Cash-for-clunkers mania

August 4, 2009Jon Brooks Comments Off

Before the Cash for Clunkers program got under way, many bloggers wrote about its  imminent failure. The title of a typical clunker-debunker post read something like  “Why ‘Cash For Clunkers’ Won’t Work” and went on to elucidate the failed logic of attempting to incentivize the lemon-driving population.

As it turned out, eager recipients of the $3500 or $4500 government subsidy—offered for trade-ins of low-gas mileage vehicles for a more fuel efficient ride—used up the original $1 billion appropriation within a few days. The House then overwhelmingly approved an additional $2 billion to replenish the kitty, and Senate majority leader Harry Reid says the Senate will do the same this week.

By most accounts, the program has been a success.  Yesterday, Ford reported its first sales increase since 2007, which it attributed in part to the clunker deals, and July sales for the entire industry rang up at an 11-month high. Furthermore, according to Morningstar,  almost half of the new cars bought were from U.S. automakers.

As usual, though, anything related to government spending is going to be spun according to pre-determined beliefs. The Wall Street Journal, true to form, called this further foray into governmental problem solving  “Crackpot Economics.” That editorial drew 194 comments online, most of which, to say the least, did not express undying gratitude for the latest in state largesse. And Another upholder of free enterprise weighed in, too:
Ron Paul doesn’t like Cash for Clunkers

Of course, the Keynesian crowd has taken to the keyboard as well. Over at the Huffington Post, one blogger writes about “Conservative Hating on Cash-for-Clunkers.” The PoliticalBuzz blog claims the program has “saved the auto industry.”

If you really want to get your clunk on, click on over to Twitter and keep hitting refresh on the #clunkers feed, or just do a search. There’s also plenty of opinion to go around on Facebook.  And the Flickr Clunkers Pool makes for interesting viewing. Browse it to an internal sound track: clunk, clunk, clunk

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