The Tao Of The Clunker
posted at 10:01 am on August 2, 2009 by Doctor Zero
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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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Wow. Excellent article. Thanks.
clorensen on August 2, 2009 at 11:09 AM
I’ve donated 3 cars that have been used by people less fortunate than I. I ain’t rolling in it either but I don’t need someone to tell me to do something.
tomas on August 2, 2009 at 11:14 AM
I may be getting sick
CWforFreedom on August 2, 2009 at 11:17 AM
There’s a lively discussion on NewsBusters about this topic today.
I think if the Dems really wanted this to be stimulative, they may have considered it as part of the Chrysler and GM bankruptcies. Rather than behead dealerships and put more people out of work, they could have implemented this plan -without requiring the termination of the vehicles- to help save some of the dealership jobs being lost. I’ve heard of a number of dealerships on the cut list transitioned to Used-Car (only) centers; had they been able to rid their new-car inventory thru an incentive program like this one, and replaced it with a used-car inventory (and the sales revenue to scrap yards) many of these dealers may have been able to make that transition without laying off as many workers, and some may have been able to continue in this realm rather than closing down.
But, of course, it was never meant to be stimulative, now was it?
BKeyser on August 2, 2009 at 11:24 AM
If you feel sick watching a perfectly functional car being destroyed, that may just be a subconscious understanding of economics kicking in.
Count to 10 on August 2, 2009 at 11:25 AM
Call me crazy people but I don’t see the problem.
The govt. is offering a generous rebate to people who can use it to buy a new car.
They get the money in exchange for their old car.
Sounds like a good deal to me.
Worrying about whether $4,500 is enough to buy a new car or that people will have spend their own money doesn’t seem to make sense.
OF COURSE you have to spend your own money when buying a car.
Is that something new?
Also this program offers people who couldn’t otherwise afford to upgrade the chance.
I’m not in the market for a new vehicle now but if the govt. offered me $2,000 to go buy a flat screen 60 inch t.v. or to take a plane to Vegas I might just accept.
One of the points of the program is to get aging gas guzzlers off the road and put people into a new car.
Why then would the govt. turn around and put the clunker back on the road?
As far as the point about the used car market taking some sort of hit from the program I am sure there will be penty left as there are close to 251 million vehicles in America.
http://en.wikipedia.org/wiki/Passenger_vehicles_in_the_United_States
There may be one or two clunkers left over after the program expires.
If people are so concerned about what happens to the auto after the sale then let them sell it privately.
What is the difference between C4C and the $8,000 tax credit for new home buyers?
NeoKong on August 2, 2009 at 11:35 AM
Look on the bright side….
In the coming months & years about 30% of those new cars will be reposessed by the loan companies & auto dealers. This should create a nice “new used” car pool of about 100,000 cars. Many dealers will probably be stiffed by Obama so they will be watching these loans like hawks – ready to swoop in after one payment is missed.
izoneguy on August 2, 2009 at 11:36 AM
What is the difference between C4C and the $8,000 tax credit for new home buyers?
NeoKong on August 2, 2009 at 11:35 AM
C4C was an outright giveaway of tax dollars. A tax credit is a different thing.
izoneguy on August 2, 2009 at 11:39 AM
If it makes anybody feel better, the USA is only following the example of several other countries:
Apparently Canada, Italy, France, Germany, China, the UK, Spain, Romania, Luxemberg, the Netherlands, Portugal have all recently offered tax-payer funded concessions to people buying new cars.
YiZhangZhe on August 2, 2009 at 11:39 AM
Try this:
http://www.tv.com/Yogi%27s+Gang/Mr.+Waste/episode/1198162/summary.html?tag=container;episode_guide_list
Count to 10 on August 2, 2009 at 11:40 AM
Actually, both are examples of wealth transfer, but only one involves the destruction of capital, and induces an unnecessary shortage of goods available to low income persons.
Count to 10 on August 2, 2009 at 11:42 AM
The difference between C4C and a tax credit is that the tax credit does not require you to destroy an old house before you get a newer one.
C4C destroys old wealth in exchange for… nothing really. There may be a marginal increase in fuel efficiency, but a total waste of the energy that went into manufacturing the old car.
A tax credit encourages creation of new wealth without destroying old wealth.
See: The Parable of the Broken Window
ZenDraken on August 2, 2009 at 11:43 AM
Problem 1: Cars can only be bought by people who can already more or less afford one. This means that, effectively, the poorest tax payers (who cannot afford a car at all) are being made forced to subsidise the better lifestyle of wealthier people.
Problem 2: Governments are all whining about how we must be more environmentally conscious but on balance this isn’t environmentally friendly, due to the pollution involved in creating new cars.
Problem 3: You cannot make a nation wealthier by destroying its assets. Destroying assets and paying for them to be replaced shuffles money around (which is the whole point of these programmes) but the overall result is to leave the nation poorer than it would have been if the assets had not been destroyed.
YiZhangZhe on August 2, 2009 at 11:48 AM
Hey you liberal boobs. While we’re on the subject of cars, let’s remember the old chestnut from Toyota, “You asked for it, you got it.”
When things go to sh*t, as they soon will, it will al be YOUR fault.
Mr. Grump on August 2, 2009 at 11:56 AM
Free money is free money no matter the reason.
These are not welfare payments.
If I get the chance to take back $4,500 of my tax money I will take it.
Apparently many people agree with me judging by how fast the money was spent.
No one is forced to participate.
If the thought of what happens to the car after it has been bought and paid for bothers them then they don’t have to do it.
