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Clunk Confirmed:

A new paper in The Economists' Voice concludes that the costs of the "cash for clunkers" program exceed the benefits by approximately $2000 per vehicle. Meanwhile, September auto sales are plummeting, leading to estimates the monthly total will be the lowest in nearly three decades.

Mark Buehner:
Shocking. Never mistake the appearance of motion for progress.
9.21.2009 9:42pm
Mac (mail):
And, anyone who is even vaguely aware of economics expected anything different? Of course, this leaves out almost all Democratic politicians and some of the other side as well.
9.21.2009 9:54pm
The Drill SGT:
And here I thought that the Adminstration and the Dem's really believed that handing out free money was going to create demand and not just push it around by 3 months at a cost of 3 billion.

and we're supposed to trust these guys on health care?
9.21.2009 10:21pm
ShelbyC:

And, anyone who is even vaguely aware of economics expected anything different? Of course, this leaves out almost all Democratic politicians and some of the other side as well almost all on the other side as well.


And most of the population in general. Of couuse, this is because we're educated primarily by people who have a vested interest in not understanding economics.
9.21.2009 10:30pm
geokstr (mail):

ShelbyC:

And, anyone who is even vaguely aware of economics expected anything different? Of course, this leaves out almost all Democratic politicians and some of the other side as well almost all on the other side as well.

And most of the population in general. Of couuse, this is because we're educated primarily by people who have a vested interest in not wanting voters to be understanding economics.

Corrected.
9.21.2009 10:43pm
ShelbyC:
@geokstr: Thanks. But my way allows their hearts to stay pure :-).
9.21.2009 10:57pm
David Welker (www):
The title of your post needs to be changed. The article in question doesn't confirm anything but instead assumes its data.

Here is how sophisticated the article is. An old car traded in under cash for clunkers is worth $1000. The average subsidy is $4200. ($4200 + $1000) / 2 = $2600. Therefore, $2600 is the total value of a $4200 subsidy to the average buyer.

Talk about sophisticated. Basically, this is nothing more than a wild guess.

The article has no data on the frequency with which cars traded in are driven. Therefore, it assumed that they are driven 12,000 miles. At least this assumption has a footnote to a study, so is perhaps reasonable. Nonetheless, this figure is not based on actual data with respect to cars traded in on the cash for clunkers program.

The article assumes that clunkers taken off the road would have only been driven for 3 more years before being scrapped. There is not even a footnote to support this assumption. It appears to have been basically invented out of thin air. I guess that is one of the great thing about being an economist. You don't need actual facts about the real world when evaluating real world policies. You can just assume whatever facts you want.

The article assumes that in all cases, clunkers would have been traded in after 3 years for a car of identical gas mileage as they were required to buy to qualify for a subsity under the cash for clunkers program. This is a totally implausible assumption. Surely many people would have traded in their poor gas mileage cars for other cars with poor gas mileage after 3 years.

The article assumes that a more fuel efficient car only replaces mileage driven on the clunker that is turned in. But surely, in many families, a more fuel efficient car will be substituted for mileage driven on other less fuel efficient cars to some degree. For example, assume that a family owns cars X and Y. X is a clunker traded in for a new fuel efficient car Z. For family trips, before the trade-in, the family would have used Y, which is more fuel efficient than X, but less fuel efficient than Z. Now, the family will use Z for their vacations. This possibility is not considered in the article.

The article assumes that, based on the 12,000 mileage figure, that 840 gallons of gas will be saved. At $3 a gallon, that results in a savings of $2,520. Given that number, how likely is it that people only value a $4200 subsidy at only $2600?

Finally, the article assumes that the stimulus value of the clunker program is zero. This is pretty amazing, since economic stimulus is one of the explicit Congressional purposes of the cash for clunkers program. So, these economists are, without any argument whatsoever, saying that this Congressional purpose has a social value of exactly zero. It sounds to me that these economists are taking the side of the discredited anti-Keynesian "freshwater" school of thought when it comes to macroeconomics. But that is definitely a questionable and controversial point of view.

Overall, it is quite clear that the conclusions of this article are built on a foundation of questionable assumptions.

All in all, I don't think this article has "confirmed" anything.
9.21.2009 11:06pm
Barbara Skolaut (mail):

September auto sales are plummeting

In other shocking news, water is wet....
9.21.2009 11:16pm
Mac (mail):
David Welke,

So you believe the clunker program was a great idea. Do you also believe in Santa Claus?
9.21.2009 11:54pm
John Thacker (mail):
David Welker,

The article assumes that clunkers taken off the road would have only been driven for 3 more years before being scrapped. There is not even a footnote to support this assumption.


