Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“I consider Paine our greatest political thinker. As we have not advanced, and perhaps never shall advance, beyond the Declaration and Constitution, so Paine has had no successors who extended his principles.”     Thomas Alva Edison

August 21, 2009

Quote Of The Day

by Brad Warbiany

Earlier today, I provided one more reason why corn-based ethanol mandates/subsidies might be the dumbest government program ever. Chris Edwards of Cato@Liberty suggests that Cash for Clunkers might win that honor. I have to hand it to him, he provides a few good reasons supporting his case. All good reasons, but I’ll stick with ethanol, because at least Cash for Clunkers is dead.

That being said, I hadn’t thought about this criticism of Cash for Clunkers:

Taxpayers were ripped off $3 billion. The government took my money to give to people who will buy new cars that are much nicer than mine!

I love my truck. It’s a 2000 Ford Ranger XLT, which I bought used six years ago, and it’s been paid off for more than four years. It qualifies for Cash For Clunkers, and it’s certainly worth less than $4500, so I’d have made a net gain by joining the program. I chose not to take part, for a few reasons:

1. I like the truck — it meets every need I have for a vehicle, and it the most comfortable thing I’ve ever driven
2. I don’t want a car payment — despite being able to afford it
3. The vehicle I want next — a Jeep Wrangler — wouldn’t have qualified as a higher-mileage vehicle
4. I refuse to buy new cars. I’ll let some other sucker take the early depreciation hit

But I never thought to what extent my tax dollars actually subsidize the purchase of cars far nicer than what I drive. I’ve criticized the program before, because the only people that were likely be able to afford a brand new car weren’t exactly poor, and were probably getting rid of a spare vehicle cheap enough to qualify. Couple this with the fact that it hurt charities and the poor by artificially draining the used car market, and it’s about as simple of a reverse-Robin-Hood program as you can design.

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27 Comments

  1. Cash for clunkers was a ridiculous farce. Just another wealth transfer scheme, only this one also resulted in the destruction of property that still has value.

    Keep the Ranger as long as you can, I sold mine a few years ago and miss it very much. It was a great truck, very comfortable, fun to drive and easy to fix.

    Comment by John222 — August 21, 2009 @ 4:57 pm
  2. On top of it all, how much did this actually do for the environment? Most environmentalists who were serious about it would be dead set against a program which increased demand for new cars because producing a car releases a lot of pollution. Even using this credit to buy a Prius or something is a net loser once this is taken into account.

    Comment by Quincy — August 21, 2009 @ 4:57 pm
  3. I was thinking the same thing Quincy. And besides, no matter how ‘environmentally conscious’ someone can be when destroying a car, you are still going to have some sort of waste/pollution going on too. Just the tire production alone for the new vehicles is probably a pretty environmentally unfriendly endeavor.

    Quite honestly, if they just wanted to throw $3 billion around so they could say they’ve tried to make an impact on something, they may as well have encouraged the production of hydrogen fuel cell vehicles. (I wouldn’t be for the spending regardless, although I do think hydrogen fuel cell vehicles are really the only logical long-term solution for energy independence)

    Comment by Nick Leavens — August 21, 2009 @ 10:14 pm
  4. Their is a problem when you give cars to charities.They can wind back on the street without proper registration or the transfer is not properly done, so you can get the next owners tickets and violations.

    A dealer told me that most people are buying used cars with their cash for clunkers. The 91 Mazda I had got more gas mileage than 2003 Saturn I have now and it gets 20mpg city.

    You don’t know what people are buying and when you say that someone getting a nicer car than you. That happens all the time. It also sounds very childish.

    Comment by VRB — August 23, 2009 @ 4:09 am
  5. VRB –

    I don’t mind people buying nicer cars than I have, but giving away $4,500 of tax money when we’re running the worst deficit in history to enable people to buy nicer cars than I have is rather annoying. On top of that, the offensive part is the pretense that this helps the environment, as if new car production stops polluting when Democrats control Congress and the White House.

    The fact that people are using these credits to buy used cars is a bonus not intended by the designers of the program.

    Comment by Quincy — August 23, 2009 @ 9:36 am
  6. VRB,

    According to the bill, the program is only supposed to apply to new car purchases.

    The dealer you quote is either mistaken or breaking the rules.

    Regarding charities, are you suggesting it’s better for the “common good” that instead of turning cars over to charities where they might be used by poor people, they have their engines destroyed and get sent to the scrapyard?

    Comment by Brad Warbiany — August 23, 2009 @ 10:13 am
  7. Quincy,
    Just how do I know your statistic is valid or some meme that has been traveling around the net, from some made up source if you can find one.

