Thursday, August 6, 2009

Will "Clunkers" Save The Economy?





Even those who thought it up were surprised by how successful the "Cash for Clunkers" program was. Not me. I knew it would be huge. This wasn't because I thought it would be so easy for people to take advantage of it. In fact, it wasn't. There are rules. For example, the "clunker" has to have at least 80,000 miles on it. Some people probably drove their cars around the block over and over again to try to get the mileage up (I'm still 39,206 miles short). But I'm sure they were in the minority. The reason I was so certain that it would be a success is because it's just so American.

Americans like new things. We're not like people in other countries who boast that they live in a building that's hundreds of years old. Americans brag that they live in the newest house on the block. We look down upon older things. Notice that the program was not named, "Cash for Classics Cars." In music, an "oldie" might have been recorded in the 90's. Ballplayers are traded when they become "old" – like when they're thirty. So I knew that Americans would jump at the chance if a program helped them get something new.

Because of the positive response of the program, it wasn't surprising that the House of Representatives quickly passed a bill to extend it. And politics being politics, it wasn't surprising that the Senate balked at the extension despite the country's enthusiasm for it.

Of course, not everyone in the House was for it. Texas' Jeb Hensarling mocked it, saying, "Maybe we should have a ‘Cash for Cluckers’ program and pay people to eat chicken." Since I like chicken, I wouldn't necessarily be against that idea. On the other hand, I'd oppose "Cash for Brussels sprouts."

I understand what the witty Congressman was saying. In this program, we taxpayers are basically giving money to people to buy cars. For some reason, that doesn't bother me. I'm a lot happier with this deal than with our giving money to the people who helped our economy collapse. Congressman Hensarling opposed those earlier bailouts, too, but I guess he didn't make the national news since he didn't come up with a "clever" slogan as he did this time. I guess he just couldn't think of "Bucks for Brokers."

I like "Cash for Clunkers." It has put new, fuel-efficient cars on the streets, and infused the economy with much-needed money. It hasn't only helped the car industry and related businesses. People who work at car dealerships shop just like everybody else. So that woman who bought a new Chevy last week might be responsible for the guy across the country selling more fancy dog food. When future students study this phenomenon in college, it might be known as the Camaro-Kibble Effect.

Equally importantly, "Cash for Clunkers" has been a positive symbol. It says to America, "Hey, some programs actually work. Maybe we really can get out of this recession." And there's got to be the feeling that if the ailing auto industry can be helped, there's bound to be hope for Joe's Hardware store.

It's a big opportunity for the American auto industry. More than half of the cars purchased under this plan have been American makes. If these shiny new fuel-efficient cars turn out to be great, more people will buy them even without the "Cash for Clunkers" program. Of course, if they turn out to be junk in a year or so, the industry will be hurt even more, and those who bought these cars will feel that all they got was a newer clunker.

But if the economic experts do all their analyses of "Cash for Clunkers" and come up with positive results, watch for copycat programs. The big one will be "Cash for Firetraps." If people want to get rid of their old, falling-apart houses and buy new ones, the government would help them out. The housing industry won't say "no" to that idea.

Yes, "Cash for Clunkers" tapped into the very American love of getting rid of the old and acquiring the new. I just hope that its success won't make people go overboard. If so, I'm really in danger of my wife trading in her clunker of a husband for a new model. And believe me, I've got more than 80,000 miles on my odometer.





1 comment:

  1. Still Waiting for *MY BailoutAugust 10, 2009 at 8:16 PM

    I think I studied that Camaro-Kibble effect thing once upon a time!
    But I the Bucks for Brussels Sprouts giveaway is just too foreign-sounding to work!

    ReplyDelete

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