But surely some cars would have been driven for 0 more years before being scrapped. Some cars would have been traded in anyway that month. Other cars would even have been traded in a few months earlier, but people held off on buying after the program was proposed and passed but before it was implemented.

I think that the assumption is questionable; I think that 3 years is too generous to Cash For Clunkers.

But surely, in many families, a more fuel efficient car will be substituted for mileage driven on other less fuel efficient cars to some degree.


But surely, it's more likely to go the other way. A family owns two "clunker" low mileage SUVs, X and Y. X is traded in for a higher mileage, but smaller vehicle Z. The family, which used to split family trips between X and Y, now does most family trips in Y, with Z used only for commuting.

The article assumes that, based on the 12,000 mileage figure, that 840 gallons of gas will be saved. At $3 a gallon, that results in a savings of $2,520. Given that number, how likely is it that people only value a $4200 subsidy at only $2600?


Irrelevant. Remember, people would have saved that $2,520 if they had bought the new car and traded their car in for its normal value instead of the $4200 subsidy. The $2,520 is a red herring from the perspective of how much people value the subsidy.

To the extent that Cash For Clunkers has any stimulus value, it's for people who would not have bought that car without the subsidy. If you think that Cash For Clunkers had a lot of stimulus value and was efficient, then you must think that participants valued the voucher at considerably less than the full subsidy. If you think that most participants valued the subsidy at close to its full value, then you must think that the government wasted money by having too large a subsidy.

The "stimulus" of the program results from the inefficiency.

Overall, it is quite clear that the conclusions of this article are built on a foundation of questionable assumptions.


Even if the assumptions (which I feel are generous to Cash For Clunkers) are changed dramatically, the program still looks inefficient.
9.22.2009 12:00am
BigBob:
Thanks david w.
9.22.2009 12:05am
Curt Fischer:
I agree with David Welker that the article is pretty fluffy. Little real data is in there, just a lot of assumptions. But at the same time I agree with John Thacker that the bottom line is unlikely to change, even if real data are painstakingly collected and analyzed.

The real question in my mind is, suppose the analysis in the article had been done back in April or May. How would an Obama administration official or a Congressman have responded to this analysis back then, if forced to comment?
9.22.2009 12:21am
Stevie Miller (mail):
People with money, who were in the market for a new vehicle, took advantage during the month the free money was offered.

These were middle-class people who would have replaced an aging good anyway. So they waited while the economy was in the toilet, and took advantage of the free giveaways. The smart ones merely timed their purchases correctly.

(It's not like the program pursuaded people who never owned before to buy a yacht or anything.)

So of course the numbers in the coming months will continue to be as flat as they were before the free giveaways gave them incentive to purchase then.

We temporarily bailed out the local car dealerships, and the problems of selling vehicles that nobody's excited to buy will be back.

Ditto the financial industry: big bailout, no changes, back to business as usual, and of course, you can expect the same results on down the road.

Thank God for Ben Bernake and the Obama administration for helping us spend our way out of this recession though. I'm just glad all the ultimate causes of the problem have been properly addressed and taken care of so we never again find ourselves in such a situation. *snark off*
9.22.2009 12:35am
Tritium (mail):
It doesn't take a genius to figure out that incentivizing only takes from the future, and at what cost? The cost of a future many of you won't ever have to worry about. But for some of us, something we'll be paying for a long time coming. The cause of our economic destruction is simple. So simple that people overlook it, because they seek a more complicated issue. We could solve it quickly, but it won't be a simple answer, because the problem affects the ones making the decisions more than any other group of people.

Come on bright star, guide the way.
9.22.2009 2:38am
David Welker (www):
John Thacker,

First,

Your argument that 3 years is generous has absolutely no empirical basis that I know of. Maybe your right, maybe your wrong. This is a major point though. 2 years of life would result in over $1600 in saved gasoline.

Second,

The gas savings IS relevant. Among the bundle of things that someone gets when they get a new car is (using the 3- year assumption) approximately $2500 in savings on gas. They also get other things in the bundle, of course. But, as an empirical matter, many people do not calculate potential savings on gas from upgrading their car, but tend to continue with the status quo without doing continuous calculations. The cash in clunkers program thus can act as a much more visible "nudge" in getting people to consider such savings.