    Brad,
    I may not have under stood if he was referring to the rebate. He said that while I was asking how the rebate effected his business. It may be, regardless of the rebate, that his customers preferred to buy used, because of their economic situation.

    There no shortage of cars that could be donated and you can not say that a person would do that if they didn’t get the rebate. I just mentioned the hazards of donating, because a coworker of mine had those kinds of problems and the donation had been to a reputable charity.

    I think those charities have the cars auctioned off for the money, they do not directly give them to a poor person. I think this is when registration problem occur.

    Comment by VRB — August 23, 2009 @ 3:00 pm
  8. VRB –

    Are you really, really going to insist that producing a car does not take a lot of energy? Did it suddenly become possible to produce steel without heating it to 1,800 degrees C? Or did that process suddenly stop taking energy now that the Democrats are trying to stimulate the economy with borrowed money?

    It’s not a meme, it’s common sense, not to mention simple physics. Auto production is a process that’s nasty to the environment, and paying auto dealers to destroy cars is both economic and environmental voodoo.

    Comment by Quincy — August 23, 2009 @ 5:09 pm
  9. Quincy,
    What you say would be meaningful if all cars were built to last?

    Actually I meant that comment for John222. Sorry

    Comment by VRB — August 23, 2009 @ 7:46 pm
  10. VRB

    And to think that I gave my Dodge Stealth to my Church. If there is a problem with registration its because the state can’t keep things straight. As a donor I had to send in the proper forms to the state and sign title to the charity.

    Your source: A dealer….. wow

    Comment by Norm — August 23, 2009 @ 7:48 pm
  11. Norm

    I was writing about two different things. My source about the charity, was someone I worked with.

    Comment by VRB — August 23, 2009 @ 7:56 pm
  12. VRB,

    Cash for clunkers was a program that takes takes tax dollars from some people and gives them to other people. Ostensibly to stimulate spending in the auto market and to provide some kind of environmental benefit for the planet. In the process, a functioning vehicle valued at $4500 is destroyed.

    Follow the money, it goes from those that earned it to the government, to the dealer, to the car companies (not necessarily American car companies).

    Common sense also tells me that some of those who intended to buy a car in the early part of the year may have decided to wait until the government wealth transfer program kicked in. Also, some who may have waited until next year or the year after to trade their vehicle decided to hasten their purchase to take advantage of the “free money”.

    The way I see it, sales have been shifted around, but not really increased. There has been no real environmental benefit. The only thing I know for sure is that tax dollars have been transferred to car companies. What will they do next year when sales drop again?

    Some dealers in my area are offering their own “cash for clunkers” deals. Not using tax money, they are allowed to keep the trade in and resell it.

    There are other impacts. After the engine is destroyed, there are still salvageable parts on the vehicle. These will increase the supply of used parts for higher mileage vehicles, of which there are now fewer available to need the parts. What impact will this have on auto parts dealers? If you need a new engine for one of those vehicles you are out of luck, the price will be higher due to the needless destruction of all those already produced. How will this affect those most likely to be driving older, higher mileage vehicles?

    It’s like they didn’t think past- how can we get more money to the car companies and in the process get more people to borrow more money? I really doubt most participants paid the balance of the cost of their new vehicle in cash–but I have no data to support this.

    BTW, are registration problems with donated vehicle really that big of a problem? Tickets given to a vehicle prior to a new owner having the vehicle? Perhaps an expose is in order.

    Comment by John222 — August 24, 2009 @ 6:38 am
  13. VRB –

    No worries. You just surprised me. I actually agree with you on most cars not being built to last.

    Comment by Quincy — August 24, 2009 @ 9:25 am
  14. When cash for clunkers was first proposed, car donation charities that they be given the c4c cars. Those cars in goood shape would be sold or given to the poor. Those in bad shape would be junked. Had the program had operated in this way, it would not have negatively impacted auto repair shops, used car dealers, auto parts stores, charity car donation and the poor.

    Comment by Cars4Charities — August 24, 2009 @ 9:30 am
  15. “most cars not being built to last.” I also agree with this. Perhaps I am overly cynical, but could this also have been a consideration?

    I can picture a scenario where someone says “How can we increase sales now and in the future?” with the response being “We need to get people out of their older easier to repair vehicles and into one of our newer vehicles that won’t last as long, we can tell them it will be better for the environment”

    If they want to help the environment, require participants to trade their car for a bicycle with the side effect of alleviating some of the health care problem.

    Comment by John222 — August 24, 2009 @ 10:49 am
  16. VRB & John,

    Automotive technology is improving quite a bit. I think it’s ridiculous that you suggest modern cars aren’t “built to last”. In fact, that’s one of the things that carmakers fear the most — they’re producing cars these days that survive long enough that people don’t have any real need to replace them in the time frame they used to.

