Will "Clunkers" Save The Economy?

Even those who thought it up were surprised by how successful the "Cash for Clunkers" program was. Not me. I knew it would be huge. This wasn't because I thought it would be so easy for people to take advantage of it. In fact, it wasn't. There are rules. For example, the "clunker" has to have at least 80,000 miles on it. Some people probably drove their cars around the block over and over again to try to get the mileage up (I'm still 39,206 miles short). But I'm sure they were in the minority. The reason I was so certain that it would be a success is because it's just so American.

Americans like new things. We're not like people in other countries who boast that they live in a building that's hundreds of years old. Americans brag that they live in the newest house on the block. We look down upon older things. Notice that the program was not named, "Cash for Classics Cars." In music, an "oldie" might have been recorded in the 90's. Ballplayers are traded when they become "old" -- like when they're thirty. So I knew that Americans would jump at the chance if a program helped them get something new.

Because of the positive response of the program, it wasn't surprising that the House of Representatives quickly passed a bill to extend it. And politics being politics, it wasn't surprising that the Senate balked at the extension despite the country's enthusiasm for it.

Of course, not everyone in the House was for it. Texas' Jeb Hensarling mocked it, saying, "Maybe we should have a 'Cash for Cluckers' program and pay people to eat chicken." Since I like chicken, I wouldn't necessarily be against that idea. On the other hand, I'd oppose "Cash for Brussels sprouts."

I understand what the witty Congressman was saying. In this program, we taxpayers are basically giving money to people to buy cars. For some reason, that doesn't bother me. I'm a lot happier with this deal than with our giving money to the people who helped our economy collapse. I wonder why Congressman Hensarling wasn't so vocally opposed to that first Wall Street bailout plan at the end of the Bush administration. Maybe back then, he couldn't think of an equally "clever" slogan like, "Bucks for Brokers."

I like "Cash for Clunkers." It has put new, fuel-efficient cars on the streets, and infused the economy with much-needed money. It hasn't only helped the car industry and related businesses. People who work at car dealerships shop just like everybody else. So that woman who bought a new Chevy last week might be responsible for the guy across the country selling more fancy dog food. When future students study this phenomenon in college, it might be known as the Camaro-Kibble Effect.

Equally importantly, "Cash for Clunkers" has been a positive symbol. It says to America, "Hey, some programs actually work. Maybe we really can get out of this recession." And there's got to be the feeling that if the ailing auto industry can be helped, there's bound to be hope for Joe's Hardware store.

It's a big opportunity for the American auto industry. More than half of the cars purchased under this plan have been American makes. If these shiny new fuel-efficient cars turn out to be great, more people will buy them even without the "Cash for Clunkers" program. Of course, if they turn out to be junk in a year or so, the industry will be hurt even more, and those who bought these cars will feel that all they got was a newer clunker.

But if the economic experts do all their analyses of "Cash for Clunkers" and come up with positive results, watch for copycat programs. The big one will be "Cash for Firetraps." If people want to get rid of their old, falling-apart houses and buy new ones, the government would help them out. The housing industry won't say "no" to that idea.

Yes, "Cash for Clunkers" tapped into the very American love of getting rid of the old and acquiring the new. I just hope that its success won't make people go overboard. If so, I'm really in danger of my wife trading in her clunker of a husband for a new model. And believe me, I've got more than 80,000 miles on me.

Lloyd Garver has written for many television shows, ranging from "Sesame Street" to "Family Ties" to "Home Improvement" to "Frasier." He has also read many books, some of them in hardcover. He can be reached at [e-mail]. Check out his website at lloydgarver.com and his podcasts on iTunes.

Comments

[funkalicious]

Successful you must be kidding So much BS has been spun about the so called success of this giveaway. We paid out 60 billion to the Auto industry and you think throwing another 3 billion will keep the merry go round going?

Giving money to people who supposedly qualify for thousands of dollars in car loans is smart or even good politics?

Since when do you begin gifting uppper middle class SUV drivers as more deserving of a tax cut than anyone else? At least with the stupid Bush program we all got 600 bucks rich and poor alike.

This policy is beyond F#cked up I don't support giving money to wall street bankers Like Obama did either. this policy as some revenge of the upper Middle class Suv drivers is another form of total Bullshit. We have devolved into a nation of clunker politics and bailouts.

[martinfrosa]

Of course it was successful. Free money for everyone! The "Santa Claus" president lives!

[Merlin7]

Some Democrats' flippant attitude toward spending tax dollars is one reason Obama's approval ratings are way down. I voted for Obama, but didn't realize his administration would crank up the printing presses are start papering the nation with $100 bills backed only by the thriftiness of Chinese workers.
The Cash for Clunkers programs is particularly offensive because it's basically a huge giveaway to already wealthy car dealers. You had to be blind not the notice that most dealers merely raised the prices of their new cars in anticipation of the program, so buyers ended up paying the original price anyway, even after the government helped. Also, the mileage requirements are a joke compared to Europe's tough standards. Our "fuel-efficient" cars get only 20-something mpg while Europe's get twice that. Of course, Europe is governed by serious people rather than the strange mix of idealists, gangsters, religious fanatics and incompetents who call the shots here in the U.S.

[JayDubs]

I bought a car through this program, and the dealer didn't raise the prices on me. Of course... I negotiated the price before July 24 and didn't tell him until afterward I was going to trade in a clunker (a 13 year old minivan), so I don't know how it's going now. My new vehicle gets 30+ mpg and is a ULEV- ultra low emissions vehicle. It basically doubled my fuel efficiency. Now, I'm not saying it always works out that way, but sometimes the results are exactly what were hoped for.

[funkalicious]

You hoped to rip off your neighbors so you can buy a new car?

I guess Obama bought your vote.