Let me be more explicit. Whether you recognize it or not, your assertion that gas savings are irrelevant is based on the assumption that people are perfectly rational and have perfect information. At all times, they know precisely how much money they would save from upgrading to a more fuel efficient car, and thus any decision to not upgrade must be fully informed. In this situation, the amount of savings from gas is irrelevant, because it has already been taken into consideration in a cost-benefit analysis.

This isn't how people work in the real world. People are basically status quo oriented, in that they do not constantly consider all advantageous alternatives. Most people have a more or less vague idea or plan about how long they will keep a car, and will only make serious fuel efficiency calculations when they are seriously contemplating a transaction. The cash for clunkers program disrupts this passivity.

In other words, the theory that everyone who would enjoy a net benefit taking into consideration fuel efficiency, has already upgraded their car, is definitely empirically false. The cash for clunkers bring many new people to consider upgrading, leading them to do fuel efficiency calculations that are not usually at the forefront of their mind.

Third, however the calculation would come out, it is definitely not the case that the new car is only substituting for the clunker and that nothing else is. This factor has been neglected from the analysis. This could be a major factor, one way or another. It was totally neglected by the economists who wrote this paper.

Fourth, with respect to stimulus, heads I win, tails I win. People who participated in cash for clunkers can be divided into two groups. Those who would have bought a car anyway, and those who only bought a car due to the program.

There is little economic inefficiency associated with people who would have bought a car anyway. If you would have bought a car anyway, you value a $4200 subsidy at approximately $4200. Of course, this should be discounted slightly, because you are losing the ability to buy a fuel inefficient vehicle that you may prefer if you want to take advantage of the subsidy.

For those who wouldn't have bought a car but for the cash for clunkers program, you have economic stimulus. Something that these economists purposely and controversially decided to assert was worth $0 in terms of social benefit.

The bottom-line is this. These economists have made assumption after assumption. One could easily come to a different result with different assumptions.
9.22.2009 3:08am
David Welker (www):
Curt Fischer,

It would not be difficult to plug in different assumptions and come to very different results. For example, if you plug in a dollar value for economic stimulus and change the number of years to replacement to 5 years and recognize that cash for clunkers can act as a "nudge" to get people to perform fuel efficiency calculations that they would not otherwise perform, you could get very different results.

So, not only is the paper fluff. It is unhelpful fluff.
9.22.2009 3:11am
bushbasher:
so, no one is actually willing to defend the original article? adler?
9.22.2009 6:16am
l2read:
Duh, I believe John Thacker did.
9.22.2009 6:39am
A. Zarkov (mail):
David Welker:

There is nothing wrong with making assumptions provided the assumptions are reasonable upper or lower bounds for the parameter value. If every assumption is conservative then the result should be conservative, provided there are no non-linear interaction effects.

For example, the authors assume $1,000 for the average value of the clunker traded in. If this number is too high then they will under estimate the value of CARS. If it is too low then it will over estimate the value of CARS. A little research with the Kelly Blue should establish the validity. It doesn't sound too high to me, but I would need to check.

Assuming 12,000 as the average amount of miles driven per year is the standard value used in these kinds of calculations. I would need to go through the whole paper in detail to see if every assumption is reasonable. I would have done it differently by giving each variable a distribution so I can put a confidence interval of the result.
9.22.2009 6:40am
David M. Nieporent (www):
The cash for clunkers bring many new people to consider upgrading, leading them to do fuel efficiency calculations that are not usually at the forefront of their mind.

[...]

The bottom-line is this. These economists have made assumption after assumption.
I love ironic juxtapositions.


For those who wouldn't have bought a car but for the cash for clunkers program, you have economic stimulus. Something that these economists purposely and controversially decided to assert was worth $0 in terms of social benefit.
It's "controversial" only to people for whom liberalism substitutes as a religion for actual belief in God. The fact that Congress pretended to believe it was stimulative, in order to give handouts to car companies, does not mean anybody else is required to pretend to believe them.
9.22.2009 6:43am
Anderson (mail):
Welker: [Facts.]

Other commenters: [Ideological verities!]

Not knowing anything about the clunkers issue, I'm going w/ Welker for the time being.
9.22.2009 8:25am
ShelbyC:

Welker: [Facts.]

Other commenters: [Ideological verities!]