Anyone who wants to spend and extra $4,500 on a car that they don’t have can go right ahead.
I would take the rebate.
And please…let’s not pretend.
If any of those four people I blockquoted were buying a new car tomorrow are they trying to tell me they wouldn’t take the rebate….?
Pfff…yeah right.
How many people returned their $300 or $600 dollar stimulus check…?
NeoKong on August 2, 2009 at 12:02 PM
Consider actually engaging the arguments that have already been made, rather than asking for more arguments that we can’t reasonably expect you to study, either.
Kralizec on August 2, 2009 at 12:13 PM
I did. Actually, I was required to file some paperwork, and when it wasn’t filed they sent me a reminder, and I returned it saying “no thanks”.
KendraWilder on August 2, 2009 at 12:15 PM
How about this, geniusboy? I’m a working-class nobody, and I get precisely shit from this program. And ya know why that is? I don’t have a car!
And hundreds of thousands of cars I could have had at an affordable price are being taken out of circulation. What about this program is it that you fail to understand, moron?!
/facepalm
gryphon202 on August 2, 2009 at 12:18 PM
Uh hoh geez….
Kralizec is getting a little snippy.
Try some Metamucil.
I’ll still take the rebate thank you.
NeoKong on August 2, 2009 at 12:19 PM
1. You are confusing money with wealth. Money is a tool to measure the value of wealth, but it is not necessarily wealth itself.
2. While that $4500 may be of benefit to you personally, the destruction of the older car is an overall loss for the economy as a whole.
3. Policies like this are exercised on a large enough scale that they ultimately shrink the economy through destruction of wealth, and that is a loss for all of us.
C4C is wasteful, destructive of capital, destructive of resources and energy, harms all of us, and is therefore immoral.
ZenDraken on August 2, 2009 at 12:20 PM
I expect the Americans who think the “Cash for Clunkers” program is a good idea will have a humiliating moment of realization, when they hear someone with little income say he can’t find an inexpensive car to drive to work.
Kralizec on August 2, 2009 at 12:22 PM
There are actually two arguments taking place here. One economics the other political. Economics will never persuade the political, nor will the reverse because the objectives of the two do not meet.
The political rejects the economic argument because the purpose of this governmental policy is to gift special benefit to a favored political faction.
Skandia Recluse on August 2, 2009 at 12:25 PM
Consider actually engaging the arguments that have already been made, rather than wasting your time insulting someone who doesn’t matter. But since you think what you want is what we should consider, note well that your willingness to take from others tells us nothing other than that you’re willing to take from others.
Kralizec on August 2, 2009 at 12:29 PM
Really? I can think of at least one person that was “forced to participate” — me. Where in the hell do you think that this money comes from? In the immortal slogan of Robert Heinlein, TANSTAAFL (There Ain’t No Such Thing As A Free Lunch). It either comes from tax revenue (i.e., my money) or government borrowing (i.e., my money for both the principal and interest). And the argument that no one who took the stimulus checks — or, for that matter, who participates in C4C — has moral standing in the argument is puerile. Everyone knows how government works — once the money’s appropriated, it’s not going to be un-appropriated just because it isn’t spent. If everyone made a principled stand not to take the money, it wouldn’t be returned to the taxpayers or used to buy back the T-bills used to borrow the money for that purpose — it would be re-funneled to something most likely even more hare-brained. Once the money is appropriated, it’s as good as spent — it would be immoral not to take it. The principled conservative tries to block the appropriation ab initio by explaining the proper role of government and the real principles of economics. Bottom line: As with any other redistributive program, C4C is theft.
loneloc on August 2, 2009 at 12:30 PM
I have been wondering which group could be both be driving a clunker and have enough money to buy a new car. Finally figured it out this morning: recent college graduates. Now who did most of these vote for in 2008?
agmartin on August 2, 2009 at 12:30 PM
1. You are confusing money with wealth. Money is a tool to measure the value of wealth, but it is not necessarily wealth itself.
2. While that $4500 may be of benefit to you personally, the destruction of the older car is an overall loss for the economy as a whole.
ZenDraken on August 2, 2009 at 12:20 PM
The damn thing isn’t worth $4,500.
It is not wealth.
It is the opposite of wealth.
It is junk.
NeoKong on August 2, 2009 at 12:31 PM
Dammit, almost forgot again — Kirk delenda est.
loneloc on August 2, 2009 at 12:32 PM
Bringing together a band of pirates is a political founding, and piracy is an economic activity.
Kralizec on August 2, 2009 at 12:36 PM
If you can get it I wouldn’t blame you for doing so. Lucky you.
Your good fortune won’t change the fact that these programmes are economically and environmentally asinine. Since the poorest of tax-paying people effectively subsides the affluence and environmental consciousness of wealthier people they are also morally dubious.
As mentioned by
these programmes do appear to be political. The beneficiaries are not just the car buyers but also car manufacturing workers, who tend to be heavily unionised and likely to vote for socialist political parties hence this could be seen as socialist parties bribing their supporters. Many people would consider that to be a problem too.
YiZhangZhe on August 2, 2009 at 12:37 PM
Heh..
You can convince a pirate to give up his pursuit of treasure by making piracy too expensive to practice, but that requires a political decision, i.e. organize punitive raids against the pirates.
Skandia Recluse on August 2, 2009 at 12:42 PM
You’re still not reading. I answered the argument that these cars are worthless before you’d even made it.
Kralizec on August 2, 2009 at 12:42 PM
LOL….Take a deep breath and call your mother.
I can solve that problem for you.
