‘Cash for Clunkers’ rhetoric frames the issue, pro and con

The so-called “cash for clunkers” program has been a great success, or a terrible waste of taxpayer money, depending on your point of view.

Hundreds of thousands of new car sales in the past two weeks came with an old clunky trade-in to qualify for the Federal program designed to jump-start auto sales while removing inefficient and and relatively dirty cars off American highways.

 

Rare is the opportunity for a government-funded “three-for.” The program, to varying degrees, helps 1) an important sector of the economy including automakers, suppliers and dealers, 2) provide the fastest improvement in air quality by permanently retiring some of the oldest, dirtiest vehicles that even when new produced far more emissions than today’s vehicles, and in many cases have deteriorated into smog-belching offenders as they have aged; 3) help address energy national security as well as global warming concerns (does that make it a “four-for?”) by replacing relatively fuel-inefficient older vehicles with much more efficient 2009 and 2010 models.

If the Senate, as expected, approves another $2 billion in funding, the program will live on for several more weeks and triple the benefits originally envisioned in the $1 billion clunker bill.

So what’s not to like about the program? Environmentalists would have liked to have seen stricter requirements to reward purchases only of the most fuel efficient cars. Fiscal conservatives abhor the government interfering with the market and call it an expensive hand-out for the benefit of a single sector.

Both sides have been effective in framing the debate as they see it.

George Pipas, Ford’s chief sales analyst, was particularly on target with his soundbites. (Disclosure, George worked for me toward the end of my tenure with Ford, and he remains a friend.)

“I would challenge anyone to show me a one-week program that has had as much benefit to the consumer, as much benefit to the economy, and as much benefit to the environment as this prgram,’ Pipas told the USA Today. In numerous interviews on the subject, Pipas stressed that the most popular cars being purchased under the program were Ford’s most fuel-efficient cars, the Focus and Fusion, and its most efficient SUV, the Escape.

“Why not $4,500 for refrigerators or other businesses around my state?” countered Sen. Claire McCaskill (D-MO). Added Sen. Jim DeMint (R-SC): “The federal government should not be running the used car business. This is a horrible policy idea.”

As an observant reader, you can tell from the rhetoric I’ve chosen to frame the issue on this post, and the relative weight I’ve given the two sides, that I am firmly in the pro-cash-for-clunkers camp. Seems like a much better use of money than we usally get for our tax dollars.

- Jon Harmon

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