Not knowing anything about the clunkers issue, I'm going w/ Welker for the time being.


Me too. So we've established that the paper is based on assumptions. What now?
9.22.2009 8:48am
Nick P.:
I2read:
Duh, I believe John Thacker did.

No he didn't. He basically tossed out the study and wrote that if you use these other assumptions, you can reach the same conclusion.
9.22.2009 8:51am
Steve:
So we've established that the paper is based on assumptions. What now?

Either someone who wants to support the study will demonstrate some kind of basis for believing the assumptions are reasonable, or else we'll have more snark about Santa Claus and the thread will die out.

I mean, David Nieporent's line about people who see liberalism as a religion is pretty darn ironic considering that the people who believe government intervention into the economy can never work weren't exactly waiting for the economic studies to come out before declaring this program a failure.
9.22.2009 9:11am
SG:
Me too. So we've established that the paper is based on assumptions. What now?

I think those who supported spending billions of dollars in borrowed money to subsidize individual's car purchases bear the burden of proof that it was beneficial. Therefore, if they don't feel the assumptions behind this paper are accurate since it contradicts their conclusion, they should show why they are not reasonable.
9.22.2009 9:44am
Anderson (mail):
So we've established that the paper is based on assumptions. What now?

Alas, I'm not sure I care enough about clunkers to explore further, but a couple of things seem evident.

The program seems to've had at least two goals: create demand for new (domestic) cars, and get gas-guzzlers off the road. Therefore, even if the program created demand inefficiently, it could point to the other goal and say that its success mitigates the inefficiency.

The most efficient way to execute the program might've been for the feds to buy as many cars as GM and Ford could make that obtain > 30 mpg, and then trade those to anyone presenting a car that gets < 30 mpg, which latter car would then be scrapped (thus stimulating the scrap-metal sector, or perhaps flooding it and driving prices down -- unintended consequences, etc.).

But I imagine that would've been politically unacceptable, and caused the usual suspects even greater fits than did the actual program.
9.22.2009 10:06am
The Unbeliever:
The program seems to've had at least two goals: create demand for new (domestic) cars, and get gas-guzzlers off the road. Therefore, even if the program created demand inefficiently, it could point to the other goal and say that its success mitigates the inefficiency.
Isn't it nice when you get to declare your own goalposts? You can define terms so that you always look like a winner!

The old "heads I win, tails you lose" trick is funny once when you played it on your little brother. Start throwing macroeconomics and billions of tax dollars in the mix, and you quickly wish people would stop playing games.

David Nieporent's line about people who see liberalism as a religion is pretty darn ironic considering that the people who believe government intervention into the economy can never work weren't exactly waiting for the economic studies to come out before declaring this program a failure.
Let's ignore the "never work" part for the strawman it is. The reason such people objected out of hand is because basic economic principles tell us that government intervention creates inefficiency, and that Keynesian stimulus merely pushes money around intead of creating sustainable demand.

History (economic and political) is littered with failed programs that are functionally identical to the Cash For Clunkers program; it's hardly partisan to point out that what failed in the past is likely to fail in the future.
9.22.2009 10:32am
Steve:
The reason such people objected out of hand is because basic economic principles tell us that government intervention creates inefficiency, and that Keynesian stimulus merely pushes money around intead of creating sustainable demand.

The statement that "basic economic principles" tell us that Keynesian economics doesn't work is, indeed, the tenet of an alternative religion to the Church of Liberalism.
9.22.2009 10:56am
The Unbeliever:
The statement that "basic economic principles" tell us that Keynesian economics doesn't work is, indeed, the tenet of an alternative religion to the Church of Liberalism.
Uh... mainstream economics is an "alternative religion"? Or are we now pretending that stagflation never happened, that the monetarists never gutted Keynesian intellectual arguments, that New Keynesianism never rose from the ashes of Neo-Keynesianism as a direct result of the navel-gazing that happened when demand stimulus failed?

Maybe we're pretending all of the 70's never happened--tempting, given the number of embarassing photos some of us could produce--but that is not really a good idea when making serious arguments about macroeconomic policy.
9.22.2009 11:23am
PatHMV (mail) (www):
So at this point we can't actually tell whether the program we spent $3 billion of taxpayer money on actually produced any benefits. With certain economic assumptions, it's clear that it didn't. With other economic assumptions, it probably would show benefits. We don't have adequate data (in some cases, because there is simply no way to predict what the consumer would have done, such as how long they would have continued to drive that particular car).

