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Showing posts with label cashforclunkers. Show all posts
Showing posts with label cashforclunkers. Show all posts
This is more than a bit overdone, but this is probably the most critical segment SNL has had on Obama

This is more than a bit overdone, but this is probably the most critical segment SNL has had on Obama

Part of this was very good, particularly when the Chinese President asks how we were going to pay them back if Obama's policies "to save money involve spending even more money." I think that some of the critiques could have been sharper (did the cash for clunkers program actually help, will the government health insurance program actually reduce the number of uninsured), but this is probably the best you can get out of SNL and overall it was useful. The Chinese President so frequently bending over was somewhat overdone.
Did the cost of "Cash for Clunkers" program run $24,000 per additional car sold?

Did the cost of "Cash for Clunkers" program run $24,000 per additional car sold?

Edmunds has this:

If you believe the statistical analysis of Edmunds, perhaps the program wasn't so terrific after all. The industry research juggernaut claims that of the 690,000 vehicles sold under the program, only 125,000 of those sales went to people who weren't going to purchase a new car in 2009. The result, says Edmunds, is that the $3 billion spent for C4C ended up spurring only 125,000 sales at a cost of $24,000 per vehicle. Further, Edmunds claims that October's sales would have ramped up even more than what current projections indicate.

There doesn't seem to be too many industry experts who disagree with Edmunds' assessment that the Clunkers program only generated 125,000 additional sales, but C4C wasn't just about selling cars and trucks. Ford industry guru George Pipas told CNN Money that the Blue Oval feels the program was a success, adding "The whole purpose of the program was to provide some kind of catalyst to kick-start the economy, and by all accounts the extra production that was added this year was a boost to the economy." . . . .


Fox News has this.


The drop off in new car demand in September puts sales as low as they have been over the last year.

This is what an economic strategy of pulling it forward looks like. In August, car buyers were going nuts with a $4,500 incentive to trade clunkers in for brand new cars. Many warned, of course, that these sales would simply end up decreasing future sales, getting us nowhere. Well, September's here, and... yeah. A monthly sales rate of over 14 million units annualized quickly fell to just above 9 million.
Durable goods dropped 2.4 percent in August

Durable goods dropped 2.4 percent in August

Even the Associated Press can't put too much of a positive spin on this, though they do try.

Orders for goods expected to last at least three years fell unexpectedly in August due mainly to a drop in demand for commercial aircraft. The worst reading since January for durable goods is evidence that any recovery in manufacturing will be slow and gradual.
Economists were disappointed with the report, which followed similarly weaker-than-expected data on existing home sales Thursday, but most said it reflected the uneven nature of the economy as it transitions out of the worst recession since the 1930s. . . .
Autos and auto parts orders posted a 0.4 percent gain in August, after rising 1.6 percent in July, according to the government data. The sector received a major boost last month from the Cash for Clunkers program, which provided consumers rebates of up to $4,500 for trading in older cars for newer, more fuel-efficient models. The program, which ended last month, boosted auto sales 30 percent in August. . . .


Meanwhile existing home sales fell:

The National Association of Realtors said Thursday that sales dropped 2.7 percent to a seasonally adjusted annual rate of 5.1 million in August, from a pace of 5.24 million in July. . . .


In past months when sales of new homes rose, prices were falling. This market has a way to go before it improves.

This is probably the worst news.

"the estimated earnings growth for the overall S&P 500 for the third quarter now stands at negative 24.7% compared with an estimated growth rate of 20.9% on July 1, according to Thomas Reuters." . . .
The Aftermath of the Clunkers program

The Aftermath of the Clunkers program

Is this what the authors of the Cash for Clunkers program expected it to do?

But once the federal money dried up, so did the sales rally. Now, customers at dealerships like Silko Honda in Raynham are few and far between, and inventory is once again accumulating. . . .

“It was probably, in the end, a complete waste of taxpayer money,’’ said John Wolkonowicz, a senior auto analyst at IHS Global Insight, Lexington forecasting firm. “The dealers, who were supposed to be the primary beneficiaries, many were forced into cash flow problems because the government didn’t pay them in a timely fashion.’’

From the outset, there were problems with the Car Allowance Rebate System. It was supposed to start July 1 but was delayed until July 24. The rules were complicated, and the list of qualifying vehicles and other requirements changed repeatedly. And in addition to the formidable paperwork, the government website set up to process the deals kept crashing, creating a backlog.

Ray Ciccolo, president of Village Automotive Group, which operates eight Boston-area dealerships, said he has received $400,000 from the government, but that is only half of what he is owed. Ciccolo was in Washington last week to hear Transportation Secretary Ray LaHood address the National Automobile Dealers Association. Ciccolo said LaHood pledged to have all claims paid by the end of this month.

“There isn’t much you can do except wait,’’ Ciccolo said. . . . .

“This program was very good at getting product off the lot, but there haven’t been long-term benefits,’’ he said. “Dealers are reporting that showrooms are pretty dead right now.’’