You can:
A. Stand in front of a car lot and offer to buy a clunker from someone or…
B. Look in the damn newspaper.
If you can’t find a used car in about two minutes then maybe you should stay away from the stove and sharp knives as well.
Spare me your rage.It only makes me giggle.
NeoKong on August 2, 2009 at 12:44 PM
I have to believe that you’re being deliberately obtuse. The point about affordable vehicles is that the effective floor for the price of used vehicles is now $3500. Moreover, since all engine parts for these vehicles are now being destroyed, the TCO for these vehicles for those who don’t trade them in will become prohibitively expensive. In addition to its other charms, C4C is regressive.
Kirk delenda est.
loneloc on August 2, 2009 at 12:50 PM
So war is both political and economic. To return to your first point, it seems the reason some of the economic arguments are ineffective isn’t that the objectives of politics and economics are different and incompatible. Instead, the common advantage of the takers differs from the common advantage of those from whom they’re taking.
Kralizec on August 2, 2009 at 12:56 PM
NeoKong on August 2, 2009 at 12:31 PM
You are one of the dumb masses
DougDavis on August 2, 2009 at 12:57 PM
If it was truly junk, it would not be functional. C4C specifically requires functional cars that have been on the road and insured for the last 12 months. That car still has utility and hence is not worthless. Take a look at some of the C4C videos showing cars with a lot of life in them (like a 2007 Volvo) being destroyed. It’s a shameful waste of energy and resources.
Furthermore, C4C requires the destruction of the engine, which is the most valuable part of the car since it can be recycled for spare parts. Again, C4C is immoral because it destroys wealth. It’s also immoral because it is using our tax money to destroy wealth.
ZenDraken on August 2, 2009 at 12:57 PM
You’re still not reading.
Kralizec on August 2, 2009 at 12:59 PM
Doc, this is an excellent article.
It seems that this is the liberal definition of a successful program: handing out money to people. That’s it. They’ve been going around talking about how successful this is, but handing out free money is always popular.
I imagine if the government set up a booth outside the capitol and advertised that whoever showed up would receive $4500 there would be a line stretching to Baltimore. The Democrats would then declare the program to be an overwhelming success because so many people are taking them up on their offer of free money.
Bill Kristol made a good point today on Fox News Sunday. He said why not make it $10,000 or $20,000. That would be better, right? And why stop at cars. Why not have cash for boats and houses and food. If government handouts are so stimulative, then why not make them bigger and broader? More would be better, right?
JohnInCA on August 2, 2009 at 1:06 PM
Here’s a report of some of the damage being done by “Cash for Clunkers.”
http://www.bizjournals.com/sacramento/stories/2009/08/03/story3.html
Kralizec on August 2, 2009 at 1:10 PM
Kristol was exaggerating for effect; he knows the real liberal definition of a successful program as well as I do, that being whether or not behavior is controlled according to the liberal plan du jour. If it can be controlled by giving away money, that will be done; if it can be controlled by taking away money, that will be done. The question is always whether behavior is successfully modified (i.e., whether power is successfully exercised); it is never how behavior modification will be paid for, much less whether they have the right to modify behavior.
loneloc on August 2, 2009 at 1:12 PM
Krazilec…..I don’t need you to explain english to me.
I disagree with your point.
GET IT?
The idea that people won’t be able to find a used car after the program is RIDICULOUS.
Maybe it’s you who has trouble reading.
Here…one more time.
I do not think the supply will run out anytime soon.
NeoKong on August 2, 2009 at 1:14 PM
If you like seeing businesses ruined, you’ll love “Cash for Clunkers.”
http://www.monroenews.com/apps/pbcs.dll/article?AID=/20090802/NEWS01/708029956
Understand, it took no appreciable effort to find this story or the one I’ve already cited. I went to Google, searched on the keywords “used,” “car,” and “dealers,” and followed the news link.
Kralizec on August 2, 2009 at 1:19 PM
Apparently Zen some people disagree with you.
They would be the people who actually own those cars.
Why don’t you go speak to them?
Go stand on a car lot and see how many people you can talk out of taking the rebate.
Present your best argument to them and if they agree with you then I will stand by their judgement.
Good luck.
NeoKong on August 2, 2009 at 1:21 PM
Since the idea that literally every household in the country has 2.5 cars is absurd, it has to be the case that government, corporate, and rental fleets are included in that figure. When these are sold to the public after they’ve reached the end of the fleet lifecycle, it is not at the below-$3500 price point. The argument is not that there will no longer be used cars on the market; it is that the supply of cars affordable to the lower class will be dried up, and such supply as remains will be prohibitively expensive to operate due to lack of parts. To reiterate, C4C is regressive.
loneloc on August 2, 2009 at 1:24 PM
I didn’t say people won’t be able to find a used car. Here’s what I said.
I implied I expect it will become difficult for someone with little income to find an inexpensive used car. NeoKong, it appears you’re still not reading.
Kralizec on August 2, 2009 at 1:29 PM
I don’t think so. The program excluded any vehicle that got 19 MPG or better, which leaves every 4 cyl and most 6 cyl clunkers on the market for people to buy.
What is getting traded in on this program are the 100K-mile plus SUV’s, vans and pickups that were otherwise worth $500-1000 and have gotten to the point of being a money pit to those who owned and drove them. I doubt that your low-income person looking for an inexpensive car would be as interested in a $500 vehicle that guzzles gas and needs $3000 of work to remain road worthy.
ChenZhen on August 2, 2009 at 1:45 PM
You have convinced me.
Now that you have italicized your key words it all so make so much sense to me now. I don’t understand why I did not understand it the first four times you posted it.
