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When President Obama came to office, he promised that government would solve all kinds of problems. The economy would boom, war would end, and the scourge of crabgrass would never again despoil suburban lawns.
Progressive believers never doubted that Washington could merely snap its fingers and the infinitely complex global economy would snap to attention. Even the ocean levels would obey President Canute.
However, as Thomas Sowell famously said, “there are no solutions... only trade-offs.” Like a half-filled balloon, if a politician squeezes one side, the other side pops out.
One of Obama’s first initiatives was the “Cash for Clunkers” program. While those saddled with common sense ridiculed its naiveté, big-government devotees were sure the scheme would create jobs and heal the planet in one fell swoop.
The results are in and the skeptics were right.
“Cash for Clunkers” allowed drivers to trade their old gas-guzzler for up to $4,500 towards the purchase of a sparkly new green machine. Progressive pundits hailed it as a foolproof win/win/win: The anemic auto industry would sell cars, broke customers would get a sweet deal, and Gaia herself would breathe easier at America’s crystal-clear skies.
Alas, reality begged to differ:
[Cash for Clunkers] created a dearth of used cars, artificially driving up prices. For those who needed an affordable car, but didn’t qualify for the program, this increase in price meant affordable transportation was well out of reach. It also meant used-car dealers, most of whom are independently owned, small-business owners, had little to no stock. According to Smith, 122 Virginia dealers chose not to renew their licenses after that year.
If 122 dealers were put out of business in one state alone, just imagine the damage nationally. And help to the consumer was illusory. The artificial trade-in bonus helped people who couldn’t qualify for a new car loan get saddled with debt they had no hope of repaying. Once financial reality — and higher insurance rates — kicked in, many saw their cars repossessed and their credit ruined. Ultimately, they traded in their affordable ride for a daily bus ticket.
At least more people riding public transportation helped the environment, right? If you dare to have your faith in politicians rattled further, read on.
E - The Environmental Magazine gravely notes that Cash for Clunkers produced tons of unnecessary waste while doing almost nothing to curb greenhouse gas emissions.
Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.
E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivaled newer cars.
Despite Washington’s lofty promises to consumers, car manufacturers and environmentalists, “Cash for Clunkers” was a lose/lose/lose. And you can add another “lose” for the taxpayers who funded this foolish scheme.
Follow me on Twitter at @ExJon.