This is a list of 20 quotes from people that dare to challenge the assumption that the Cash for Clunkers program is a success — by pointing out he obvious flaws few talk about.
20) Wall Street Journal: “Defies Logic”
The Wall Street Jornal questioned the so-called success of the Cash for Clunkers program jumpstarting the auto industry:
As for helping the auto industry, the proof will be whether Mr. LaHood’s jump start to sales is sustainable. The idea that a temporary subsidy program will launch the auto industry onto some new, higher sales and production plane defies logic. More likely, the program will merely have concentrated sales over a shorter period, as buyers either postponed purchases once they learned the program was in the works, or accelerated them to meet the subsidy deadline. The program is another bow to the now-reigning Washington policy illusion that the key to prosperity is force-feeding consumer spending, rather than creating incentives for Americans to invest and take risks.
We keep hearing this is a brave new era of public confidence in the virtues of government planning. But the lesson of cash for clunkers is that if this government can’t manage a free lunch, it can hardly be trusted to decide whether you can have a hip replacement, and how much it will pay for it.
19) Edmunds.com CEO: As a Result of Clunkers, “Car Sales are Probably Going to Plummet”
Cash for clunkers only worked at concentrating sales for the rest of the year into the month of August. Anyone thinking about buying a new car in the next six months had a huge incentive to take advantage of this program. If this is true, car sales are going to plummet, and car dealers and manufacturers will lay people off to survive the coming sales freeze.
18) Skip Davenport via Automotive News: “Fed up.”
“My office manager got so fed up last week, she threatened to quit.”
17) John McEleney, chairman of NADA: “It’s chaotic”
“We’ve been unable to get on the Web site,” he said. “It’s chaotic — the site has been overwhelmed with dealers all over the country applying.”
Mr. McEleney also said “there’s a lot of uncertainty about the rules. We’re grateful the program exists, it’s been a tremendous boost to dealers who really need it, but it would be nice if it were a bit less complex.”
16) Stanford University Study: “Cash for Clunkers is an Expensive Way to Help the Environment.”
Since ‘clunkers’ are not expected to be on the road much longer anyway, paying new car buyers $4,500.00 to take older cars off the road a little bit earlier is not cost effective.
The popular program may be costing the government — and taxpayers — several hundred dollars for each ton of carbon dioxide emissions that it saves, according to conclusions reached separately by Michael Wara at Stanford University and Christopher R. Knittel of the the University of California, Davis. Both performed back-of-the envelope calculations to figure out how well the program was meeting its environmental goals.
“The program is really not cost effective as a climate policy,” said Mr. Wara, who is an assistant professor at Stanford Law School and a faculty fellow at the university’s program on energy and sustainable development. “It might be a great economic stimulus — we’re selling a lot of cars — but this is not the way to deal with mobile sources of climate change.”
15) : NPR’s Mara Liasson: “Cash for Clunkers is like a mini-Katrina here; it’s not good to start a program and not be able to execute it.”
14) AP: American Taxpayers Subsidizing Asian Automakers Because “Eight of the top-10-selling vehicles are made by Japanese”
Eight of the top-10-selling vehicles are made by Japanese and South Korean companies, with the Toyota Corolla claiming the top spot as the most popular car in the trade-in program. Toyota Motor Corp. also overtook General Motors Co. with the greatest share of sales under Cash for Clunkers, which offers consumers discounts of $3,500 or $4,500 for trading in older vehicles for more fuel-efficient new models.
12) Car Dealer Owner, Adam Lee: “It’s a Mess.”
Adam Lee, a co-owner of Lee Auto Malls, one of the largest car dealerships in Maine, told Green Inc. in an e-mail message this morning that “we are having all sorts of problems.”
In Mr. Lee’s description:
1. We have not had one application accepted without it being rejected numerous times.
2. We have 9 people at 5 dealerships working full time on this, it should take one person.
3. We have over 100 waiting to be paid and have not been paid on one yet.
4. They changed the rules part way through.
5. It is a mess.
11) General Manager Vicky Gonzalez: “Every Deal We Have Submitted is Pending”
10) Jake Stewart: Cash for Clunkers Written by “Idiot Congressmen”
9) Car Salesman: “Uncle Sugar has gotta deal for you, courtesy of voiceless posterity.”
8) Ron Paul: “This program is being paid for by the poor”
7) NJ.com: “A Bureaucratic Nightmare”
“I’ve gotten rejection after rejection,” said Ploetner, president of Towne Auto Group in Union. “There’s absolutely no logic to it. The administration of it is a disaster. It’s like dealing with a computer program from 15 or 20 years ago.”
Now, he said, he’s pulling out of the program until he sees some of the money — tens of thousands of dollars –he’s owned.
“I won’t do it anymore,” Ploetner said.
That clanking sound in the “Cash for Clunkers” program isn’t a noisy valve or piston. It’s the throbbing headache the program is giving dealers even as it bails them out of a deep decline in the car-buying market over the past year.
The Car Allowance Rebate System (CARS) has been such a bureaucratic nightmare for new car dealers that paperwork sitting on desks waiting to be processed could exhaust the $3 billion program weeks before it was supposed to end.
“I talk to dealers around New Jersey who tell me that they might have only entered half of the deals they have so far because there are so many issues that have cropped up,” said James Appleton, executive director of the New Jersey Coalition of Automotive Retailers.