Thank you for opening my eyes.
NeoKong on August 2, 2009 at 1:45 PM
For one thing, you have failed to engage anything in the exchange between “Skandia Recluse” and me, so you are still not considering the arguments that have already been made. For another, your point that men will accept gifts is well-known and not very interesting. We are discussing the losses to others and to the Americans considered as a whole.
NeoKong, the reason so many readers are arguing with you is not that you are difficult to refute. Your arguments are very easily refuted, yet you don’t recognize the refutations. Intellectually, you’re like a skinny punk who can’t defend himself, but doesn’t have the good sense to run away. And we’re enjoying the exercise. You can’t argue us out of taking what you give up so easily, but when we’re tired of wrecking you, we’ll go away.
Kralizec on August 2, 2009 at 1:50 PM
All right then.
Kralizec on August 2, 2009 at 1:52 PM
If the give-away is as limited as you’ve said, and if it remains that limited, then the damage will be less.
Kralizec on August 2, 2009 at 1:58 PM
This seems about right.
Kralizec on August 2, 2009 at 2:01 PM
AHAHahahHhaahHAHhahahHAHHAAHahhaaa…Oh geez.
Your killing me.
Stop it.
You seem angry.
Why don’t you go take five in the bathroom and get a hold of yourself?
skinny punk
I love it.
NeoKong on August 2, 2009 at 2:07 PM
You are really not doing very well with this rash commitment you made the other day, are you?
Let me help you out:
Kirk delenda est.
Kirk delenda est.
Kirk delenda est.
Kirk delenda est.
Kirk delenda est.
That should make-up for a few of your misses.
If you can’t even stay on message consistently for one day then this Kirk fellow (who ever he might be ) scarcely need fear whatever destruction you were considering for him.
YiZhangZhe on August 2, 2009 at 2:09 PM
NeoKong on August 2, 2009 at 1:21 PM
—–
Hi, troll.
I don’t drive. I take the train.
In what way, in your utopia, does this help me?
Mew
There can be several points of view on a question. Once the answer is known, there can be only one.
acat on August 2, 2009 at 2:12 PM
Alas, I think you’re right — if I don’t have Cato the Elder’s self-discipline, I shouldn’t commit to his tactics. I’m referring to Mark Kirk, the presumptive Republican nominee for US Senator from Illinois, who voted for cap-n-trade. I could probably be persuaded to vote for NeoKong over that clown . . .
loneloc on August 2, 2009 at 2:34 PM
And this is a believer in global warning talking.
Socratease on August 2, 2009 at 2:40 PM
You’ve done it again. Or rather, you haven’t again. I wanted to say that you’re all talk and no action but you haven’t even got that far yet.
Kirk delenda est.
Kirk delenda est.
To spare your blushes I won’t remind you again. It’s the start of a new week … see if you can do better from now on.
YiZhangZhe on August 2, 2009 at 2:43 PM
This situation isn’t unreasonable:
You cannot sustain any further cash outflow in your monthly budget, you drive 15,000 miles per year, you couldn’t give a rat’s a$$ about global climate change, you qualify for a car loan of $10,000 for 5 years at 6%, and you have an 18 mpg $4,500 qualifying clunker.
This situation is unattainable:
With 87 octane gasoline at $2.30 per gallon you need to purchase a $14,500 automobile that achieves 175 mpg to break even.
ericdijon on August 2, 2009 at 2:44 PM
Well, I had more or less intended that as a concession of defeat, but you have now inspired me to redouble my efforts. The state of Illinois and the Union deserve nothing less, after all.
Kirk delenda est.
loneloc on August 2, 2009 at 2:48 PM
I’ve been unable to find a 19-mpg ceiling, or any other such ceiling, for the vehicles traded in, ChenZhen. There are floors for the fuel economy of the new vehicles, but that’s another matter. Here’s a link to the FAQ at the CARS site itself.
http://www.cars.gov/faq
Kralizec on August 2, 2009 at 2:50 PM
Fabulous; that’s the spirit we need more of. One of the main reasons our opponents make progress in their vile, foolish and destructive schemes is that whatever they might lack in wisdom, knowledge, virtue and honour they make up for with zeal and persistence. Most of us could all learn a thing or two from them in that respect.
Keep it up and that Kirk fellow will fall even before he knows from whence the fatal opposition came!
YiZhangZhe on August 2, 2009 at 3:00 PM
Dr Zero = modern day forefather
Ed Graef on August 2, 2009 at 3:24 PM
True to form, highly informative and thoughtfully reasoned, Dr Zero posits his case elegantly 99.9% of the time I find myself in complete agreement with his stated position.
However, through I am sure my own ignorance, I have not been able to posting here in the GreenRoom. I have for the last couple of days to address his article Big Business vs Big Government. Not being able post my response to it, Iam left to leave here in his comments section.
My apologies if this a breech of etiquette, but answer to that post follows.
———————————————————
The Methodology of Subversion
And the Undermining of Liberty.
The other day Dr. Zero posted a thoughtful, well reasoned essay extolling the virtues of Big Business versus Big Government on one of my favorite sites, HotAir. The argument posited by Dr Zero is one of a battle that has raged across the planet since the turn of the last century. However, the American left has recognized that it has already lost (with the exception of FDR’s New Deal policies) that argument, and has subtlety adapted and moved on.
In doing so he fall’s victim of the old adage of “generals are always fighting the last war” and is guilty of the strategic mistake of not recognizing the precise nature of our opponents today. The former proponents of bolshevist ideology nor longer shun big business, indeed they have ingeniously embraced it and have successfully infiltrated its ranks. The left no longer seeks to destroy commerce outright, but to use big business as another weapon in its assault on individualism.