And in the reality-based community, this is an argument FOR the merits of Cash-for-Clunkers? I certainly appreciate David Welker's point that the study cited relies (like most economic evaluations) on assumptions, and those assumptions may or may not be reasonable and certainly should be backed up with analysis. But my default is that the government has wasted money unless it can establish, with good evidence, that it did provide a benefit. If your ideological default is that the government is presumed to have been wise until proven otherwise, well, that's your own "ideological verity."
9.22.2009 11:26am
Steve:
I'm sure those links conclusively prove that Keynesian economics is utterly debunked, but it's regrettably against my religion to click them.

Just remember, the other side has nothing but faith-based gobbledygook - our side has the Truth!
9.22.2009 11:27am
Mac (mail):

It's "controversial" only to people for whom liberalism substitutes as a religion for actual belief in God. The fact that Congress pretended to believe it was stimulative, in order to give handouts to car companies, does not mean anybody else is required to pretend to believe them.


Amen.

Question, will the energy and money saved by better gas mileage ever, ever, equal the energy it took to make a new car, not to mention the energy it took to destroy the old car?

I have tried to find just where and when Keynesian economics worked for some time now. It didn't work for Japan. It is called the lost decade. It didn't work for us in the Great Depression. I finally found a place where it did work. Pre-WWII Germany. Of course, Hitler pretty much set his own prices and wages or used virtual slave labor when it suited him, so I think this may have skewed its success, but it did work.
9.22.2009 12:38pm
Gary McGath (www):
That's the wrong cost-benefit analysis. The question which interests the politicians is whether votes gained exceeded votes lost. They probably did.
9.22.2009 1:01pm
Mac (mail):

That's the wrong cost-benefit analysis. The question which interests the politicians is whether votes gained exceeded votes lost. They probably did.


Correct. At least, until the state tax bills come due next April and people realized they owe tax on the money they never got, but that was deducted from the cost of the new car.
9.22.2009 3:35pm
Cornet of Horse:
The burden is on Welker to show the the assumptions are unreasonable. This he failed to even attempt.

Anderson, you should know better.
9.22.2009 4:12pm
Alan Potkin (mail):
I'm not an economist, but as an alternative to a classic benefit/cost analysis I actually did run a quick and dirty work up of the relevant crude energetics (all data from five minutes of Googling):

Assuming 50K miles remaining service life in the clunkers getting 16 mpg (now being destroyed instead ), the comparative savings in gasoline in a 32 mpg vehicle over those same 50K miles is about 1,600 gallons.

The energy content in a gallon of gasoline is about 130 MegaJoules (i.e., ~35 MJ/l). Producing new steel requires about 22 MJ/kg, while recycling old steel requires about 14MJ/kg. The energy yielded by the 1,600 gallons of saved gasoline is 210,000 MJ, or about enough for smelt a little less than 10 tons of completely new steel, or to reprocess about 15 tons of recycled steel.

I've also seen another set of figures showing production energetics of raw steel at 65 MJ/kg, and recycled steel at about 52 MJ/kg. If those numbers are more correct, the fuel saving allows for producing only 3.5 tons of new steel or 4.1 tons of recycled steel

I further Googled up a figure of 66 giga joules (GJ) as the ballpark energy input required to manufacture a single new motor vehicle, including the metallurgical energetics (as above, plus copper wiring, aluminum components, etc.). One gigajoule is 1,000 megajoules, i.e., 66,000 MJ/vehicle. That figure comes from Ford and is based on Taurus sedan or a F-150 pickup truck.

Ford also offers a lifetime energy consumption of those same models at about 961 GJ = 961,000 MJ, assuming a 120K lifetime mileage yield.

So very roughly speaking, it would take the fuel savings (over 50K miles estimated remaining life in each) of recycling four or five (!) clunkers to account for the lifecycle energetics of only one new vehicle.

No doubt this is a vastly oversimplified analysis, and doesn't at all address the carbon issues at the heart of the global warming hypothesis. Likewise I'm staying away from the "stimulus" and job-creating/job conserving nominal objectives of the scheme.

