Cash for Clunkers, RIP
The politicians who conjured up the "Cash for Clunkers" megaflop have illustrated how unhinged they've become in the quest to plan and control every facet of the U.S. economy. These are the same people seeking to control your health care.
On July 31, 2009, the Cash for Clunkers program went kaput when the cash tank ran dry only one week after it commenced. Media reports about the lack of funds available to continue the program dominated the morning news.
Just hours after these reports appeared in the press, the negative spin in the media came to a halt after embarrassed politicians huddled and plotted, and then they announced that Congress had just voted to refill the Cash for Clunkers trough by transferring $2 billion in emergency funds from a renewable energy loan guarantee included in the economic stimulus package. It is a classic example of the failure of centrally-planned government policy
Yet despite running out of dough and leaving dealers high and dry with substantial backlogs in processing clunker rebates, the Cash for Clunkers program was consistently pronounced a success.
House Speaker Nancy Pelosi declared success because it exceeded its environmental targets, even though her assertions were never quantified. The president's administration proclaimed success because the car purchase incentives were improving overall vehicle mileage and giving a "timely, temporary and targeted jolt to the economy." Transportation Secretary Ray LaHood maintained that success was achieved because new vehicle sales increased.
AutoNation, Inc's CEO and Chairman said the program was a "huge success" since it spurred sales for his chain of dealerships, the largest in the U.S. (His comment serves as a good reminder to be skeptical of corporate cheerleading for any government-subsidized programs.)
In short, it was typical political speak to intentionally obscure facts and definitions. Whereas businesses within the free market gauge success and failure through the unambiguous means of profit and loss, the government determined "success" for its clunkers program by way of undefined, arbitrary statements and a temporary increased consumer demand for government-subsidized goods.
At the same time bureaucrats were celebrating the success of Cash for Clunkers, the program's head cheerleader, Transportation Secretary Ray LaHood, refused to release relevant data that would substantiate White House claims about the program's accomplishments.
In the process, the United States government undertook the destruction of property in the name of stimulating the economy. The politicians who created this mess for the benefit of their strategic political allies did not give a single consideration to the economic distortions this program would trigger.
September 30, 2009
Karen DeCoster [send her mail] is a libertarian accounting/finance professional and writer. She rides a Harley, shoots lots of guns, and buys Boston Legal DVDs. She likes to put in long miles on her hybrid bicycle, lift heavy weights, use the crock-pot, overindulge on Gouda cheese, do primal workouts, play Frisbee, get lost in the woods, and hang out at Bass Pro Shops. She won't trade in her clunker for cash and it is highly unlikely that she will become a Czar in the Obama administration. She openly advocates resistance to the current regime in power. This is her LewRockwell.com archive and her Mises.org archive. Check out her website.
Copyright © 2009 Clare Booth Luce Policy Institute