The guy who first thought of “cash for clunkers” tells you it’s wasteful

posted at 10:30 am on January 7, 2011 by Fausta Wertz
[ Cronyism ]   

Victor Dial writes in today’s WSJ,
Ou Est Le ‘Cash for Clunkers’?
Not surprisingly, the idea of subsidizing new cars came from France.

You probably wonder who’s Victor, and what does he have to do with cash-for-clunkers?

Most Americans wouldn’t know it, but the Cash for Clunkers model originated in Europe in the mid-1980s. I was in charge of sales and marketing for Peugeot at the time, and the government-incentive idea was co-developed by my company, Renault and the French government.

Merci beaucoup for that beaut, Vic!

Now, here’s what happened: the automakers wanted a handout, and the labor unions and the environmentalists love it.

The losers were French taxpayers, but then they are accustomed to suffering in impotent silence.

As Hillary once said, “you don’t have to love it, you just have to toe the line”. Of course Vic was surprised when the Americans didn’t exactly embrace the idea,

When the program started in 2009, I admit I was surprised at the almost immediate outcry from economists, pundits and, yes, citizens, denouncing it as wasteful. They were, of course, right: It pulls forward new car sales, but it also scraps perfectly good, serviceable vehicles, thus lowering supply and driving up used-car prices.

In the U.S., the predicted volume was underestimated, the budget was woefully inadequate, and the government was unable to process payments in a timely manner. Cash for Clunkers quickly became a synonym for government overreach and incompetence.

What surprises me is that Vic is now saying,

In Europe, few question government intervention in industry or hold government accountable. In the U.S., as the tea party has shown, even if government doesn’t care about accountability, the citizenry does. And to that I say, Vive la différence!

What’s Vic doing about it? Nothing. Too bad he didn’t jump in and speak out when the cash-for-clunkers program was first proposed.

Thanks for nothing, Vic.

Cross-posted at Fausta’s blog.

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