    I already spoke of my truck, so I’ll use it as an example. It’s 9 years old and now ticking over 123,000 miles. During that time, it’s had no major mechanical issues. No engine rebuilds. No mechanical issues outside of wear & tear (clutch, brakes, etc). The worst things I’ve seen is a radio failure and a few light bulbs behind the dash burnt out. This is for a truck that wasn’t exactly a “luxury” model when it first hit the scene.

    Any modern car should go 200,000 miles or more. This is as true for the Big 3 domestics as it is for the Japanese and Koreans — I discount the Germans because they suck.

    You simply can’t make the claim that cars aren’t “built to last”. Cars are far more reliable than they were in the 60′s, 70′s, 80′s or 90′s.

    Comment by Brad Warbiany — August 24, 2009 @ 12:01 pm
  17. Brad,
    I think our time frames are a little different. Has your grandmother spoke of a refrigerator which lasted for over thirty years? The Cubans are experts at keeping 50′s cars running over a half century.

    John222,
    I don’t think a car has been easily repairable since the early eighties.

    Comment by VRB — August 24, 2009 @ 12:41 pm
  18. Brad –

    I’ve gotta disagree with you somewhat. Personally, I have no doubt I can get 300,000 miles out of my car, so long as it doesn’t get into any sort of accident. The same is true for lots of passenger cars out there now. 30 or 40 years ago, it was engines failing well before bodies did. Now, with the way cars are built, damaged bodies are usually the killers.

    Comment by Quincy — August 24, 2009 @ 12:48 pm
  19. Yeah things like cars and refrigerators built in the 50′s were a lot easier to fix. Because they were also a hell of a lot simpler. With zero features.

    Easy to fix, versus complicated to fix is different than “built to last” versus “built to NOT last.”

    I’m with Brad on this one.

    I had a 91 Nissan Sentra that I traded in after ten years and 112,000 miles. And all I ever did was change the oil; and get new tires, wiper blades and a couple of batteries. I had a 2000 Honda Accord that got totaled with 68,000 miles on it. Not sure how long it would have lasted – but it was running like a swiss watch up to the day of the crash. Never a single problem. Currently, one of our cars is a five year-old Accord with 72,000 miles – still humming along with nothing but routine service every 3500 miles. I expect to get another 70,000+ miles out of it. My mechanic says there is no reason not to expect that.

    Son has a 2000 Buick Regal; 87,000 miles and counting. Being a GM product, it of course has fit and finish issues, and a total crap electrical system which always has problems of one sort or another (we are now 4 for 4 on replacing the window motors at $350 a pop) – but the engine still runs great.

    And, unlike the tired old 1960 Oldsmobile tubs that poor Cubans have to keep puttering slowly around in, for very short journeys, and keep intact with duct tape and bandaids (because being STUCK in a totalitarian hell hole on their island prison from which there is no legal escape, they HAVE NO CHOICE in the matter)……MY vehicles which are oh so complicated to repair (should they ever need it) have: cool A/C; dvd/tape sound systems; air bags; power everything – windows,locks,and seats; defrosters; cruise control; ABS brakes, etc.

    Comment by southernjames — August 24, 2009 @ 1:07 pm
  20. I grew up in the 60′s. I have memories of riding around in: 1957 Plymouth four door sedan (can’t recall model); 1960 VW Microbus, 1964 VW Karman Ghia Wagon; 1966 Ford Country Estate Wagon (shades of National Lampoon’s Vacation); 1970 Buick Regal (?) Wagon; 1974 Buick LeSabre sedan (first family car I drove and would like to say I got laid in the back seat of the night of my senior prom, but that would be a lie; she did throw up in it though); 1977 Pontiac Lemans Grand Sport (?); 1980 Pontiac Bonneville.

    Then I was out of my own. With my first car. Brand new 1980 Olds Cutlass Supreme Coupe. Financed to the hilt, baby. FM radio, too. Unreliable money pit. CHRONIC problems. But not as big a lemon as my wife’s 1979 Chevy Monte Carlo, which is the most poorly made total piece of shit I have ever had the displeasure of owning. Look up the word “Lemon” and you’ll see her first car. Ah but, it was ALMOST surpassed by her 1986 Ford Taurus. We then turned to the Rising Sun and never looked back.

    Why did my Dad – who was born in 1930 and grew up with cars like Nash, DeSoto and LaSalle, think he needed to get a new car every 3-4 years? (He always purchased new when I was a kid).

    “36,000 miles or three years – whichever comes first — after that, you’ll just start having problem after problem.” That was his credo, and it always came to fruition if he held onto a car.

