Cash for Clunkers, Revisited

Jeff Jacoby of the Boston Globe had a great article following up on the Cash for Clunkers fiasco:
"'Clunkers,' a classic government folly"
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/09/01/clunkers_a_classic_government_folly/

There's not much more to say. Anyone with a brain knew from the beginning that this was a horrible program. So file this under the "I told you so" column.

Nonetheless, here are some highlights:

"The price of 'pre-owned' vehicles has climbed considerably over the past year."

"...the supply of used cars is artificially low, because your Uncle Sam decided last year to destroy hundreds of thousands of perfectly good automobiles as part of its hare-brained Car Allowance Rebate System — or, as most of us called it, Cash for Clunkers."

"Congress and the Obama administration trumpeted Cash for Clunkers as a triumph — the president pronounced it 'successful beyond anybody’s imagination.' Which it was, if you define success as getting people to take 'free' money to make a purchase most of them are going to make anyway, while simultaneously wiping out productive assets that could provide value to many other consumers for years to come. By any rational standard, however, this program was sheer folly."

"To be sure, Cash for Clunkers gave a powerful jolt to car sales in July and August of 2009. But it did so mostly by delaying sales that would otherwise have occurred in April, May, and June, or by accelerating those that would have taken place in September, October, or later. 'Influencing the timing of consumers' durable purchases is easy,' Edmunds CEO Jeremy Anwyl wrote a few days ago in a blog post looking back at the program. 'Creating new purchases is not.' Of the 700,000 cars purchased during the clunkers frenzy, the estimated net increase in sales was only 125,000. Each incremental sale thus ended up costing the taxpayers a profligate $24,000."

"Even on environmental grounds, Cash for Clunkers was an exorbitant dud. Researchers at the University of California-Davis calculated that the reduction of carbon dioxide attributable to the program cost no less than $237 per ton. In contrast, carbon emissions credits cost about $20 per ton in international markets."

"When all is said and done, Cash for Clunkers was a deplorable exercise in budgetary wastefulness, asset destruction, environmental irrelevance, and economic idiocy. Other than that, it was a screaming success."