Ah, but he misunderstands. The point of wealth redistribution isn't to be fair. It is all about the power to redistribute wealth.

My 1990 Buick gets 19 mpg according to the charts. Better luck next time.

So, all these people trading in their "clunkers" are going to go from not having a car payment to having a car payment. Americans don't have enough debt, apparently.

yup, mi madre's beloved 4runner only qualified because it had the automatic trans... and she bought a Scion xD which gets rouly double the miles in town and even better on the highway... Luckily she got in under the first deadline. But. Pretty much everyone feels that it was a less than smart plan anyway. Why make an age limit on the car? In the western US there are a LOT of pre '85 cars still around and almost all would qualify, AND be better to get off the road from a pollution standpoint.

Other than that... "Who (again, unlike us) is ready to shell out five figures for a shiny new car." uh, hyperbole much? I'd have to bet most people that took the program, especially based on the kinds of vehicles sold, took out a loan to do it. If people already had the cash to pay, they prolly woulda before this. The fuel savings alone would make it worthwhile.

I don't abide much with the program, but lets talk size of the gorilla.

It's only going to be $3billion in total. OI! can't believe I said it that way, but there it is. This is a drop in the bucket compared to a lot of the other new programs that are coming on line.

Almost like it was designed to divert attention from them.
huh. imagine that.

It's a bribe to placate people.

Apparently, it's working. I knew this was a bad thing when I first heard about it.

Bread and circuses.

This was also a Keynesian stimulus of a moribund industry. More than helping the environment, it was about creating demand for new cars.

There are a lot of interesting comments here.

However, it's worth noticing that fuel economy on the average vehicle traded in has improved 60% cash for clunkers. That's well above what the govt predicted when it started this program. It means a bit less pollution. Cleaner air. Etc. And not just from these vehicles, but from the trend that it encourages.

The reason the average is so much higher is because people are trading in trucks and SUV's for cars. They could trade in for more fuel efficient trucks, but they're not. They're buying Ford Fusions, not F-150's.

This is interesting in that it will bring down the overall bulk of the vehicles on the road. Which means OTHER drivers, who before would have bought an SUV or a CUV because that's what the road was made up of, might now - in a Malcolm Galdwell Tipping Point sort of way - feel encouraged to buy a more fuel efficient car. If you don't believe that people's actions encourages other people's actions, just count the Priuses in Santa Monica.

My wife bought an SUV in 1998 because she felt surrounded by them on California freeways, had she been surrounded by cars I think we would have stuck with our little old fuel efficient Chevy Sprint. Data point of one, but I think it's a valid one.

It's easy to be cynical, especially when it relates to government programs. As for the argument that we are paying for a clunker program that many of us won't use, either because we already drive fuel efficient vehicles, well, that's ignoring the entire idea of how a society works. I pay for medical research into women's health issues even though I'm a man, I pay for Mars research even though Mars means nothing to me, I pay for books in the Library of Congress I'll never read, I pay for nuclear weapons I will never get to fire and my taxes pay the salary of Senator Selby even though, far as I can tell, he's a complete buffoon.

tjb -

It is not the government's job to direct people's purchasing decisions, although they continue to do so with the tax code, and now with their "cash for clunkers" program.

Various politicians have been proposing ways to get older cars off the road for decades, mostly as a sop to the auto industry and the UAW.

They've finally found their way to do it - by taking my money and giving it to someone else to buy a car that the government would prefer they drive.

That chaps my ass just a bit more than the space program. Because unlike the space program, I don't see us getting any useful innovations from C4C.

Phbbbbbt. I don't give a rat's ass what other people drive. I just don't want to buy their cars. If I hate that the government is forcing me to do so, that's not cynicism. How about you go make me a sammich and pay for the "organic" ingredients yourself. And no complaining.

And not just from these vehicles, but from the trend that it encourages.

What only trend it encourages is the trend to give away other people's money to lucky clunker owners.

"The" only trend it encourages ...

Actually Brian, the federal government spends a good portion of its time, through a wide variety of methods, directing, controlling and influencing people's purchasing decisions. We have sin taxes so that people will be discouraged to buy fun stuff, we have farm subsidies so that we can fill ourselves up with corn syrup, we have tariffs so that people will buy things made in the US of A. For good or ill, that's what our government does. Republicans do it and Democrats do it. Every single day. It would be interesting if it all went away just like that. Poof. If it did, I think you would find you had just been bought by China.

And I'm glad you like the space program for its useful innovations. Me, I bet we could have come up with Tang all on our own without having to pay to blast the atmosphere with 1.62 million gallons of liquid hydrogen, liquid oxygen, powdered aluminum and ammonium perchlorate but that's just my opinion.

As for "Pirate Joe," I agree. I don't want to buy people's cars for them either. I also don't want society to collapse so we wind up chewing on our neighbor's skulls. We live in a complex web that is probably a lot more fragile than you or I imagine. Having watched my 401k evaporate last fall, I'm pleased to see the Dow returning to some sort of stability and I am thankful that our leadership, both Republicans and Democrats, have been working hard to keep things from totally falling apart.

But if it makes things square for you Jo, I'll happily make you a sandwich. My treat.

tjb:

Me, I bet we could have come up with Tang all on our own without having to pay to blast the atmosphere with 1.62 million gallons of liquid hydrogen, liquid oxygen, powdered aluminum and ammonium perchlorate but that's just my opinion.

Too bad Tang predates the space program.

However, there are a great many things that were either created for or had the state of the art advanced by the space program. A short list:

Integrated circuits, digital computers, group programming methodologies, radio communications, plastics.

I think it's fair to say that absent the space program, we probably would have taken an additional 10 years to get to even an IBM 360 level of computer complexity. You and I would not be having this conversation because the Internet as we know it would not yet exist.

I also don't want society to collapse so we wind up chewing on our neighbor's skulls. We live in a complex web that is probably a lot more fragile than you or I imagine.

Well, every day that the socialist (sorry, progressive) numbskulls in DC remain in power, we come one step closer to that collapse. And either they know it and seek it, or they don't know it and don't care.

The government is the source of pretty much all the financial problems we have right now. Allowing them to create new problems by stealing other people's childrens' futures under the guise of solving the last batch of problems they created? Not so good.

I'm pleased to see the Dow returning to some sort of stability and I am thankful that our leadership, both Republicans and Democrats, have been working hard to keep things from totally falling apart.

This by you is stable? If you think that the politicians have been working hard to keep things from totally falling apart, you aren't paying much attention.

They fucking CAUSED the crash, just as surely as they caused the fraudulent rise to 14,000.

And now those smirking idiots have the nerve to say that they saved the economy from certain disaster by setting it up to completely immolate itself at some unknown future time?

Spare me.

After seeing some of the folks who used the “cash for clunkers” program being interviewed, I have one question. How many of those folks will have their new car reposed within a year or two? My gut feeling is that many who are rushing to the dealers for the rebate check can’t really afford the new car they’re driving home in.

My gut feeling is that many who are rushing to the dealers for the rebate check can’t really afford the new car they’re driving home in.

And your gut is going to be proven right in about a year, year and a half. Same as my gut. I knew this was a Bad Thing. I knew it!

Look, anyone with half a brain can see what's going on here.

The last bubble popped, time for a new bubble.

Government is incapable of just letting things be. They crave accolades for making everything awesome again.

Those days are gone. Let them stay that way.

The cash-for-clunkers program is working, and should be extended.
Funny, a $1 billion program, and the right-wing goes looney-toons. It is a sunsetted program, even if it gets extended. Not so bad.

$1 billion is 1/185th of the cost of the AIG bailout.

It is 1/1000th the cost of our effort to "build" an Islamic-socialist-fascist-crony state in Iraq.

It pales next to the annual and regular payments in the tens of billions going to farmers from the USDA.

The right-wing is getting pinch-faced about this? A $1 billion program that actually seems to be boosting US auto sales, at the bottom of a recession?

Jeez, the right-wing is marginalizing itself. Remember those clever cartoons in the margins of Mad magazine? See you there.

er TJB? There are 260,000,000 cars in the US... and this program is going to remove and replace 250,000 of them. I presume you can do the math. Blip is the word used. This is a blip.

"I don't want to buy people's cars for them either. I also don't want society to collapse so we wind up chewing on our neighbor's skulls."

Well, yeah, ya know - if you don't buy people cars with your tax dollars, next thing ya know, they're over at your house, chewing on your skull.

We should make a song, 'Chewing on Your Skull,' to sing to the tune of 'Whistle While You Work.'

"... the federal government spends a good portion of its time, through a wide variety of methods, directing, controlling and influencing people's purchasing decisions."

Yes, exactly - you seem pretty well-informed on this odious practice, since you go on to list some of its more irritating instances of meddling. When I got to this part:

"It would be interesting if it all went away just like that."

I was agreeing with you. I would use the word "wonderful" instead of "interesting," but it would be interesting, too.

Not sure how you made this leap, though:

"If it did, I think you would find you had just been bought by China."

It is precisely all that government borrowing that has put us at China's mercy.

For the record, I am against:

The AIG bailout,
The Iraq war,
Farm subsidies,
AND the Cars for Clunkers program.

*Cash for Clunkers program. Whatever.

