'Cash for Clunkers' Was a Sign Long Before Obamacare

Wednesday, 06 Nov 2013 09:52 AM

By George Will

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Barack Obama's presidency has become a feast of failures whose proliferation protects their author from close scrutiny of any one of them. Now, however, we can revisit one of the first and see it as a harbinger of progressivism's downward stumble to HealthCare.gov.
 
"Cash for Clunkers" was born with Obama's administration as a component of his stimulus. Its fate is a window into why the recovery has been extraordinarily weak, and into what happens when progressives' clever plans collide with recalcitrant reality.
 
Consumers could trade in older vehicles and receive vouchers toward the purchase of a new, more fuel-efficient car. The vouchers were worth $3,500 or $4,500, depending on the difference in fuel economy between the trade-in and the new purchase. The program's purposes were economic stimulation and environmental improvement.
 
Now a study by Ted Gayer and Emily Parker, published by the Brookings Institution, a mildly liberal think tank, concludes: "The $2.85 billion in vouchers provided by the program had a small and short-lived impact on gross domestic product, essentially shifting roughly a few billion dollars forward from the subsequent two quarters following the program."
 
Most of the 677,842 sales were simply taken from the near future. That many older vehicles were traded in — and, as required by law, destroyed. Gayer and Parker accept as reasonable an estimate that the cost per job created by the program was $1.4 million.
 
Although the vouchers did not come close to covering the cost of the new cars, voucher recipients seem not to have reduced their other consumption. This, say Gayer and Parker, suggests that participants in the program "were not liquidity constrained," which is a delicate way of saying "there was no change in other consumption patterns," which is a polite way of saying "cash for clunkers" merely caused people to purchase vehicles "slightly earlier than otherwise would have occurred."
 
Because the program was not means tested, it had only a slight redistributional effect of the sort progressives favor: Voucher recipients had lower incomes than others who bought new cars in 2009. Against this, however, must be weighed the fact that the mandated destruction of so many used vehicles probably caused prices for such vehicles to be higher than they otherwise would have been, meaning a redistribution of wealth adverse to low-income consumers.
 
As for environmental benefits from Cash for Clunkers, the reduction of gasoline consumption was small and "the cost per ton of carbon dioxide reduced by [the program] far exceeds the estimated social cost of carbon." But it was — herewith very faint praise — more cost effective than the subsidy for electric vehicles or the tax credit for ethanol.
 
Cash for Clunkers lasted 55 days and ended with confusion that was a preview of things to come. The New York Times (Aug. 1, 2009) explained the final surge of demand for clunker funds: "Around the country, dealers had put off the laborious task of applying for the rebates . . . which requires entering the 17-character identification numbers of each vehicle to be scrapped, scanning images of proof of insurance and filling out other paperwork.
 
"The computer system was overloaded, according to the dealers. They said they would finish one page in the application, hit enter and nothing would happen. Eventually a message would appear notifying the dealer that the page had 'timed out.' Tom Frew, the business manager at Galpin Motors in Los Angeles, said that he needed 35 tries to register just one of the company's 11 dealerships on the day that the program opened because of problems with the government website. On Friday, he spent an hour processing just one rebate application, he said." 
 
The recovery from the recession began in June 2009; 53 months later, vehicle sales still have not yet reached the pre-recession peak. Cash for Clunkers was prologue for the government's vastly more ambitious plan to manage healthcare's 18 percent of the economy.
 
The present, too, is prologue. There currently is heated debate about the Common Core, whose advocates say it merely involves national academic targets and metrics for primary and secondary education. Critics say it will inevitably lead to a centrally designed and nationally imposed curriculum — practice dictated by targets and metrics. Common Core advocates say, in effect: "If you like your local curriculum, you can keep it. Period."
 
If you believe this, your credulity is impervious to evidence. And you probably are a progressive.
 
George F. Will is one of today's most recognized writers, with more than 450 newspapers, a Newsweek column, and his appearances as a political commentator on ABC. Read more reports from George Will — Click Here Now.
 
 

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

GOP's Wehby Gaining in Oregon

Monday, 28 Jul 2014 08:03 AM

Oregon is one of the 18 states and the District of Columbia that have supported Democratic nominees in at least six cons . . .

GOP Candidate Challenges Calif. Establishment

Thursday, 24 Jul 2014 09:24 AM

Today, California is a one-party state: Democrats have 2-1 majorities in both legislative chambers and 40 of 55 members  . . .

Supreme Court Shoots Down Progressives

Monday, 07 Jul 2014 11:20 AM

Twice last week the court played its indispensable role as constable, policing portions of this forest where progressivi . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved