Last summer, I wrote a column for the Des Moines Register warning folks that the misplaced logic of President Obama’s Cash for Clunkers program might be extended to other segments of the economy. I noted that from a simple supply and demand perspective these programs harm the economy by needlessly destroying usable goods – in the case of Cash for Clunkers – drivable used cars. I wrote,
Both (liberals and conservatives) expressed concern that this Obama Administration brainchild is harmful to charities and the poor. As columnist Elizabeth Hovde explained, ‘[t]hese working-condition vehicles could have gone to used car lots, available to people who can’t afford new cars. Or they might have found their way to charitable organizations or relatives in need.’
Read my entire article here.
Obama proclaimed Cash for Clunkers a great success. Well, the numbers don’t lie. In the Boston Globe, columnist Jeff Jacoby explains how Cash for Clunkers negatively impacted the economy. Jacoby writes,
In the market for a used car? Good luck finding a bargain: The price of ‘pre-owned’ vehicles has climbed considerably over the past year. According to Edmunds.com, a website for car buyers, a three-year-old automobile today will set you back, on average, close to $20,000 — a spike of more than 10 percent since last summer.
Jacoby also foresaw the economic folly of Obama’s plan, he continues,
No great insight was needed to realize that Cash for Clunkers would work a hardship on people unable to afford a new car. ‘All this program did for them,’’ I wrote last August, ‘was guarantee that used cars will become more expensive. Poorer drivers will be penalized to subsidize new cars for wealthier drivers.’
Read Jacoby’s entire article here.
It seems the only group who didn’t foresee Cash for Clunker’s disastrous effects was Obama and his economic team. When supply of a good (like used cars) is drastically reduced, the price will skyrocket. But here is the dirty little secret: liberal environmentalists couldn’t care less. To enact an extreme environmental agenda, the green police plan to raise prices on all sorts of goods.
Recall during the campaign when Obama told the San Francisco Chronicle “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” Watch the YouTube clip here.
If this sounds cynical do not forget that under the guise of saving a suffering nation the President enacted a stimulus plan that was little more than 800 billion dollars in Pelosi pet projects, pork barrel spending, and kick-backs to democrat districts.
As Secretary of State Hillary Clinton and Obama’s Chief of Staff Rahm Emmanuel boldly announced, “a crisis is a terrible thing to waste.”
The problem is that if the President’s continues to push policies that conflagrate the present economic crisis he will soon run out of our money to waste.