The Obama administration's "Cash for Clunkers" program has been dominating the news lately. This program has some serious problems.
One is that it's easily scammed. Sell your old car, buy a Prius, get $4500, sell the Prius on CraigsList for $1000.00 off list, buy an Escalade for, effectively, $3500.00 off.
Secondly, through some weirdness in the mileage ratings, cars older than 1984 vintage are not actually included in the program. That's right, in typical Orwellian Obama doublespeak, real clunkers are not clunkers, but late model cars are. I was especially disheartened to learn that my very own 2000 Audi A6 Avant is officially considered a "clunker" by the Obama administration.
Third, the program rewards as little as a 1 or 2 mpg improvement in mileage. Given manufacturing variations and individual driving style variations, that is deep in the noise.
Fourth, part of the program involves actually destroying the target vehicle. Yes, that's right, destroying the vehicle. The process is very specific: replace the oil with sodium silicate (aka liquid glass) and run the engine until it overheats and seizes up. Here is how it's done on a late model Volvo S80 in great condition:
Unbelievable that a stunningly beautiful work of engineering is destroyed for no reason whatsoever. I mean, you can't help but compare this to burning books, smashing rock'n'roll records, or the Taliban dynamiting the Buddha statues. Does anybody think for a moment this is a good thing?
For some more details, check this out:
The original idea seems to have come from an article by economist Alan S. Blinder in the New York Times, July 27, 2008, called "A Modest Proposal: Eco-Friendly Stimulus". In it he claims that the program "holds the promise of performing a remarkable public policy trifecta -- stimulating the economy, improving the environment and reducing income inequality all at the same time".
I'm calling bullshit on economist Blinder. Yeah, I know he's got credentials up the yingyang, but this is ridiculous.
First off, the MPG rating on a car has far less environmental impact than how the owner uses the car. A driver employing a high mileage car for a lengthy daily commute will contribute far more pollutants than the driver occasionally hopping around town, even they're using a Hummer. The type of driving, smooth vs. stop-and-go, also has more of an impact. As does the driver's personal habits and the route chosen.
Secondly, the "reducing income inequality" claim (we all know that's code for socialism, but glossing over that for a moment...) is simply untrue. Lower income people, if they own a car at all, generally can't afford a new car, even with a rebate. Also, let's face it, because of a little thing called supply and demand (Could someone explain this to Dr. Blinder?) the retail price of new high mileage cars will likely increase following their demand, making lower mileage cars more affordable to first time buyers.
Thirdly, the stimulation will mostly boost the economy of Toyota and Honda, and not GM, Ford or Chrysler. (I forget, are they still made in this country?)
While I don't have Dr. Blinder's credentials, my own proposal A Modest Proposal to Improve the National Energy Policy is far superior, as it will seriously reduce gasoline pollutants, it costs nothing, and it doesn't involving trashing perfectly good Volvos.
CNN reports some intersting things here [August 4, 2009, As Buyers Pull Up, 'Clunkers' Program Goes Into Overdrive]:
"We're seeing Dodges, Fords, Tahoes, Suburbans, parked for ages," said Karl Jones, finance director at Team Toyota in Baton Rouge, Louisiana.
Got that? "Parked for ages" means that the clunkers were not polluting at all. So in these cases, the Cash for Clunkers program actually increases pollution. I hadn't considered that situation before.
Which runs exactly counter to Dr. Blinder's "income inequality" claim.