Thus Dr. Zero has missed the forest for the trees, and while he directs his fire in the right direction, he misses the mark. Although he touches briefly on Ayn Rand’s philosophy when he cites her in, “When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns–or dollars. Take your choice–there is no other.” Other than this, he fails to grasp her uncanny discernment that the struggle is no longer so much purely political as it is philosophical. Later in this piece I will draw heavily upon Miss Rand’s insights.
When one looks today at those former bastions of communism, Russia & China, it becomes clear that the communist economic model has more or less succumbed to that of capitalism. The argument today has morphed more into one of the sanctity of the individual rights, (the traditional basis of American political thought) and the rights of the collective. The roots of this battle now, however share a commonality with that of the one the raged before, and that is in the rights of private ownership. And it is here, that in the name of “the greater good,” that the ideology of individualism has been steadily eroding in the face of collectivism.
This has been clearly demonstrated as we have recently seen corporate titans face threats of populist reprisal by this administration. With these titans thus cowed, the State has arbitrarily dictated its terms. By those terms we have seen the explicit subversion of the bankruptcy courts and contract law in the resolution between Chrysler’s & GM’s shareholders and the UAW, with this the rights of ownership have been laid waste. And in Kelo vs City of New London we have seen yet further assault upon rights of ownership as Corporate Developers have used the threat of governmental force, through a perverted reading of imminent domain to seize private property.
The assault on individual rights doesn’t stop there. Indeed with the advent of State-Mandated-Healthcare it stands to take on proportions akin to those once only found in Brave New World and Logan’s Run. If you think such worries a bit melodramatic, consider that recently the administration declared its desire to ban smoking in the armed forces. Their rationale for this policy directive is that, that as they are responsible for the costs of soldiers’ welfare by way of the VA, they are entitled to do this in the name of cost cutting. In the name of Healthcare reform, is it not the welfare of every citizen they now mean to assume responsibility for the costs of? Are their proposed “wellness programs” merely newspeak for State regulation of what our own person’s may partake of? Does no one recognize the direction all this heading?
With State responsibility now expanding its reach to that over the human body, not even our very self is to be exempt from State control. Through acts like these and others, all quaint notions of what we possess will have become moot.
These intrusions into our personal liberties did not come about in a vacuum. The insidious ways with which the collectivist’s have advanced their cause, have permeated our popular culture, and seized our public narrative is comprehensive. They have partly done so through their infiltration of our societal infrastructure by attaining seats of innocuous sounding boards, philanthropies and various other not-for- profits. Through which they have subtlety promoted their policies. It is by these means that the collectivists have donned the veneer of respectability, moved their agenda into the mainstream and disguised their subversive intentions.
After careful placement in positions of influence in our social strata, and exercise of uncanny patience and discipline over a period of decades, they have shaped the vernacular of our discourse and shifted the paradigm of our national consciousness. They have done this with a singularly relentless ambition towards the achievement of their ultimate goal. The day they assume the reins of power, with the ascension of Barack Obama to the presidency, they feel that time has come.
Once this power is attained, the primary task is to consolidate it swiftly, and then lock in the mechanisms to maintain it.
When Obama foisted the demands of labor upon the captains of industry, backed by his bully pulpit of government and bribery of promises of State supplied advantages over their competitors, he merged their respective interests. This combined the political power of the two and consolidated it with the State. This confluence of a power trifecta between big labor, big business and big government enables Obama in his collectivist quest against individualism. As was so precisely described and ably predicted by Miss Rand in her writings, this is Barack Obama in the role of Wesley Mouch in Atlas Shrugged.
You might think that such heavy handed tactics by Obama might raise howls of protest from our press. But of protest we hear nary a peep, indeed the administration is so confident that it has effectively co-opted our “Fourth Estate”, that it feels it can threaten to use it as the club wielded by that heavy hand.
Ayn Rand illustrated how this political power and influence over the media is promulgated by a barrage of advisory bodies whose consultation is called upon to fill air-time. Associations of so and so, panels on such and such, & councils for this, that, and the other, these are our modern 527’s. Like People for the American Way, Center for American Progress, MoveOn.org and their sister affiliations, these tax-exempt entities which so inundate our political discourse today sway public opinion to their nefarious political ends. The profusion of which was also foreseen by Miss Rand. This is George Soros in the role of Ellsworth Toohy in The Fountainhead.
Now this veritable cacophony of voices spews forth from our media outlets daily with assurances that, in critical times such as these, action must be taken. That in the interest of the greater good, that sacrifices have to be made. That the emergency is so dire, we should put aside our selfish self-interests and answer calls to service of our fellow man. Yet again eerily reminiscent of Ayn Rand’s novels. This invites Rand’s assertion that we need, “just listen to any prophet and if you hear him speak of sacrifice-run. Run faster than from a plague. It stands to reason that where there’s sacrifice, there’s someone collecting sacrificial offerings. Where there’s service, there’s someone being served. The man who speaks to you of sacrifice, speaks of slaves and masters. And intends to be the master.”
Hard as it is to accept, that a Randian vision of our country could come to pass is no longer a matter of speculation, but fact. In a truly Orwellian fashion of inverting wisdom, the Obama/Soros axis has taken Ayn Rand’s warnings of collectivist concentrations of power, turned them on their head and used them as a template for our governance!