    Those cars may have been “easy to fix” and perhaps an enterprising (and desparate) Cuban could STILL have them running – but compared to the cars I described in my first post? They were all pieces of crap in comparison.

    Comment by southernjames — August 24, 2009 @ 1:23 pm
  21. Quincy,

    I’m failing to grasp your point. As far as I can tell, car bodies tend to be fine over time unless you crash them. I’d bring up rust, but I actually think that was just as much of an issue with the old cars as the new, so it’s no improvement.

    As James points out, back in the day you’d be looking to get rid of a car after 40-50K miles because it’s going to start getting very expensive to keep it running. Now that is well over 100K (and probably 150K).

    Yes, after a car is 10 years old with 150K miles, the body is likely to show some wear — I know my truck has quite a bit of fade in the paint color due to sitting in the sun. But I’d rather have an old-looking car that runs great than a car which needs an engine rebuild.

    Comment by Brad Warbiany — August 24, 2009 @ 1:52 pm
  22. BTW I would note that I’m in complete agreement with the notion that older cars are much easier to fix. Anyone with a set of wrenches and a little know-how could do most of what is necessary to keep a car running. When I got a cracked head on my 1985 Ford Escort, I was able to take a few weeks, pull the carbs (it actually had carbs!) and the head off, replace it all, and put it back together. Was it difficult? Well, once I learned the trick of plugging vacuum lines with golf tees, it was pretty easy. Too bad I totalled it a week later…

    So yes, they were easier to fix. That’s because they’re technologically dinosaurs. We ask more of our cars these days. We want them to have a warning light on the dash if our tire pressure is too low. We want them to computer-control our power and emissions. We get smaller engines with higher power output (through compression ratios, variable valve timing, forced induction, etc) to reduce gas mileage (instead of the old way, i.e. “there’s no replacement for displacement”)… Yes, it’s harder to fix. That’s one of the TRADEOFFS for the cars being so much BETTER.

    Comment by Brad Warbiany — August 24, 2009 @ 2:04 pm
  23. Brad,
    I think of being built to last, as the case you want to keep your car longer. The problem with technology is that the auto mechanics don’t seem to keep up with it. It may be that I’m unlucky, but I would swear that several repairs had cost me more repairs. I got rid of a car, because of that. I have just had electrical power steering replaced. After five years the part is not the same as the original and I can tell the difference.

    The auto companies also make you spend more money than you should, because they bundle and encapsulate groups of parts. Simple repair no longer, because part buried in epoxy.(I was told they just couldn’t replace the motor of my power steering, because the processor was embedded) Trouble shooting takes longer eating up labor. This can add up over time, making the repairs the same as a car payment. An incentive to buy a car with a warranty?

    The way I see it, I have had reliable cars until somethings gone wrong.

    Comment by VRB — August 24, 2009 @ 2:38 pm
  24. Brad –

    I’m focusing more on the repairability of car bodies. Hit a car from 20 or 30 years ago at low speed (under 10 MPH), and at worst it was a trip to the body shop to pound out the damage and apply a fresh coat of paint. The same collision on a 2009 vehicle likely means a bunch of shattered or crumpled body panels that have to be replaced rather than repaired, and at much higher cost.

    Not to say that there isn’t a benefit to this. I actually think of it rather like the introduction of polystyrene foam bicycle helmets 20 some-odd years ago. Those helmets are excellent at absorbing force, so much so that they’ve come to dominate the market for bike helmets. But, they become too damaged to wear even by moderate impacts.

    I just can’t consider a car body where 1/10th of the exterior needs to be replaced after a 10 MPH collision “built to last”. It’s built to protect the people inside at the cost of lasting.

    Comment by Quincy — August 24, 2009 @ 3:02 pm
  25. Also, Brad, I’m not surprised you’re having great luck with that Ford Ranger. It’s one of the vehicles they have really gotten right over the years.

    Comment by Quincy — August 24, 2009 @ 3:04 pm
  26. There is something to be said for the technological dinosaurs. I kind of prefer that to having a new vehicle with lots of gadgets that I can’t drive because a sensor failed. Diagnosing some of those problems can be difficult, if not impossible. You can only go by what the computer tells you, ie: left bank lean. OK, now I know what the problem is, but there are numerous things that can cause this condition. On a technological dinosaur, you make sure you have fuel, spark and compression instead of making sure the TPS is talking to the PCM.

    Anyway, none of this changes the fact that c4c was a really dumb government program.

    Comment by John222 — August 25, 2009 @ 8:07 pm
  27. Trivia: In 1987 the California Air Resources Board CARB mandated the use of an On Board Diagnostics connector for all cars sold in California. That dragged all cars into the computer age by law.

    My government at work.

    Comment by Norm — August 25, 2009 @ 9:35 pm

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