Wolkonowicz said the fall slowdown may have been worsened by the program because many buyers came out early to take advantage of the program instead of waiting until now to shop. . . . .
"Cash for Clunkers: What Is Seen and What Is Not Seen"

"Cash for Clunkers: What Is Seen and What Is Not Seen"

From my friend David Hirshleifer at Psychology Today:

Our cognitive limitations often debase political debate, making politics a battle for voters' attention. Hence, the power of soundbites and slogans, such as "Cash for clunkers." The way to make a policy attractive is to hide the damage it does, and make its alleged benefits salient. This point was made vividly by Frédéric Bastiat in his 1848 essay "What is seen and what is not seen." He points out, for example, that even a nutty policy like going from house to house breaking windows can seem attractive as a way of providing employment to glaziers. What is not seen is that the resources people spend getting their windows repaired might otherwise have been devoted, for example, to buying shoes. So even in the short run breaking windows is not a stimulus, because it puts the cobbler out of work. And in the long run, it reduces the total wealth of society. . . .
More broken promises by Obama on transparency

More broken promises by Obama on transparency

While there are a few stories about these broken promises, whole books could be written on them at this point. While I don't think that this stimulus package has anything to do with creating new additional jobs, the Senate should refuse to pass the stimulus until after this information is released. From the Associated Press.

The Obama administration is refusing to release government records on its "cash-for-clunkers" rebate program that would substantiate—or undercut—White House claims of the program's success, even as the president presses the Senate for a quick vote for $2 billion to boost car sales.

Transportation Secretary Ray LaHood said Sunday the government would release electronic records about the program, and President Barack Obama has pledged greater transparency for his administration. But the Transportation Department, which has collected details about 157,000 rebate requests, won't release sales data that dealers provided showing how much U.S. car manufacturers are benefiting from the $1 billion initially pumped into the program.

The Associated Press has sought release of the data since last week. But the public and Senate Republicans demanding more information will have to wait for details because federal officials running the program don't have time to turn over data delivered by car dealers, said Rae Tyson, spokesman for the National Highway Traffic Safety Administration.

LaHood said in an interview Sunday he would make the electronic records available. "I can't think of any reason why we wouldn't do it," he said.

DOT officials already have received electronic details from car dealers of each trade-in transaction. The agency regularly analyzes the data internally, producing helpful talking points for LaHood, White House spokesman Robert Gibbs and other officials to use when urging more funding. . . .
Government spying on computers

Government spying on computers

This is pretty outrageous. The unwillingness of the government to discuss what happened is also disappointing. The Washington Times has this:

It's always important to read the fine print. Car dealers were reminded of that rule when logging onto the government's "cash for clunkers" Web page. In return for information about the Car Allowance Rebate System, the National Highway Traffic Safety Administration (NHTSA) required that dealers surrender all privacy on their private computer networks.

NHTSA's warning said: "When logged on to the CARS system, your computer is considered a Federal computer system and is the property of the U.S. Government. Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected and disclosed to authorized CARS, [Department of Transportation] and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign."

When asked if similarly intrusive warnings were posted in the past, NHTSA spokesman Debbie Boykin told us: "I haven't heard of that happening before at all." It was only at the close of business yesterday that Sasha Johnson, press secretary for the Department of Transportation, informed us that the warning had been replaced with a note saying, "We are working to revise the language." Despite repeated requests, no explanation was ever offered for why the original warning was used or why it was taken down.

We're curious why civil rights advocates aren't up in arms over this invasion of privacy. . . . .
A beautiful Volvo being destroyed under the "Cash for Clunkers" program

A beautiful Volvo being destroyed under the "Cash for Clunkers" program

Will someone please explain to me how the country is wealthier with this type of destruction? The video can be seen here.

Of course, the government even has a 136 page booklet on how the cars should be destroyed.

To receive government reimbursement, auto dealers who offer rebates on new cars in exchange for so-called clunkers must agree to "kill" the old models, using a method the government outlines in great detail in its 136-page manual for dealers: Drain the engine of oil and replace it with two quarts of a sodium-silicate solution.

"The heat of the operating engine then dehydrates the solution leaving solid sodium silicate distributed throughout the engine's oiled surfaces and moving parts," says the National Highway Traffic Safety Administration publication. "These solids quickly abrade the bearings causing the engine to seize while damaging the moving parts of the engine and coating all of the oil passages." . . .

New Fox News Op-ed: Cash for Clunkers Is No Success

Here is the beginning of my new piece up at Fox News.

Only in Washington could a program that is spending money 13 times faster than planned be labeled a "success." The "cash-for-clunkers" program ground to a halt last week because in less than a week, a program that was supposed to last until November 1, had spent the entire $1 billion allocated to it. Let's just hope that the government takeover of the rest of the health care industry doesn't result in similar "success."

Unfortunately, the House voted late last week by an overwhelming 316 to 109 margin to spend $2 billion more on the program. The Senate is scheduled to take up the issue this week.

The "clunkers" program is supposed to stimulate the economy as well as to reduce greenhouse gases. To encourage new car sales, owners of older cars get either $3,500 or $4,500 when buying a new car. The program has been plagued with just about every problem possible. The Department of Transportation computer system has been unable to register deals made under the program. Car dealerships find themselves saddled with expensive ad campaigns touting the government subsidies at the same time the subsidy program is in limbo. . . .


Amazing: If you value your privacy, be very careful with the "Cash for Clunkers" program

Glenn Beck deserves a lot of credit for pointing this out. This is the privacy agreement for the "Cash for Clunker" website that you sign into when you do the program.



Always a rush, always a panic to pass things

Always a rush, always a panic to pass things

As soon as they start yelling that things must be passed instantly, you that they realize that they don't have a case. Last Friday everything was fine, but now we have to do it by Tuesday. From the WSJ:

WASHINGTON -- Transportation Secretary Ray LaHood said Sunday that unless the Senate approves $2 billion in additional funding, the Obama administration could be forced to halt as early as Tuesday the "cash for clunkers" program that has become one of the most visible and fast-acting of the government's economic-stimulus programs. . . . .
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