MJMotley
Archimedes on August 2, 2009 at 3:30 PM
Doc Zero should be required reading for all politicians………
…………. it won’t take two days and two lawyers to understand.
Good job, Doc.
Seven Percent Solution on August 2, 2009 at 4:06 PM
Flesch Reading Ease 49.0
Flesch-Kincaid Grade Level 11.7
Word 2003 (11.8397.8221) SP3
ericdijon on August 2, 2009 at 4:11 PM
Flesch Reading Ease 53.7
Flesch-Kincaid Grade Level 10.8
Word 2003 (11.8397.8221) SP3
Yet, I found MJMotley a difficult read…
ericdijon on August 2, 2009 at 4:14 PM
Ok, let me see if I understand your plan for economic genius.
Take a running car. Destroy it utterly, then take $4,500 from one person and give it to another… then we will all be better.
This is impressive, but lets admit that taking $4,500 from one person and giving it to another doesn’t provide any net gain. So the net gain must be from destroying a car, correct?
So we can provide economic gain for the nation by destroying cars and making them incapable of running or being used for parts ever again.
Brilliant. I have a plan. Pay me $1,000 for every car I destroy utterly. This will save you taking money from taxpayers and get more cars destroyed. I’ll just head out into the world and destroy cars; and all of us and the economy will prosper from my destruction. This would be a net gain right?
Then I’ll break all the windows in America; just so the old school economists will understand how I’m improving the economy. Hey,destroying things of value, and leaving nothing useful in their place helps the economy… break all the windows nationwide today.
Only by destroying things of value can we help the economy. Some day people will understand the brilliance of NeoKong and will destroy all things of value everywhere… and we will be the richest nation on the world because we will have destroyed everything.
gekkobear on August 2, 2009 at 4:43 PM
That was a nice rant. It was really good. I mean that.
I’m not sure who you’re angry at but the fact of the matter is that people buying new cars disagree with you and every single brain trust on this site who doesn’t like the idea.
Why don’t you tell one of them why they shouldn’t take the money?
Also you might want to check your facts a little.The $4,500 rebate does not come from one person to another.Maybe you can explain why if the cars are so damn valuable that the program went through a billion dollars in less than a week.
Obviously somebody thinks it’s a good deal.They would be the OWNERS of the vehicles.
You under stand that?
The OWNERS of the vehicles do not agree with you.
As for your wonderful economic theory .
Why would someone do that when they can get $4,500…?
I’m not sure which economist you studied under but when someone gets $4,500 of their tax money returned to them that is a good thing.
Now go get your shine box.
NeoKong on August 2, 2009 at 5:14 PM
You include a false/positive assumption in your declaration by stating that someone gets $4,500 of their tax money returned to them; they may not have paid more than $1.00 in taxes – no?
ericdijon on August 2, 2009 at 5:22 PM
Ronald Reagan weighs in on “Cash for Clunkers”:
“This is no time to repeat the shopworn panaceas of the New Deal, the Fair Deal and the Great Society. John Kenneth Galbraith, who, in my opinion, is living proof that economics is an inexact science, has written a new book. It is called “Economics and the Public Purpose.” In it, he asserts that market arrangements in our economy have given us inadequate housing, terrible mass transit, poor health care and a host of other miseries. And then, for the first time to my knowledge, he advances socialism as the answer to our problems.
Shorn of all side issues and extraneous matter, the problem underlying all others is the worldwide contest for the hearts and minds of mankind. Do we find the answers to human misery in freedom as it is known, or do we sink into the deadly dullness of the Socialist ant heap?
Those who suggest that the latter is some kind of solution are, I think, open to challenge. Let’s have no more theorizing when actual comparison is possible. There is in the world a great nation, larger than ours in territory and populated with 250 million capable people. It is rich in resources and has had more than 50 uninterrupted years to practice socialism without opposition.
We could match them, but it would take a little doing on our part. We’d have to cut our paychecks back by 75 percent; move 60 million workers back to the farm; abandon two-thirds of our steel-making capacity; destroy 40 million television sets; tear up 14 of every 15 miles of highway; junk 19 of every 20 automobiles; tear up two-thirds of our railroad track; knock down 70 percent of our houses; and rip out nine out of every 10 telephones. Then, all we have to do is find a capitalist country to sell us wheat on credit to keep us from starving!”
Noel on August 2, 2009 at 5:34 PM
NeoKong on August 2, 2009 at 5:14 PM
—-
Still waiting for you to reply to me, troll.
What do you propose to offer me? I don’t drive, I use public transport. I pay well more than $4500/yr in taxes.
What does this program do for me?
If your answer is “nothing”, as I believe it must be, then you must admit that the program is inherently unfair, yes?
Mew
acat on August 2, 2009 at 5:41 PM
@ Kralizec on August 2, 2009 at 2:50 PM
It’s right there:
ChenZhen on August 2, 2009 at 5:42 PM
But it’s okay because NeoKong gets 4,500 bucks.
Jim Treacher on August 2, 2009 at 5:49 PM
It will hurt the true independent dealer if they cannot afford the wholesale price of used cars; the branded dealer – not so much. The wholesale price stands every possibility of climbing due to shortage of supply. If 1 billion bucks was consumed at $4,500 per car then that means 222,222 cars are unavailable for resale. (More cars if you include those that fetched less clunker cash.)
ericdijon on August 2, 2009 at 6:07 PM
Your snark is delightful Jimmy but maybe you should let the program run at least a week before you bemoan all the people put out of work.
Oh and incidentally my friend…used car dealerships that ACTUALLY MAKE MONEY do not buy clunkers.The cost of making them sale worthy reduces their value.