6) Rep. Joe Sestak, D-Pa: “Failure to address delays with the cash for clunkers program will adversely harm auto dealers in the commonwealth of Pennsylvania and around the country — undoubtedly forcing many out of business.”
Rep. Joe Sestak, D-Pa., called for “immediate action” to address the problem in a statement Sunday, after writing a letter to President Obama Saturday expressing his concerns.
In the letter, Sestak said only 2 percent of claims have been paid and that four of every five applications have been “rejected for minor oversight.”
In recent days, auto dealers across the country have been complaining that the reimbursement payments are slow to process. And they said some of their applications were being rejected because of apparent procedural issues. The statistics Sestak cited suggest those complaints are not based on isolated incidents.
“Failure to address delays with the cash for clunkers program will adversely harm auto dealers in the commonwealth of Pennsylvania and around the country — undoubtedly forcing many out of business,” he said in a statement.
5) New York Car Dealer: “It was well-intended, but the actual actions of it, have been dismal.”
4) Peter Schiff: “One of the Stupidist Things We Can Do Right Now.”
3) Dealers on Rising Used Car Prices: “I think it’s the worst thing we’ve ever done.” “What the Heck is the Government Doing Here?”
Before Cash for Clunkers, Jerry Frazier, owner of Save-A-Lot Motors in Cairo, Ga., bought most of his cars from local new car dealers, but “the cars I normally buy they are now crushing, so my source of cars is drying up.”
“I think it’s the worst thing we’ve ever done,” he said.
Kelley Blue Book projected last week that the newly expanded Cash for Clunkers plan would take at least 750,000 used autos out of the marketplace — a nearly 5 percent contraction in supply based on 2008 inventories.
That’s enough to have “an immense impact,” inflating used car prices and leaving lower-income buyers behind, said Alec Gutierrez, KBB’s senior analyst of vehicle valuation.
With economists projecting inflation of as much as 15 percent in used car prices, dealers say they’re already feeling the impact.
Eric Moore, president of Excalibur Auto Group in Kennewick, Wash., said he was seeing sharply reduced inventories at auctions where dealers buy entire lots of used cars.
“The prices at auctions are tremendously higher,” Moore said.
And “if we have to pay more for the used cars,” said Bob Kiassat, owner of Chico Top Imports in Chico, Calif., then “we have to pass it to the customer.”<
When Jeff Carlson, owner of Warehouse Auto in Waterloo, Iowa, heard about the program, “my first thought was, what in the heck is the government doing here?” he said.
“There’s folks out there that that is their price range — that used vehicle that’s in that $3,000, $4,000, $5,000 price range,” he said. “All of a sudden, they’re out of the marketplace.”
Taking old cars out of the market doesn’t reduce inventories just for used car buyers and sellers. It also squeezes the supply of auto parts for mechanics and engine-component retailers.
For “the person who can’t afford a new car and they want to rebuild their car, well, we don’t have those [engine] parts to offer them anymore because they’re destroyed,” said Chris Clos, general manager of Abco Fridley Auto Parts in Fridley, Minn., near Minneapolis.
Cash for Clunkers, said Curtis Buss, who sells used parts at Quincy Auto Salvage in Quincy, Ill., is “going to hurt all of them.”
“You’ve got your local shops that rely on used auto parts, and the price of those parts is going to go up just because they’re not out there anymore,” Buss said. “The guy who is out there trying to do it himself is going to pay more because there is less of it to buy.”
The bottom line, said Norman Wright, chief executive of Stadium Auto Parts in Denver, is that the program will most hurt the people who can least afford it: lower-income Americans.
“A lot of low-income people can’t afford any other type of car, and if there’s a shortage of those engines and their vehicles need one, then those people are going to have a hard time finding a recycled engine to get their car back up and running,” Wright said.
2) Man in Video: “I think I can Obama My Ford Faster Than He Can Obama His Ford.”
Note: Obama as a Verb
1. to ruin the structure, organic existence, or condition of – by government meddling
2. to put out of existence – by government policy
< Dude, my job just got Obama’d >
1) Keith Martin, publisher of Sports Car Market magazine: “Assisted Suicide Program for Autos.”
The government funding [of cash for clunkers] amounts little more than an assisted suicide program for autos.
Cash for Clunkers Is Another Government Failure – WSJ.com. (n.d.). Retrieved August 23, 2009, from http://online.wsj.com/article/SB10001424052970204884404574366664026140786.html?mod=googlenews_wsj
Silva, M. (n.d.). Obama talks with skeptics on radio show — latimes.com. Retrieved August 23, 2009, from http://www.latimes.com/news/nationworld/nation/sns-health-obama-radio-smerconish,0,3650948.story
Automotive News Video. (n.d.). Retrieved August 23, 2009, from http://www.autonews.com/ANplayer.html?bcpid=1417302180&bclid=1886
Mayersohn, N. (n.d.).Unintended Consequences of Clunkers Law – Wheels Blog – NYTimes.com. Retrieved August 23, 2009, from http://wheels.blogs.nytimes.com/2009/08/10/unintended-consequences-of-clunkers-law/
Mouawad, J. (n.d.). High Carbon Cost for ‘Clunkers’ Program – Green Inc. Blog – NYTimes.com. Retrieved August 23, 2009, from http://greeninc.blogs.nytimes.com/2009/08/14/high-carbon-cost-for-clunkers-program/