"Cash for Clunkers" working like a charm

One could argue that providing incentives to spur Americans into buying automobiles, even fuel efficient automobiles, is short-sighted and only delays the day when we are forced to transition our economy away from fossil-fuel energy. Certainly, there are some who make that argument and my tendency is to agree.

Nonetheless, for immediate relief from the agony of unemployment, the fall of housing prices, the general economic despair that has gripped the nation ever since the financial house-of-cards came crashing down last September, the Car Allowance Rebate System (id est "Cash for Clunkers") program seems to be doing a pretty damn good job.

The program is part of the stimulus package that passed Congress earlier this year. Participants can trade in their old vehicles and get up to $4500 in tax rebates with the purchase of newer, more fuel efficient vehicles. The primary requirement is that the old vehicle get 18 miles per gallon or less, and the new vehicle must get something better than that. You can find out the specifics and determine if your vehicles (the trade-in and the replacement) qualify at this handy-dandy government-run web site.

Originally, Congress had allocated $1 billion to this program, but demand has been so robust that the $1 billion is nearly gone already, a mere month after the program started. The response has been so big that Ford Motor Company reported an increase in sales of 1.5% for the month of July. This is the first increase in monthly sales that Ford has experienced in 2 years. Other auto manufacturers are reporting increased sales as well.

So, it seems that the stimulus package (or this small portion of it, anyway) may, in fact be working. Auto sales go up; auto workers keep their jobs; peripheral employment halts its slide; and to top it all off, overall consumption of petroleum in the United States goes down as a result. Lower CO₂ emissions! Less smog! Less demand for gasoline!

The US Senate is now preparing to extend the program to the tune of another $2 billion. Reinforcing success. That's good government, to my way of thinking.

But, of course, Republicans, and most specifically Senator Jim DeMint (R-SC), are whining that the program is unnecessary government intervention in the free marketplace. Can you believe it? Oh my God!

As unfathomable as it seems to me, perhaps there are those who believe that the Republicans are sincere in their objections. Such persons could argue that Senator DeMint and those like him are making an ideological point. Senator DeMint and other Republicans, they might say, are truly and sincerely against government interference. Laissez-faire capitalism! Let the Market rule! But that argument falls dead when one considers how greedily Republican governors buried their snouts in the federal trough when stimulus funds were being advocated.

I think the real objection that opponents of the "Cash for Clunkers" program have is that it just might work! Republicans know that their only path back to power for the foreseeable future is a weak economy and the perception that President Obama is ineffectual. A government program that is visibly effective at combating the recession is their worst nightmare. All their shrieking about socialism would be exposed as the demagoguery that it is. The feeble germination of their hopes for picking up congressional seats in 2010 hinges on extending people's misery.

"Aw, shucks. Guess I'll just have to try to kill health care reform instead."

The latest news is that Senator Harry Reid (D-NV) predicts that the program will be extended before the August recess. Jim DeMint even grumpily said he would not block a vote. Sucks to be him.