Monday, August 31, 2009
Rebut follow up
This is a follow up to my original cash for clunkers posts. For those that can’t seem to write a comment without racial or ethnic slurs, I moderate my pages on the web and delete that type of screed. If all you want to do is scream F bombs at the top of your voice I delete that type of thing as well. Bring facts to the discussion and the occasional swear is part of the language, shouting obscenities because you have no ideas is par for the conservative cause I find it tiresome.
The program was a huge success. 690,000 cars were sold in a month due to the program but auto sale were pushed above the rate of 10 million for the year for the first time since 2008. This has reduced inventories and sped up production for several auto makers. This was the primary purpose, Temporary filling of the demand gap caused by the recession. Will it last? We will have to wait and see. The car lots here are empty of New small fuel efficient vehicles.
The average fuel economy increase was 58 % from 15.8 to 24.8. We did better at 70% but the total while better than nothing is small in the total scheme of global warming.
I was surprised at the hatred shown for a couple of disabled veterans. The idea that those living on fixed incomes are some how irresponsible. The idea that a couple of guys that took responsibility for defending the nation are not responsible enough to pay their bills seems counter factual.
The economic activity that the program produced was huge but it did point out some problems that need to be addressed.
The contacting out of services has been a total disaster. The private sector is so incompetent that it cannot seem to do anything. that’s right the private sector. All this complaining about bad web site design and poor service should be directed at the Citi Group, a private contractor doing a typically haphazard job just as the private sector always does.
The car dealers that knew they would have to front the cars were typical corporate scum and screwed the consumers to the wall. It was not the government screwing up at every turn but the vaunted private sector.
The Idea that 1.4% of the market would have a devastating effect on a market that was already 22% off seems preposterous on its face. This is the CARS is killing the poor and destroying mom and pop used car dealers.
People are getting rid of all these great cars for the 4500 dollars is the most common lie I come across. In 2005 I bought X good mileage car and my neighbor bought Y gas guzzler and he can trade his in and I can’t get a new car and I am paying for his. Bull from the jump. As you only got 4500 dollars maximum the trades were crap. Every time the blue book proved them to be misinformed ,to be kind ,although most of these sock puppet commenter’s were simply lying to create propaganda.
Could it have been done better? Yes, but large bureaucratic structures are not conducive to rapid movement. The economic modelers are either no good or are not being listened to. The bill was written very craftily to encourage rapid movement and to require the industry to bear part of the risk. The Dealers being skanks was obvious to anyone outside looking in. Car dealers are conservatives, they hate the government that hands them subsidies hand over fist so they want Obama to fail but they will of course profit from it. That and gap financing would have eaten into the profits and good capitalists always externalize the cost. I can understand them not getting this as they are not the kind of people that deal with corporate scum from the bottom.
The not being ready for the panicked rush is about their models. They built in the uncertainty factor to maximize the multiplier effect. They simply would have had to include the line that all compliant deals within the time frame would be honored but they deliberately didn’t. Having taken that step not being ready for a stampede shows that they had a bad model or they ignored what the model told them. We need to find out which. These guys are supposed to be the best around but they can’t do a little math. They had $50 million for overhead, band width and servers are cheap but profit maximization corporations step in on a no bid contract and we will now never be able to find out what the truth is.
The losers in this are not entirely clear but some of the complainers would seem to be attributing things that aren’t there. The charity car market crashed when they stopped allowing you to deduct book value for cars that were trash. As soon as they began only giving realistic deductions the adds went away overnight. The crashing of the used car market was in place long before this program began. The program has not helped it but numbers do not support it.
The arguments against stimulus lost at the ballot box and in the legislature so either you do not like democracy or you are just a bunch of sore losers. Either way I do not expect the facts to have any effect on the vast majority. I can only counter with what facts I can find and see what happens.
Those that complained that they had a clunker that didn’t qualify I tend to be sympathetic to your plight. If a second stimulus bill is proposed I would alter the program to include a larger range if the improvement is 50% MPG improvement or better. I do not favor another bill. The current bill has at least 18 months remaining so it is way too early to asses the effectiveness of the total package. That and the technical economic data show that it might be working as well as it can and consumer confidence is already beginning to rebound.
As to the buy American Buchanites out there you lost that battle when Nixon went to china. Nissan employs more Americans than Chrysler . Everyone at the dealership was an American worker. Our local credit union employs American workers. The concept that one corporation is American and for America and that some other corporation is a foreign devil against us is just so much nonsense to me.
It was not a good buy from an environmental standpoint and we should have spent the money on transit or renewable energy. The standards could have been tougher but the majority went way beyond the minimum standard anyway . Taking the money for the additional 2 billion from renewable funds was a bad idea but that happens in a compromise bill. The amount of funds that could be spent quickly on transit was finite.
Poor people that have to drive shitty cars. They may have less choice in their old beaters but there will be a glut of non drive train parts. I still maintain that the percentage of the market in used cars is so small as to be negligible but when you are poor it is the cumulative effects that keep you down.