Cash for clunkers, a win-win-win? Think again
Aug 27th 2009 3:00PM
Updated Dec 4th 2009 12:34PM
In a blustering press release touting the success of cash-for-clunkers, Transportation Secretary Ray LaHood commented that the program was "a win for the economy, a win for the environment, and a win for American consumers."
We interrupt this fantasy for a brief return to Planet Earth. Yes, cash-for-clunkers was a big win for certain segments of the economy: car dealerships and people who build cars (in Asia mostly, but hey). It was a big loss for mechanics, who lobbied heavily against the bill but were outmuscled by the car dealers. And in the long run, it really may have just frontloaded car sales.
A win for the environment? There's absolutely no proof of that, and there's quite a bit of evidence to the contrary -- that it's a loss, or at best a break-even.
The most puzzling comment of all is "a win for American consumers." Six hundred ninety thousand vehicles were moved with the help of money from about 138 million taxpayers -- so this case of compulsory generosity benefited about one in every 200 taxpayers -- plus an industry that's already received billions in bailouts. And don't forget about the crippling car loans that cash-for-clunkers induced some people into taking at the expense of their own long-term financial health.
So here's how Transportation Secretary Zac Bissonnette would summarize cash-for-clunkers: "a short-term win for some parts of the economy, a loss for other parts of the economy, a draw for the environment, and a loss for 199 of every 200 taxpayers."