A decent used car lot will be filled with newer trade ins,repo’s and fleet turnovers.
Junkers don’t sell.
Those end up in the want ads.
Try and pry yourself away from the group think once and a while.
NeoKong on August 2, 2009 at 6:34 PM
Yeah, we’re just not giving it a chance.
Jim Treacher on August 2, 2009 at 7:13 PM
I’ll just listen to you, then.
Jim Treacher on August 2, 2009 at 7:14 PM
It would be a good start.
NeoKong on August 2, 2009 at 7:17 PM
To avoid groupthink.
Jim Treacher on August 2, 2009 at 7:18 PM
Maybe we could learn something from his wisdom, Jim. If the sole criteria of success for a socialist program is whether the beneficiaries approve of receiving free money… then every socialist program is a smashing success! I mean, we’re talking damn near 100% success every single time. Let’s just see if freedom and capitalism can cough up a 100% success rate…
P.S. Kirk delenda est.
Doctor Zero on August 2, 2009 at 7:19 PM
By the way, under ObamaCare, you’ll be able to trade in your old relatives. But only if they’re then completely destroyed. It’s called Cash for Codgers.
Jim Treacher on August 2, 2009 at 7:20 PM
Jim Treacher on August 2, 2009 at 7:20 PM
—-
Jim,
Serious note, I wonder how NeoKong would have felt about the old Soviet system of rewarding children for “ratting out” their parents….
Mew
acat on August 2, 2009 at 7:35 PM
Nice of you to weigh in on your own thread after it is off the front page.
Since you feel so strongly about getting your tax money back maybe you can give up your mortgage deduction if you own a home.If you don’t own a home then when you get a tax refund just send it on back.
I assume that since you blog here you are Republican kind of guy.
Well…here you are. You have the govt. returning lots of money to people who are happy to receive it in exchange for contributing to the economy by making a large purchase and for some reason you don’t like it.
What ever happened to the philosphy that tax cuts are good for the economy?
Or maybe you don’t believe in tax cuts.
Please don’t try to say this isn’t a tax cut.
This is no different than a rebate for a new fridge,a tax holiday or government incentives to winterize your home.
The govt. routinely gives out billions of dollars for all kinds of programs.
What is the problem with one that caused 222,000 cars to be sold in less than a week?
The consumers are happy and so are the dealers.
The cars turned in will not be resold but their value is not gone.They have tires,parts,used oil and gasoline that will be reclaimed.They don’t get dumped in the ocean.Every single business that handles those cars will make money off them.
They have to be towed and stripped and crushed and recycled and then finally someone buys the scrap.Now you have cheap recycled aluminum,rubber,iron and plastic.
Cars go to the junk yard every day.
You also get $4,500 if you want but you are free to turn it down.
If you don’t want your rebate can I have yours…?
NeoKong on August 2, 2009 at 7:54 PM
NeoKong on August 2, 2009 at 7:54 PM
——
You ever going to reply to me, troll?
You’re dead wrong about “parts” having value. The single most valuable part from a used front-wheel-drive car is the front end, i.e. everything from the windshield forward.
Junk yards will cut off and re-sell just the hood, front fenders, front axles, wheels, etc. as a *package* – body shops just weld the recycled front onto an existing back, and save all the time of putting all the cables and parts back together.
This only works, though, if the *engine* (i.e. cylinder block, pistons, cam shaft) is in good shape. Since the Federal program requires that the above pieces be *destroyed* – literally fused into a solid block suitable only to be melted down and re-forged – there’s some value in the alternator, A/C compressor, headlight bulbs, but .. much less.
You’re wrong, NeoKong. But please, keep posting. It’s giving me something to sharpen my teeth and fangs on other than the new sofa.
Mew
acat on August 2, 2009 at 8:01 PM
I would have sooner but I was intimidated by your tough guy talk.
Your the guy with the bus pass right.The guy without a car whining about how cash for clunkers has nothing for you.
Question:
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.
Now go get your shine box.
NeoKong on August 2, 2009 at 8:20 PM
Ok, so you’re right and I’m wrong… I assume you’re willing to do the world a favor by explaining how destroying property helps the economy.
The rebate to try to get more car purchases? I get that. I think its stupid, but I get it. I question the overall value; but it should drive some short term car sales. Of course the Government waste ends up with a net loss; but its a common idea.
People will want to do that? Yes, I definitely get that. If you offer to steal $500 from a stranger and give it to someone else; the guy getting free cash generally agrees with the plan.
But then destroying property needlessly… I still don’t get how that helps. How exactly does destroying these cars help?
Clearly since you’re right and I’m wrong; you can explain this. You have a car that has value, not a lot of value but some. Then you destroy the engine of the car so it cannot be used, or sold for parts… then the economy is helped… somehow.
Can you explain that part? How destroying property with value helps the economy? Does this work on personal economies? If you destroy everything you own of value, are you then richer than before? Or does it only work with nations? If we destroy all the cars in America, do we help or hurt the economy? What percentage of destruction is good? Does it turn into bad if you destroy more than a certain percentage?
I’m just trying to figure out how this works. I’ll admit I initially assumed this could not possibly work; but you’ve persuaded me.
Clearly you’re smarter than me… so explain how it works.
And explain it real simple I guess, since I don’t get it.
If you can persuade me that destroying items of value with no return helps an economy; I’ll give you a free shoe shine.
But go ahead, since I’m the stupid shoe shine boy and you’re the genius here; this should be easy for you. Unless maybe you’ve misread the situation.
gekkobear on August 2, 2009 at 8:57 PM
Great article, Doctor, right on.