This also doesn't address the personal financial issues of holding onto a fully-paid-for clunker getting 16 mpg, or alternatively taking on a $15,000 auto loan for a 32 mpg vehicle that saves about $4000 in fuel costs (at $2.50 gallon, roughly the present average cost of gasoline in the USA) over the first 50K miles driven. Or only about $800/yr at the typical 10k miles/yr driven by Americans. Of course the maintenance and repair costs of a new car will likely be much lower than of an old clunker over the first 50K miles.
9.22.2009 4:38pm
ChrisTS (mail):
No doubt I misunderstand many of the issues, here, but I thought the point of the program was to (1) get a little action going in the economy and (2) make a small movement towards getting people into more fuel efficient cars. If so, the purely economic efficiency analyses miss the point.
With respect to (1), the program seems to have had some success. True, those folks will not now be buying cars for a while, but so what? Indeed, I assumed the aim was as much 'psychological' as anything, although I have heard from economist pals over the years that people who make one major purchase (car, boat, house) tend to go out and buy other things as well. But even if the latter is not true, just giving the citizenry the sense that some people are buying some things might be good in our current situation. (I no longer know what to call it.)
I think I get the gist of Alan Potkin's analysis, but we are going to continue to build new cars and dispose of old ones, so how is getting rid of old ones a pure 'cost' of the program? Perhaps some of them had more life in them, but if that life means continued wasteful fuel use, the extra time on the road is not entirely cost-free.
9.22.2009 5:52pm
ChrisTS (mail):
As an anecdotal aside:
my fellow hybrid, smartcar, and minicooper -driving friends and I have discovered an interesting change in our behavior since we became owners. Basically, we are considerably more fuel conscious than we ever expected to be. Quick trip in the car to pick up one or two things? No! Drive the kid three blocks to visit a friend? No! Indeed, we all talk about our various fuel saving tricks: glide to stops, drive more slowly, ride the wind-block behind trucks, etc.

So, to the extent that this is a widespread effect of switching to a fuel-efficient car, perhaps the savings of the switch are greater than an analysis that assumes the same amount of driving and driving in the same way indicates.
9.22.2009 5:54pm
ShelbyC:

my fellow hybrid, smartcar, and minicooper -driving friends and I have discovered an interesting change in our behavior since we became owners. Basically, we are considerably more fuel conscious than we ever expected to be. Quick trip in the car to pick up one or two things? No! Drive the kid three blocks to visit a friend? No! Indeed, we all talk about our various fuel saving tricks: glide to stops, drive more slowly, ride the wind-block behind trucks, etc.


But don't your backs get sore bending down like that?
9.22.2009 6:42pm
Brian K (mail):
Ford also offers a lifetime energy consumption of those same models at about 961 GJ = 961,000 MJ, assuming a 120K lifetime mileage yield.

So very roughly speaking, it would take the fuel savings (over 50K miles estimated remaining life in each) of recycling four or five (!) clunkers to account for the lifecycle energetics of only one new vehicle.


your analysis falls apart at this point. your assuming that the owner of the clunker would not buy a new car when the clunker dies. you need to include the energy costs of the new car for the 70k mile difference between your two numbers.

based on the correct part of your analysis, the cash for clunkers programs was a net positive in regards to energy use.
9.22.2009 7:22pm
Mac (mail):
Alan,

You forgot to include all the fuel spent by folks driving to the car lots, perhaps many car lots, and all of the gasoline used to get the "clunkers" to the destruction places and I assume to get them to the recycling places after that.

Also, there is the increased price due to decreased supply that the poorer folks will have to pay for used cars. Then, there is all of the appliances, home improvements, whatever else people have not bought in order to buy new cars to take advantage of the program and how much this has hurt those manufacturers and their employees.

A pretty complex economic problem, it seems. The bottom line is, now that it it is over our nation's economy is worse, not better.
9.22.2009 7:58pm
Alan Potkin (mail) (www):
Thanks, Brian and Mac...

I don't think I was drawing any solid conclusions on the gross energetics. I just wanted to show how painless it was to come up with some in-the-ballpark numbers to assist the public policy evaluation.

Amazingly, there was zero press on the dubious-at-best Cash for Clunkers (CfC) initiative evidently being within the brief of the ex-Green Jobs Red Troother Czar Van Jones, who since went under the bus. And maybe it was actually his idea, personally. Sounds like the flashy kind of gimmick he was drawn to

(BTW, as a putative Yale J.D., did Mr. Jones ever pass the bar and/or practice law anywhere?)

In any case, it (CfC) was one of those things ($4B worth) that was buried deep, deep in the $800B porkulus pie that received no discernible rigorous technical analysis, far as I could see.

