Cash for Clunkers – Another POS Bill.

Published: May 13, 2009

I’m a great believer in the old Otto von Bismark saying that you ‘should never see sausages or laws being made’. It’s likely to be more than a little unsettling and will forever change how you view the end product. Most citizens are spared that up-front exposure to legislation, getting only to suffer the consequences. But being in Washington DC brings it closer to home – and sitting through some of the excellent seminars and meetings NAR puts on definitely gets us up close and personal. Unfortunately it does bring on a case of the queasies – especially when you know these people are messing with OUR lives and are seemingly clueless on the process and the outcome.

waxmanYesterday I did a long post on the so-called ‘American Clean Energy and Security Act of 2009’ being considered right now at the behest of California Representative Henry Waxman. (Rep. Waxman is a slimy guy. He is not only physically ugly, he is ugly on the inside, too. His reputation on Capitol Hill is one of vindictive behavior towards anyone who doesn’t follow his demands. He has been referred to as not only the ugliest but one of the meanest politicians ever.

Today I’ll look into another couple deeply flawed bills that, in spite of being pieces of crap, will probably go forward.

If you’ve read the paper the past couple days you’ve seen where the government is proposing to provide automakers with vouchers up to $4,500 in the so-called ‘cash for clunkers’ bill. It’s called the ‘Drive America Forward Act’ (ya gotta love these made-for-the-media names). If you take a car that you’ve owned for at least a year that has a combined estimated fuel economy of 18 MPG or less , and trade it on a new car costing $45,000 or less that gets at least 22 MPG (20 MPG for SUV’s), the dealer gets $3,500. An improvement of 10 MPG nets the dealer $4,500. The goal is two-fold – get old gas guzzlers off the road and stimulate auto dealers.

Sounds like a winner – so what’s the problem? Well, the problem is it’s a bill that would borrow billions to benefit a single industry and a single class of consumer who made the decision to buy fuel inefficient vehicles. For example, the owner of an SUV that gets 18 mpg would get $3,500 toward the purchase of a new SUV that gets 20 mpg. But somebody who made the decision to buy a more fuel efficient automobile years ago that gets 26 mpg could trade into a Toyota Prius at 46 mpg or similar vehicle and not get a dime.

A fair use of your tax dollars?  Likely to have a major impact on fuel consumption?

Now consider part two – stimulus for auto manufacturers. According to USA Today, of the 10 most fuel efficient cars in America for city driving, only the Ford Escape Hybrid is manufactured by one of the Big Three. When YOU think of fuel efficient cars, does an American made car figure into your top 3? Top 5? Top 10? Exactly. And with Chrysler already in BK and GM teetering, are you going to gamble your cash that they’ll be around to service you next year? Or do you gravitate to one of the proven performers like Toyota or Honda that have been ion the fuel-efficient car biz for years and will probably still be in it a decade from now?

So will this bill save the American auto industry? Put millions of people back to work? Keep those inefficient dealers from closing?

Let’s see, the government will borrow $4 billion to encourage you to buy a new car that may be less than 10% more fuel efficient than your current wheels. You only get to benefit if your current car is a guzzler to begin with, and 9 out of 10 times your replacement car will probably be a foreign car, not helping the domestic auto industry at all.

Yeah, that’s a good bill. It’ll sail right through. You can thank Sen. Debbie Stabenow (D-Mich) for this POS.

Last modified: May 13, 2009 at 11:22 am | Originally published: May 13, 2009 at 11:22 am
Printed: September 22, 2020