Can the Obamabots now admit that "Cash for Clunkers" was a failure?

[Brad]

http://online.wsj.com/article/SB10001424...e_facebook

Remember "cash for clunkers," the program that subsidized Americans to the tune of nearly $3 billion to buy a new car and destroy an old one? Transportation Secretary Ray LaHood declared in August that, "This is the one stimulus program that seems to be working better than just about any other program."

If that's true, heaven help the other programs. Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%. Some 700,000 cars were sold in the summer under the program as buyers received up to $4,500 to buy a new car they would probably have purchased anyway, so all the program seems to have done is steal those sales from the future. Exactly as critics predicted.

Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best "the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day's gasoline use." Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.

The basic fallacy of cash for clunkers is that you can somehow create wealth by destroying existing assets that are still productive, in this case cars that still work. Under the program, auto dealers were required to destroy the car engines of trade-ins with a sodium silicate solution, then smash them and send them to the junk yard. As the journalist Henry Hazlitt wrote in his classic, "Economics in One Lesson," you can't raise living standards by breaking windows so some people can get jobs repairing them.

In the category of all-time dumb ideas, cash for clunkers rivals the New Deal brainstorm to slaughter pigs to raise pork prices. The people who really belong in the junk yard are the wizards in Washington who peddled this economic malarkey.

[justme]

I said this was a stupid program all along.

[bluechristy]

Actually it was a success . It really helped the car dealership in the town where I live .

[JJ]

Aptly put. Cash for Clunkers was a clunker itself!

[Dastardly]

A wall street journal article that slams an Obama program..... wow

And you call us Obamabots!

[ty]

who cares? it's over

[richard c]

Wait until this drastic dip continues into next year....it is setting up for another bail-out.....once on the public dole, it is nearly impossible to walk around with an empty "free" money bag.

[Michael H]

Can they? Maybe the 10% of the Mary Obaminites that aren't t totally brain dead, can admit it within their home. Will they admit it public? NEVER!

[Thedude27]

>Actually it was a success . It really helped the car dealership in the town where I live .


did you even read the article. Sure they are around RIGHT now, but basically its like they took a years worth of payday advances and will not have any money coming in for a while.

[James P]

everyone already know that the next couple of months would be down for dealerships. but hundreds of thousands of the worst poluting vehicles are now off the streets
hundreds of gm, chrysler and ford employees have been temporarily reinstated to jobs now that they need to produce and replace the vehicles sold
the vehicles are not destroyed, the engine is. the rest of the car is parted out (if you ever needed to buy a part for a car for cheap you would know how great of a deal this is)

you seem to only point out the facts you wish to use to debunk a story rather than tell the whole truth