Trying to get serious post facto evaluation accomplished on nearly anything is virtually impossible in a highly politicized environment where rent-seeking is the motivating factor for the project going forward. See URL above: prospective contributors stayed away in droves and the "Mekong Actual Outcomes" conf never got off the ground.
9.22.2009 9:13pm
Cornet of Horse:
ChrisTS,

Consider where the money comes from to "get a little action going". Given that presently that will be from further indebtedness to Chinese sources that already have too much influence on our fiscal policy and that poor people don't buy new cars (My uncle is a car dealer and I worked for him for 3 years. I've never bought a new car. Not the best investment in the world.), this ain't exactly a Robin Hood program.

Given the precedent it sets for other industries to lobby the government for special treatment, CforC was an unmitigated disaster.
9.22.2009 9:20pm
Mac (mail):

Amazingly, there was zero press on the dubious-at-best Cash for Clunkers (CfC) initiative evidently being within the brief of the ex-Green Jobs Red Troother Czar Van Jones, who since went under the bus.



Why is that amazing, Alan? It is rather exactly what I would expect.

I am amazed that anyone thought it would either stimulate or reduce carbon emissions. Among other things, whatever happened to the 3 R's, reduce, reuse, recycle? People seem to suffer from the illusion that recycling is energy free. It is not. Our town recently quit recycling glass as it was prohibitively expensive to haul it 100 miles to our area's glass recycling center.

I thought to stimulate would mean to energize, get something going that would have a positive, cumulative effect. This certainly failed miserably. You could lob a scud missile into most car dealerships and have no fear of injuring anyone. There was the bureaucratic nightmare created for the dealers and most of them will have to go after a number of their customers for the 3,500 to 4,500 dollars and get it from them as the Fed's denied the customers eligibility. Anything that spends billions of dollars and then, when it is done, is dead, is a failure. Add to that the very dubious gasoline savings and the very high prices the poor will have to pay for used cars and you have a disaster on the second front as well.
9.22.2009 9:26pm
Alan Potkin (mail) (www):
What was amazing, Mac, was the total absence of connection in the public consciousness between the Clunkers debacle and the ex-Van Jones czarship (if indeed there was such a linkage, as I understood the case to be).

Also, as somebody who been nursing a pair of 20 year old SAAB 900s with about 350K miles on them together so far, I frankly couldn't bring myself even to open any of those on-line videos of spiffy Volvos and Corvettes being euthanized in real time with silica glass. This jaw-dropping stuff was all over the web exactly while the Obamazoids were trying to extend their tender mercies into nationalizing healthcare.

Would have never gotten past Don Draper.
9.22.2009 9:47pm
Mac (mail):

What was amazing, Mac, was the total absence of connection in the public consciousness between the Clunkers debacle and the ex-Van Jones czarship (if indeed there was such a linkage, as I understood the case to be).



True. But, Van Jones is a media darling. It is a perfect example of the proverbial "road to hell" on his part, not to mention total and complete ignorance of economics and abject media bias on their part.

Can hardly wait for Czar Ezekial Emanuel's "clunker" version of health care to be implemented.

The idea of destroying perfectly good old clunkers hits too close to home. And, they wonder why people are upset with them taking over health care?
9.22.2009 10:09pm
ChrisatOffice (mail):
ShelbyC:

But don't your backs get sore bending down like that?

Umm.. I'm not sure I get it. The wind-block thing? (Help.)
9.23.2009 4:58pm
ChrisatOffice (mail):
Cornet:

I get your point. I suppose the question is how else might the government encourage people to spend a bit of money?

This was probably cheaper than any across the board tax break, actually got people to spend money [rather than sock it away], and got people thinking about more fuel efficient cars.

There is never free lunch, and I guess I am just not convinced that this was a terrible idea.
9.23.2009 5:04pm
Cornet of Horse:
ChrisTS,

It was well-intentioned, which is a non-negligible thing. At best, though, this is a hair-of-the-dog measure, when people are ready to more seriously consider why it is that we're hungover all the time.
9.23.2009 11:48pm
Mac (mail):

ShelbyC:

But don't your backs get sore bending down like that?

Umm.. I'm not sure I get it. The wind-block thing? (Help.)


I took it to mean that the cars are very small and you must bend over a lot while riding around as you have so little space. I could be wrong, but that is how I took it.
9.24.2009 10:23pm

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