Funny, the sales manager at the dealership where I did my C for C deal said about the same thing–except he thought that doing this program earlier might have saved Chrysler & GM. “Yes, and with a lot smaller government footprint,” I replied.
This is in part a payoff to the UAW. Congress would have limited this program to US carmakers if they had been able to get away with it…which is why I was not inclined to buy an American car under this program. Been a Chrysler guy for 40+ years. Now Ford (never owned one) would be the only one I’d consider.
This program will indeed only pull business ahead, but the dealers and manufacturers have been going down this road for years now, haven’t they? Many were running rebate and financing programs before the C for C program.
In combination with the C for C $4500, it’s possible to buy a new car for less than a good used one…if you need one. Anyone who buys a car under this program just because it’s available is eligible for a Darwin award.
I’m not exaggerating. MSRP on the 2009 model I bought was just over $18,000. I was out the door for $12,375. I just printed out the sale record of an identical 2008 model with 22k miles on it. $12,995.
We were doing almost all of our driving in a 1997 minivan with 125k+ mi which gets 26 on the highway if it’s not too windy. Most of our driving is around town. My wife was traveling on business by herself (sometimes in the greater Chicago area) in this vehicle. The new compact sedan (South Korean, not Japanese; you figure it out) is rated 28 mpg overall and includes 5-year unlimited mileage roadside assistance. That–not the gas savings–was a prime consideration.
Our insurance only goes up $100 annually. And even though I run a car until the wheels fall off, I’m aware that it will take quite a while for the $50-75/month gas savings to “pay back,” as they say.
I’m also aware of something which many people are not: that $50-75/month is a tax-free return on my investment.
Everyone assumed that we wanted to turn in the minivan, but our clunker was a 1986 Mercedes 300E with 187,000 miles on it. No air ($2,000 to fix) and a leaking water pump ($600 to fix).
Did the deal Tues 28th. So far, can’t see what I would have done differently–or why.
Owen Glendower on August 2, 2009 at 9:09 PM
At the risk of doubting your mad tax accounting skills, you are flat wrong. A tax deduction lowers the amount of income on which you are taxed. A tax credit lowers the amount of tax that you have to pay, and in some circumstances (though very few) is refundable even if it drives your tax bill below zero. A tax refund is the return of overpayment on your tax bill incurred through withholding. C4C is an expense incurred by the US Treasury for the purpose of defraying the cost of an automobile, whether the purchaser is a net taxpayer, public funds recipient, or foreign citizen.
What about the non-car-buying taxpayers that got precisely squat, other than another public obligation and the pleasure of perpetuating the UAW thugocracy? The ones who were, you know, robbed. Or does their happiness not matter in your scheme?
Obviously, or else you would have answered his last point. Running sodium silicate through the engine will of necessity limit the car’s appeal to a salvage yard, which will destroy the net worth that the car still possesses (despite your mendacious insistence that the car in fact no longer holds net worth).
Kirk delenda est.
loneloc on August 2, 2009 at 9:25 PM
Uh hoh geez….
Well you might have more credibility if you didn’t keep making an incorrect analogy.
The govt. does not take $4,500 from one person and then give it to someone else.
It is a rebate.
It is given to the buyer who in turn gives it to the seller who then shares it with his partners and employees who now have a little more job security.
At the point of sale taxes are also collected and indirectly returned to the govt.
Nobody makes more money off the sale of an auto than the government.
Not the dealer.
Not the manufacturer.
Over a five year period the govt. will get every nickel back and more.
In fact the govt. will continue to receive money from the use of that vehicle right up to and after the moment it finally gets crushed.
What other rebates or incentive programs do you have a problem with?
Tax holidays?
Farm subsidies?
School vouchers?
In state tuition?
Enlistment bonuses?
School lunch programs?
Small business loans?
Down payment programs?
College loan programs.
Home heating oil vouchers for the elderly?
I could go on all night.
NeoKong on August 2, 2009 at 9:56 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
NeoKong on August 2, 2009 at 8:20 PM
—–
Yes, I am aware that the public transportation I use – train, not bus – is subsidized. Know what a subsidy is? It’s where I *pay taxes* and the government uses some of that money to run a train.
NeoKong on August 2, 2009 at 9:56 PM
—–
Are you really this thick?
In *each and every case*, including the train subsidy, the money to pay for the programs comes from the taxpayers.
The problem with this is, increasingly, the people who don’t pay taxes are deciding what the programs are going to be. This, by the way, is not sustainable – as has been proven again, and again, and again, right down through history.
I have to conclude you’re either young and suffering from a typically dreadful education, or you’re a fool.
Mew
acat on August 2, 2009 at 11:07 PM
That was a lot of talking to avoid answering a simple question… but maybe you missed it.
Why does destroying functioning machinery help anything in the economy?
A nice simple question, feel free to ramble on about other topics needlessly, or launch personal attacks, or maybe nitpick on spelling and grammar; but if you actually want to answer the question; there it is.
gekkobear on August 3, 2009 at 12:58 AM
Ya ya that’s right! It grows on the money tree right next to the vegetable tree and the fruit tree!
Jest ask the folks from Santa Cruz!
DSchoen on August 3, 2009 at 4:34 AM
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
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” …
http://iowahawk.typepad.com/iowahawk/2009/07/miller-time.html#more
Mew
acat on August 3, 2009 at 12:15 PM
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 HotAir.com.
Comments have been closed on this post but the discussion continues here.
Ed Morrissey on August 3, 2009 at 12:47 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