Green Room

The Tao Of The Clunker

posted at 10:01 am on August 2, 2009 by

The Left loves to criticize capitalism for being short-sighted, while benevolent government takes the long view, planning for the future through the brilliant designs of a command economy. Like many of the Left’s beliefs, this is the exact opposite of the truth. Consider the latest example of socialist government’s astonishing nearsightedness: the Cash for Clunkers program.

Originally slated to last through October, Cash for Clunkers blew through its billion-dollar funding in a week, and has received an injection of two billion additional dollars from Congress. Those are your dollars, by the way, assuming you are one of the 57% of Americans who pay federal income tax. You might not enjoy spending time in used-car lots, but last week, you were forced to help pay for thousands of old beaters. You might have had some unpleasant experiences at car dealerships, but I doubt any of them robbed you at gunpoint, as the Democrat Congress just did. Even more of your tax money will be appropriated to help destroy the clunkers, which aren’t even being broken down for spare parts. Downturns in the free market may reduce the value of assets, but only through the magic of government can the value of a useful asset be reduced to less than zero.

If it makes you feel any better, remember that all of this is being done in the name of a religion you probably don’t believe in. Oh, wait, that’s going to make you feel worse. Good. It should. The sight of Obama’s apparatchiks squealing with glee like little girls, and declaring Cash for Clunkers to be a phenomenal success, should fill you with blind rage. Maybe we could get a little value for our money by having the federal government assign the brainwashed schoolchildren trapped in its rotting educational system to fashion bits of metal from the destroyed clunkers into decorative keepsakes, and mail one to everyone who paid taxes last year. We could call them Planetary Savior Trophies, and each could come with a little prayer you recite each morning, to reduce global warming. It would be as effective as anything else Big Government forces us to do in the name of global warming.

Far from being short-sighted, the free market designed a system that generates useful value from automobiles decades after they are manufactured. New cars become “pre-owned” after their original owners decide they want a new vehicle. After the second owner gets finished with them, the cars devolve into “clunkers,” affordable by the young and the poor. Even when a clunker dies, its parts become useful assets in the repair and maintenance market. Every car is an organ donor.

The genius politicians who designed Cash for Clunkers, and blew through a billion dollars of taxpayer money in five percent of the allotted time, should be laughed out of the room when they call free markets “short-sighted.” What have they every produced that was still generating positive value twenty years later?

Besides transferring three billion dollars of our wealth to people who used to drive beat-up old cars, the Cash for Clunkers program also short-circuits the used car marked for the coming decade. Dealers get a short-term sales boost, but they’ll pay dearly for it over the next few years. Because the program generated some positive headlines, the government pronounces it an epic success, and plows more money into it. The only criteria for the success of any Big Government program is whether it produces a short-term bump in the polls, and comes in handy as a prop, every couple of years during elections. What system could be less likely to produce lasting, long-term benefits and deeply rooted economic strength?

It’s also worth noting that those $4500 clunker vouchers are not enough to completely pay for a new car. The people taking advantage of those vouchers will need to kick in a sizable amount of their own money. Those who would otherwise have waited to buy a new car will be diverting resources they would have invested elsewhere, if not for the voucher program – so it amounts to $3 billion spent to divert several times that much money from other industries, into new car sales. By the way, who makes those new cars? Do they have some sort of trade organization, which has a cozy relationship with the Democrats? I seem to remember reading about something along those lines.

The Left always portrays businessmen as rapacious predators who would gorge themselves on today’s profits, without any thought for the future. This is a far more accurate description of socialist government. Capitalists, as a group, are not interested in destroying vast amounts of future wealth to obtain a quick infusion of immediate profit – that’s just stupid. Some individual businessmen may act in such a manner, and some take it to the level of criminal activity that should be punished, but the vast majority of them are in business for the long haul. By definition, a company that destroys its own market for immediate gain is destroying itself. Individual companies rarely have the power to inflict that kind of market damage anyway – such power is the province of Big Government alone. Even if greedy new-car dealers and manufacturers wanted to increase their profits by blowing all the old cars off the road, they could never have done what Big Government did last week.

Only the government is eager to sacrifice future wealth for immediate gain. It’s written into the DNA of socialism. A businessman would think you a fool for suggesting he sacrifice decades of future opportunity for immediate gain, while a politician would think you a fool for suggesting otherwise. What matters to a politician more than today’s polls, and next year’s elections? A businessman looks at people who aren’t his customers yet, and sees the opportunity to expand his market. A politician looks at people who aren’t his constituents yet, and sees enemies that need to be suppressed. Politicians think they have an infinite supply of tax money to tap into, when their schemes go wrong. The deficit can always get a little bigger, and they can always steal a little more from the vastly outnumbered top income earners. Crashing the entire financial system for political gain in the 90s was a net win for the Democrats, and they would do it again in a heartbeat. Destroying the auto market to provide a little economic “stimulus” they can trumpet on the Sunday talk shows is a no-brainer.

If you paid federal income tax last year, you should stop by a new-car dealership today. They’re probably serving free coffee and soda to their crowds of customers. If you’re lucky, they might be giving away hot dogs and pizza. Help yourself to as much as you can eat and drink, because it’s the only thing you’re going to get in exchange for the three billion dollars the Democrats just stole from you. When someone treats you the way Barack Obama just treated taxpayers, the least you can do is expect them to buy you a drink.

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Why does destroying functioning machinery help anything in the economy?

gekkobear on August 3, 2009 at 12:58 AM

Because NeoKong gets 4,500 bucks.

Jim Treacher on August 3, 2009 at 10:57 AM

Jim Treacher on August 3, 2009 at 10:57 AM

Here’s a few “clunkers” …


acat on August 3, 2009 at 12:15 PM

Some of them are salesmen or mechanics at a new-car dealership, or work at a salvage yard, or serve food to people like us, stopping to take a break July 28 on their way home from picking up their new car.

Owen Glendower on August 2, 2009 at 10:19 PM

I’m not even sure what to say to this. Either you believe in the right to property, which includes the right to keep your own money (subject to taxation for the limited purposes enumerated in the Constitution), or you don’t. I’ve finally come to the conclusion that these two groups don’t even speak the same language anymore. Sad, really.

Kirk delenda est.

loneloc on August 3, 2009 at 7:38 AM

I made my comment not to express my philosophy of life, but only to point out that it is not correct to say that non-car-buying taxpayers get precisely squat from this program.

Owen Glendower on August 3, 2009 at 12:41 PM

This post has been promoted to

Comments have been closed on this post but the discussion continues here.

Ed Morrissey on August 3, 2009 at 12:47 PM

Do you really think that your public transportation only cost a dollar a ride ?
You have using the public dime for a long time my friend and I suspect you will be for a long time more.

NeoKong on August 2, 2009 at 8:20 PM

Heh…I need to remind myself of that every time I take a bus ride to my community college.

Not the most fun experience, but it sure beats the Heel-and-Toe Express.

Dark-Star on August 8, 2009 at 9:01 PM

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