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The Spectacle Blog
Duh. After fleecing the taxpayers of $3 billion in the form of "Cash for Clunkers," the auto industry has woken up to ugly reality: the program likely accelerated rather than increased sales. After the bout of binge drinking comes the hangover.
Many auto industry analysts and dealers expect sales volumes to fall now that the program is over. They worry that many people who took advantage of the program were merely accelerating purchases they would have made later in the year.
If that's true, the premature sales could hurt automakers, which increased production in the third quarter to replenish clunker-depleted inventories that had already grown low because of factory shutdowns over the summer.
Because there's a lag time between production and getting a vehicle to a dealership, the new vehicles "will hit when there's a lower demand," said Jeff Schuster, executive director of forecasting at the auto industry research firm J.D. Power and associates.
"There might not be as many people to buy because they bought during the clunker program," he said. "And if at the same time there's less of an incentive program from carmakers, you could have fewer people buying. That could stall the recovery we're in."
Jeremy Anwyl, chief executive of Edmunds.com, another automotive research group, agreed.
" 'Cash for Clunkers' created a nice little blip," he said. "We'll look back and say, 'Nice party, but the hangover is awful.' "
Suckers!
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More Blog Posts by Doug Bandow
http://spectator.org/blog/2009/08/25/now-the-auto-industry-is-worri
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grzmlyk| 8.25.09 @ 9:02AM
Personally, I think the program was an unmitigated success. I mean, giving money to people who otherwise wouldn't have it, without repercussions (except for those phony ramifications drummed up by callus Republicans trying to prevent the common man from grabbing his fistful of cash from the mountain of money that's lying around)? Totally cool, dude.
We should give everyone (well, every victim of white oppression) $4,500, perhaps on a weekly basis, to buy whatever they want (I'm sure Krugman the Keystone Keynesian would approve!).
If major appliances are next in the "clunker" repertoire, I'm all for it. If Cash for Clunkers morphs into Cash for the Carribean, who's to say it isn't every American and illegal alien's right to take a vacation on the taxpayers' dime? Hello!!!! It's right there in the constitution - the Pursuit of Happiness, right?
And I'm sure the maturing cell phone industry could use a shot in the arm. Why not a Cash for iPhones Program? You can't be seen with an 18-month old iphone, you know. Tres Gauche.
Is this a great country or what? We live in heady times. After 5 or 6 centuries of enduring all manner of governments susceptible to corruption, stupidity, reactionism, pandering, lying, inertia, patronage, tribalism, inefficiency, avarice, vengeance, folly and an overall wickedness that reflects the beastly nature out of which all governance is carved, Barack Obama the Magnificent has finally delivered unto us the altruistic coup de gras: Government with a Midas touch - give or take a few dozen trillion in debt.
And indeed, thanks to the cracker-jack liberal mind, we have, since the days of Wilson, been moving unerringly toward this momentous Utopia. Why, everything Big Government's caring and unselfish fingers (unsullied by captialist GREED) comes into contact with turns into perfect, socially-engineered, newly-minted gold. Social Security, Medicare, Medicaid, the education system, Big Agra, Ethanol, Amtrak, welfare, the post office (to name a few) - it's as if the Lord God (if there were one) had broken off a little piece of Lake Paradise and poured it right there into the pit of Washington DC, the wonderous ripples from which emanate goodness and prosperity to the farthest reaches of the globe, taking from the undeserving rich and giving to the deserving poor. Tis a veritable symphony of righteousness.
Personally, I can't wait for the benefits of this pristine altruism, the sheer wonderfulness, of the government's wisdom to be visited upon my body. Why should I or my family make decisions about my health care when that's what government does best? Yes, yes, I know bloated bureaucracy is the quicksand into which the efficient allocation of resources has ALWAYS fallen in the past, but THIS TIME IT'S DIFFERENT! Why, I can't WAIT for a career paper pusher somewhere in the bowels of a non-descript office somewhere in Maryland, embittered by a failing marriage, a static career, a drinking problem and a mandate from his jerk of a boss to approve fewer expensive procedures, to tell me, "Aging Taxpayer #231,438,884" whether I really need that heart valve replacement.
Oh joy, oh rapture: Can you imagine my face when I get the letter from Washington?
I mean, with a track record like the US Government's, what could go wrong?
The Silver Fox| 8.25.09 @ 1:20PM
grzmlyk's comment makes as worthy reading as the article itself!
Solo| 8.25.09 @ 3:26PM
Yep...Ole' Grz is in rare form today!
To the article....
I don't see how anyone could be surprised by this. Of course there's going to be a hangover after this orgy of spending other people's money. What the hell did they expect?
Now that they've spent a week in Vegas doing shots of Mescal and snorting coke from a hooker's arse, staggering back to reality is going to be a little tough.
When it's all said and done, we won't have accomplished a damned thing. The auto dealers won't have made a single dime more over the course of an entire year while we've added to the debt by handing out money that we didn't have to people who really didn't need it.
Oh....and by destroying the "clunkers" we've taken a large number of used cars off the market driving up prices -thus reducing sales and costing more people their jobs!
Genius! Shear genius!
"Yes We Can"!
Kurt| 8.25.09 @ 4:00PM
Wait till the folks get the TAX BILL for the "$4,500" in INCOME the 'G'overnment "GAVE" to them!!!!! HAHAHAHAHAHAHA!!!!! SUCKERS!!!!
jr| 8.25.09 @ 4:36PM
My my,"the auto industry has woken up to ugly reality." If you had asked a few questions to a fairly intelligent sophomore (home schooled) the kid would have been able to guess this fairly easy. Now that his parents spent several thousand for the new car and mortgaged it, they will pay a sizeable chunk for more auto insurance and more local taxes. What a bargain!
Richard Baker| 8.25.09 @ 6:12PM
My friend in the auto business told me that the number of forms per "Clunker" sale was between 65 and 70 and this on top of all the other forms required by State and Federal mandate plus financing. Wonder what the cost of all this paperwork was per car.
Campy| 8.26.09 @ 5:14PM
Grzmlyk,
You may not get back here to see this, but your post now seems pretty scary; did you invoke this?!
'Cash for Refrigerators' Debuts in Fall. Really.
http://www.reuters.com/article.....1520090825