Replies to This Discussion

Permalink Reply by Chris Badgett on January 6, 2013 at 1:58am

There's often a hidden agenda to these programs.  As you mentioned, by destroying some of the supply of used cars, it drives up the price of other used vehicles and encourages purchase of an over-supplied new car sector.

Permalink Reply by Liam S. on January 6, 2013 at 3:41am

There are lots of good reasons to criticize the program (the environmental impact for instance), but the op-ed quoted as a source regarding the driving up of used car prices other economic effects is woefully short on data to back up the assertions made.

 

There were 37.5 million used cars sold in the US last year, and many more available than were sold. Taking 750,000 of them out of the market does affect the market, some. But doesn't represent as large a portion of the used car market as the language used would lead you to believe. I would like to see more (any) hard data.

Permalink Reply by Native Son on January 6, 2013 at 5:28pm

The environmental argument was a stalking horse to sell the program.  Sort of like the "shovel ready infrastructure projects."  The obvious intent was to give the impression that folks would only be trading in early 1970's "land yachts," with bad piston rings and broken smog control. 

The real purpose was to deliver several hundred thousand new American cars, thus "saving" a bunch of "good union manufacturing jobs."  Unfortunately, everybody seems to have bought new Japanese or German rides.

Permalink Reply by Liam S. on January 7, 2013 at 5:30pm

Of course, many japanese and german rides are made here now... 

Permalink Reply by Chuck Knight on January 6, 2013 at 5:58pm

A used car, even a clunker that pollutes and gets only 10mpg, is more "green" than a Ford Fusion hybrid, because it's already been manufactured.  It exists, and uses up no additional resources.  In fact, those resources it did use can be amortized across (potentially) decades of use.

 

You need to also be aware that the way they were destroyed removed any value from them, unlike recycling parts through a junkyard.  And the "fiberglass epoxy" stuff they used to render them unsellable, in addition to *its* environmental impact, rendered them very hard to recycle even as bulk scrap metal.

 

The purpose of Cash for Clunkers was as a piece of "feel good" legislation, as with almost everything else in the Democrat playbook, and it sounds good if you don't scratch the surface too deeply.  A secondary purpose was the supposed creation of a demand for new American cars, but those turning them in didn't want American junk.  They bought Toyotas, Hondas, etc.

 

As for your "or did we" question...we did.  Anyone with functional brain cells knew what the effect would be.  In fact, there were even media specials about the effects, both short and long term, financially, economically, and environmentally, produced by most of the Conservative media, warning against this ridiculous scheme.

 

Of course, the liberal elites claimed that they "knew better" and that conservatives were only against it because it would help poor people and minorities...in other words, because conservatives are racist!  (giant wink)

Permalink Reply by Native Son on January 10, 2013 at 9:31am

In a way, the entire "cash for clunkers" program reminds me of California's oxygenated fuel to cut air polution.  At one point gasoline was oxygenated by adding a chemical called MTBE.  Which did cut airborne pollutants.  Unfortunately, MTBE has three problems.

It doesn't burn, so it falls to the ground.

It is persistent, i.e., it doesn't decay.

It is a carcenogin that loves to bond with ground water.

Or why it's no longer used.

Now we have the blended fuel, 10% alcohol.  Turns out that's got a green problem as well,  Actually two 'green' problems.  First, unless the engine is specifically designed and/or tuned to run on it, it's less efficient than straight gasoline, so it takes more of it to move older vehicles.  Second, the production of the fuel-grade alcohol requires pretty hefty direct federal subsidies, the cash is the second green.

  Gentlemen, I know there are multiple subsidies to the petroleum industry.  In the case of the fuel alcohol, it is the additional subsidy.