Ah, it was the Government who caused the crash! Thanks! Good to know! Now help me out, was the government that passed repealed the laws that had kept banks from expanding their powers or was it the government that failed to provide adequate oversight or was it the government that had too many regulations or was it the government that meddled with too much oversight? Was it Bush or was it Clinton? Was it the democrats or was it the republicans? Who are you aiming your spite at?

It was the lack of the SEC's oversight. Bernie Madoff said there were many times when he was being questioned by the SEC that he thought they had finally caught on to him. That they didn't just made him all the more greedy and bold. The government chose to look the other way, and put we the people in jeopardy by bailing out the big 3, AIG, etc and so on. They aren't doing US any favors, just themselves. Time to clean House. And the Senate.

I'm going to try something novel here. I'm not going to respond with a stream of obscenities.

If you'd been paying attention, you'd see what happened.

Late 1970s, Congress passes and Carter signs the Community Reinvestment Act, which was intended to eliminate race as a basis for home loan refusals.

Over time, through legislation and regulatory agencies, and under pressure from certain groups, the banks were required to show that more and more loans were being given to people, often with no evidence of potential repayment.

This was solidified during Clinton's tenure with an update to the CRA that gave the FDIC and the federal government the ability to penalize banks who didn't meet certain "guidelines". Two guesses what those guidelines entailed.

Furthermore, we had the Democrats forcing Fannie and Freddie to buy ever riskier loans, which led to the creation of the "collateralized debt obligation" and the "mortgage-backed security". The CDO and MBS business exploded amongst the investor class because these instruments were (1) improperly rated by rating agencies who were strong-armed by government regulators to grant AAA ratings and (2) carried an implicit government backing.

Economics teaches us that behavior that is rewarded is repeated. When people were making money hand over fist on these dodgy instruments, the housing market exploded. Banks were writing loans to anyone who could fog a mirror - after all, F&F could not say no to any loan they wanted to sell.

So now F&F are left holding the bag for every dodgy loan that every slick mortgage broker and bank could write. Loans that would never have been written without government interference.

And then people started to default. And the investment guys and insurance guys (that would be AIG, mostly) realized all of a sudden that they had no idea just how much of any given mortgage portfolio was high-risk.

And so because of a confluence of bad policy, bad practice, and outright fraud, it all came tumbling down with the help of a little rule called "mark to market".

Suddenly, the value of all the CDOs and MBSs and CDSs (credit default swaps - AIG) dropped like a rock. Investment banks holding large positions in these instruments were wiped out by capitalization regulations. Companies who carried significant portfolios of these things saw their stock values tumble.

So, yes. The government is directly responsible for both the housing bubble, and the credit crash. Because the government is made up of people who seem to think that they can legislate life into being nice.

I have a friend in the same boat as Welch. He has a '94 Honda Prelude that gets decent gas mileage but the clutch just went. By any reasonable definition, it's a clunker. Unfortunately, because of the gas mileage he gets (or COULD get, if the car could go frome here to there) disqualifies him for the Clunkers program.

As for myself, my wife and I didn't have the foresight to wait for an expensive tax-subsidized boondoggle, so we traded in our Jetta for a RAV4 (take THAT, environment!) back in February. You know, using our own money, instead of taxpayer money.

Of course Dems are touting this program as "widly popular." Apparently they have bothered reading the polls. Oh, I'll guarantee it's wildly popular with the folks getting free money. Not so much for the rest of us footing the bill.

TJB,

"Who are you aiming your spite at?"

I would suggest you aim it at the entire political establishment because this is entirelely the gov'ts fault and they don't want the party to end. Here's how the scam works:

The gov't wants to socialize everything so the poor can have access to everything the rich have. So they have their social programs. Of course, being bureaucrats, they spend more than they earn which leads to debt. Massive debt. You can't keep running up debt forever because creditors will demand a higher rate of interest.

Now, how the gov't pays the debt down is the question. You can either raise taxes, lower spending, or monetize the debt. Gov'ts almost always choose to monetize the debt; which means they require central bankers to be on board. Which they almost always are. The central bank starts buying a whole bunch of gov't debt that lies on the banks' balance sheets. How do they pay for this you ask? No problem! They create the money out of thin air. That way, they can retire the debt without having to go to outside creditors. Problem solved!

Not quite. This whole process is inflationary. Inflation screws over domestic creditors while the fall in the US dollar slams foreign creditors. But it also hurts the poor, savers, and those on fixed incomes. The very people gov't is supposedly trying to help.

