me? What good is a temporary boost when we need a permanent cure? What good is this boost if it causes all kinds of unintended consequences that significantly hurt other industries and people? Congress loved it because it boosted sales, but they never looked past that to all the things is hurt. When you look at it as a whole (see my post above) it was a miserable failure. More importantly to me, I resent the use of my tax money to help only a portion of the population, and even more the domestic car companies. The manufacturers themselves in combination with the government caused their own demise. Why should I pay for that while I struggle to survive myself? Why couldn't I turn in under this "great" program, my 6mpg crew cab dually for a new more efficient vehicle? Fail.
  
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- Mtymsi on Jun 04, 2010
  
  IMO you can't quantitatively measure the $3B cost against the results because there is no data or results for what would have been had their been no C4C. Peripheral things like auto supplier viability come to mind. The fact that you are opposed to C4C on principle is a different argument, one that as I said can be argued all day long but it doesn't change the measurable verifiable results of C4C. I think you need to put everything in perspective. While it is true that the domestic manufacturers are entirely responsible for their circumstances it is also true that the national economy was in no shape for two of the three to cease existence. Had we not been in the throes of the worst economy since the Great Depression perhaps their would have been no federal bailouts. It is also a documented fact that GM and Chryco's demise would have triggered numerous auto supplier close downs, the same suppliers that supply both the foreign and domestic U.S. manufacturers thereby causing a severe ripple effect across both the entire U.S. auto manufacturing industry and the entire economy. As regards all of the other negative effects you claim are the result of C4C the program was meant to aid the auto industry not individuals that would buy the cars that were junked or the parts from those cars. Many of the imported cars sold here are built here meaning those OEM/supplier workers benefited. Dealers benefited directly from the sales C4C created, they would not have been financially better off not to have sold the vehicles.
  
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Mythicalprogrammer on Jun 05, 2010

Not much of anything other than a graph. There's a report that says Cash for Clunkers worked. http://www.maritz.com/Press-Releases/2010/Maritz-Research-Findings-Cash-for-Clunkers-More-Successful-Than-Previously-Reported.aspx Here's a better graph (almost the same with more data): http://delong.typepad.com/sdj/2010/04/wow-cash-for-clunkers-worked-graph-of-the-day-for-april-7-2010.html It's all how you interpret the graph and I think the graph that this blog provided is misleading.

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- Mythicalprogrammer on Jun 05, 2010
  
  I'm sorry this post is similar to when Fox news told everyone that the Nuclear Security Summit's logo looks like Muslim flags. http://tv.gawker.com/5517509/jon-stewart-calls-out-fox-news-for-anti+muslim-nuclear-logo-propaganda
  
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Mike Kelley on Jun 05, 2010

I guess the C4C program worked better than most government programs. Unfortunately, that is not saying much. Just look at the $800+ billion wasted on the "stimulus" program.

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John Horner on Jun 05, 2010

Meanwhile, another $33 Billion was just authorized to send yet more troops into Afghanistan. http://www.thefiscaltimes.com/Issues/Budget-Impact/2010/05/28/WP-Senate-Approves-Emergency-War-Funding-Larger-Aid-Bill-Stalls-In-House.aspx Eleven times more money than the C4C program, yet hardly anyone seems to be upset about it.

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- SCE to AUX on Jun 05, 2010
  
  Yes, in spite of my opposition to CFC, it was 'only' $3 Billion. And if I had been in the market at the time, I would have taken advantage of it also. In the end, the 700k cars bought through the CFC program are only about 7% of the total for 2009.
  
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