30 July 2009

Ce qu’on voit et ce qu’on ne voit pas

‘Clunkers’ Auto Rebate Plan So Popular That It’s Broke | NYTimes.com

WASHINGTON — After an unanticipated level of response from car shoppers seeking new auto discounts under the “cash for clunkers” program, the government was reported Thursday evening to have exhausted the funds available, leaving unclear whether further applications would be accepted.
I think an alternate headline for this article would be "‘Clunkers’ Auto Rebate Plan So Poorly Thought Out That It’s Broke."
The sudden depletion of the fund was a surprise.


Congress evidently did not anticipate that the money would fly out the door so fast; it said that applications would be accepted until Nov. 1 or the money ran out.
Really, Congressman? You're giving away taxpayers' money and you expect people not to want it? Really? In that case I have a lovely bridge to sell you.
The program had two goals: aiding the ailing car industry and improving fuel economy in the fleet on the road.
So it's a naked transfer from the populace generally to a few politically favored groups, with Bootlegger-and-Baptist window dressing of environmentalism? I'm shocked to find this much honesty in a NY Times article.

Let's forget the supposed environmental benefit right here and now. Two gets you twenty that the CO2 impact of producing a new car from scratch vastly outweighs the benefits of improving average fleet efficiency. What do you think assembly lines and machine tools run on? Pixie dust and gnome farts?

First reuse, then recycle. I had that drummed into my little second grade noggin by the Save-the-Bay crowd, and now, in the name of saving Mother Earth, our Wise and Fearless Leaders are getting is ass backwards.

Here's Mike Munger on car scrapping programs in Germany and the US:
Government is dominated by organized interest groups, out for profit. That's it, that's all you need to know. Everything else is just eyewash. The buy back program is a payoff to the car companies, and labor groups. It has nothing to do with the environment, except when it comes to selling the program to you saps who pay the bills.
You can not create wealth by destroying wealth. You can not make society better off by taking things which are worth something and smashing them. You can not improve our collective lot by breaking shit. Yes, I need to say it three times because we have known this since at least EIGHTEEN FIFTY and it still isn't sinking in.

And if that isn't enough, the German car scrapping has been a total hash-up. Not only do we have very reliable, generalized knowledge about the foolishness of breaking things in order to make ourselves richer, we have specific, contemporary evidence of car-scrapping schemes being a preposterous folly ... and we do it anyway.

When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."
I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account
that which is not seen, and placing it alongside of that which is seen.

—Frédéric Bastiat, "That Which Is Seen, and That Which Is Not Seen"


  1. It wasn't so much a case of running out of money as the requests so overwhelmed the administrators they didn't know whether to approve a trade. The program stopped after spending 10 to 15% of the billion.

    The bigger mess is yet to come. The house approved a few billion more, but the Senate wants to change the eligible vehicle list.

    A lot of cars sold this weekend will be returned to the dealers next week. And since the trades were destroyed, the future is bright for the torte lawyers.

  2. I was operating on that NYTimes article, which said they had run out. Regardless, I stand by my characterization of the problem being lack of foresight and not popularity really.

    I heard in one podcast or another (I can't figure out which) that the EPA has been fiddling around with mileage lists lately to recategorize different cars eligible for trade in, and has refused comment about which cars had been changed and why. I wsh I could verify this.

    You're right on that the biggest mess is yet to come. Just verifying that cars were really scrapped is going to be an auditing nightmare.

  3. And it's not just verifying that cars were really scrapped, what happens if the government doesn't approve the sale and the trade has been scrapped.

    Some dealers are having people sign documents that they will either return the car or pay the $4,500 if the government doesn't approve the sale. It's not like the government hasn't ever done a retroactive policy change.