So now you have all this excess liquidity sloshing around in the system. That liquidity has to go somewhere. In this case, as Brian described, a whole truckload went into the housing market because that's what gov't was socializing the most. A massive bubble ensued. It also went into commercial real estate, copper, oil, zinc, etc. creating other bubbles. Of course, by the time all this money trickled down to lower income individuals, they bought their houses at the top of the market and got screwed.

It's the gov'ts fault tjb. I suggest you stop listening to the gov't rhetoric and start doing some independent analysis.

Yeah, I don't know what tjb spends his time reading, but the fact that the government owns the lion's share of the blame for the housing crash is pretty common knowledge. The vast majority of economists and finance people who are knowledgeable about this subject say the same thing. The tinfoil hats are for the American Idol-watching people who don't realize this.

The money one can get via cash 4 clunkers is a pittance compared to the massive tax breaks one could get for buying huge expensive gas guzzling SUVs after 9/11. An the entire expense is nothing next to the money handed out to save Paulson's old Wall Street buddies and the AIG criminals. Outrage over the present program is ludicrous.

Nice bit of writing Brian. Add in the mortgage interest tax deduction to fill out the picture.
Canada does not have the mortgage interest tax deduction, and its housing bubble was far less pronounced.
We are the most overhoused nation on earth. Our industrial base is dying.
This does not look good.

I didn't say that the government didn't cause it, I only asked WHICH government caused it. FDR's? Hamilton's? Bush I? Bush II? The Bush government when he controlled both the House AND the Senate? Clinton? Obama? Adams? Our is it just the idea of a Government you object to? And if so, which parts? Interstate Highways? Education loans? The National Institute of Health? The Smithsonian? The Coast Guard?

As usual, stupidity from the left.

Note I was against bailing out ANY companies, also. How about leaving our money in OUR wallets for US to spend as we see fit? Why is that such a radical idea?

http://www.vimeo.com/434919?pg=embed&sec=434919

tjb:

I only asked WHICH government caused it. FDR's? Hamilton's? Bush I? Bush II? The Bush government when he controlled both the House AND the Senate? Clinton? Obama? Adams?

I believe I answered that. The answer is "Yes". Well, except Adams and Hamilton. And you missed Carter. He was a big, big part of it.

FDR pioneered the idea of government meddling in the lives of individuals.

Carter was the one who started the ball rolling with the CRA.

Bush 41 was fairly useless, and did nothing to stop the growth of government interference.

Clinton actively advanced the state of the art in government distortion of the markets.

Bush 43 perpetuated the problems by pushing his "ownership society", while not using the bully pulpit effectively to point out the impending collapse of F&F.

And Obama is only making things worse, by using the stimulus and TARP to force the banks to make even MORE ill-advised loans.

Oh, and nice use of the anti-government straw man.

What the government has done is to reduce the pool of affordable used cars, affordable used parts (note the destroying of perfectly good engines and transmissions and removing other parts availble to the independent/home mechanic), and reduces the ability of independent mechanics to earn a living repairing older cars. New cars under warranty are not repaired by independent mechanics.

A clutch that needs replacement is not a sign of a "clunker" but a normal item that wears out from use (or misuse like some of my friends seem to have a habit of doing). One needs to think of an auto frame like an aircraft frame, both of which can have a much longer life than the mechanical components attached, which should be replaced on a normal basis.

If the government wanted to really help the people they'd make the leasing companies give the 99 buck a month leases to the poor, not the rich.

I do all my own auto repairs as I do a better job than dealers or independent mechanics, do it a lot cheaper, and do it in a manner convenient for me.

Bread and circuses indeed brian

Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses - Juvenal 200 AD

It it's upped to $3B then its 660K cars.

All of you are looking at those of us who bought SUV's and pick-ups as idiots who just didn't care.

Some of us did it for a reason. In my case, have you ever tried to fit a wheelchair in a Cavalier? It can be done, but it is a fit.

Then I moved out of a crappy apartment in the city to a truly rural environment. I got my 4WD drive while my lady was alive, and my farmer neighbor's tractor was used to pull the township plow out of the snow for the third time in two winters.

Now my circumstances have changed. I'm still rural, but my lady passed. I can afford to have one little car trapped for a quarter of the year. I also don't need to carry a wheelchair in a Yaris/ Prius/ whatever.

It gives me a choice I didn't have three to four years ago.

I refuse to feel guilty about it.

If both vehicles were paid off, I might do it. But I'd rather use the money for something else.

I drive a Mini.

That is all.

Do you feel safe in it?

So, once again, those of us who were prudent and bought a car we could afford to operate (or a house we could afford to maintain) must pick up the bill for those who over-reached.

Cash-for-clunkers is indeed very "popular."

Of course it is. When you rob the Peters of the world to pay the Pauls, you're very popular with the Pauls.