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July 12, 2009

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2009 Commentary Archive

7/4/09 PC or Socialist?
7/2/09 What you may not know about SEO
6/28/09 A Moment Of Silence...
6/26/09 Carville Validates Conservative Dissention
6/22/09 Guardian of Eatin'
6/19/09 Conservatism at a full Gallup
6/14/09 A Monumental Government Land Grab
6/12/09 Obama's Un-healthy Hypocrisy
6/7/09 DIY Obama
6/5/09 "... My re-set button is broken."
5/31/09 UPS: Urgent Passage Syndrome
5/29/09 Axis Upheaval
5/24/09 Dealing With The Car Czar
5/20/09 Lanny Davis: Spin Doctor Heal Thy Self
5/17/09 Mortar Board Rhymes With...
5/15/09 Dick Cheney: His Aim Is True
5/10/09 Taliban: The Renewable Resource
5/8/09 Tour de Farce
5/3/09 Fix It Again Taxpayers
5/1/09 Swine Flew
4/26/09 The Beautiful Last 100 Days
4/24/09 Oversteering to the Left
4/19/09 Propaganda...By The Book
4/17/09 Yo Ho Ho...
4/12/09 Captains Courageous
4/10/09 What's Wrong With Being A Superpower?
4/5/09 Numbing Your Census
4/2/09 Ugly Americanism
4/1/09 eddobloggo may need a bailout
3/29/09 Liberals HATE To Be Wrong
3/27/09 Republicans: They've Gotta GO!
3/22/09 Pulling Ticks Off RINO's
3/20/09 Selling Books to Deadheads
3/15/09 Detainees of Political Correctness
3/13/09 It's All About The O
3/8/09 The Weak Get Going Too
3/6/09 Put a Rush on it!
3/1/09 Sneak Peek: GM's Latest TV Spot
2/27/09 Our Love's In Jeopardy
2/22/09 Buddy, Can You Spare A Yuan?
2/20/09 Cam-pains In The Neck
2/15/09 Shovel-ready?
2/13/09 The Energy to Stimulate
2/8/09 Car & Driver Review by Tom Daschle
2/6/09 Everybody Funny
2/1/09 Blinded By Transparency
1/25/09

NIMBY Pimby/Namby Pamby

1/23/09 Appointments Beget Appointments
1/16/09 Plane Talk About Homeland Security
1/9/09 The Cadillac of Bailouts
1/2/09 Good News About Heart Attacks

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'Cash for Clunkers' a stimulus for junkers?       >> Bookmark This Page


Cash for Clunkers is wide open for corruption.The so-called Cash for Clunkers program is designed to stimulate new car sales while putting more fuel-efficient vehicles on the road to replace the less-safe gas guzzlers being surrendered. Sounds nice and easy, right? 

 

Well, as Tina Turner would say, the Obama administration "never ever does nothing nice ...and easy."

 

There will be confusion regarding the actual rebate/voucher amount that consumers will receive toward their new vehicle purchases because the calculation is based on the degree of difference between the miles-per-gallon rating of the clunker and its replacement.  While some buyers will rightfully blame the government for its convoluted-ness others will instinctively demonize car dealers for attempting to pocket $1000 of their windfall. 

 

In a climate in which all retail sales need stimulation and in which the domestic automobile industry needs every positive tweak of consumer confidence it can possibly receive, putting auto dealers in charge of the final disbursal of government funds may not be the way to put halos on car salesmen.

 

Furthermore, Cash for Clunkers' official website is not transparent enough to contain any information relating to the quantity of behind-the-scenes paperwork for which dealers will be responsible or of how much bureaucracy will be required to process that paperwork.  The administration is certainly not about to disclose the price of this process -- even if they had an actual clue about its ultimate cost -- or of how potentially corrupt it could become.

 

At this time, so close to the inception date of the program, everything I know about C4C came from a password-protected Nissan dealership website.  Ironically, although my employer sells four of the five surviving government-owned GM brands, our C4C info print-out was donated by a friendly competitor.  Unfortunately, no link to the private Nissan website can be provided.

 

Explained in a nutshell, however, dealers will be held responsible for the timely "scrapping" of all clunkers with the emphasis being placed on insuring, specifically, that every engine block is destroyed so as to never again have the ability to power a vehicle anywhere in the world. 

 

Each deal will be "clean" (no trade) and the dealers will not be allowed to re-sell the clunkers.  For assuming this responsibility, dealers will be entitled to keep $50 of every voucher plus, of course, any profit made from the sale of the new vehicle.

 

Unclear, however, is what will happen to these vehicles once they are placed in the hands of salvage companies.  It appears that any parts, aside from the aforementioned engine blocks, can legally be sold. 

 

At best, therefore, clunkers that were in good, running condition prior to their conversion would be kept on junkyards, adding metal, rubber, dangerous fluids and scenic blight to the landscape.  At worst, unscrupulous individuals might re-sell unscrapped clunkers here or abroad -- heaven forbid with the assistance of car guys and/or bureaucrats.

 

In the end Cash for Clunkers may put thousands of slightly (on average) more fuel-efficient, safer and less polluting vehicles on our highways but could have little impact on the overall health of the American automobile industry. 

 

C4C could be a boon, however, to an industry -- junkyards -- that is already thriving as a result of the recession.  In the process it could breed abuse, if not corruption, and will certainly cost the taxpayers more than any revenue it will generate.


Ed Donath has been involved with automobile sales and marketing on the dealership level since 1987.


Related articles:

http://online.wsj.com/article/SB124545300084032817.html

http://www.businessandmedia.org/articles/2009/20090710140210.aspxhome/archive

 

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Reader Comments...


This smells like everyone loses except the unscrupulous crook somewhere along the chain.

 

GreyCaravel

Montgomery, AL Advertiser

[It's a case in which complete government control could have created jobs and tax revenue while helping to sell some cars and making carguys look good in the process. But they dropped the ball in favor of being formulated and bureaucratic. -ED]


lombago- Ain't nothing "nice and easy" except maybe Franks Song or version of "Take It Nice And Easy". In regard to your short comments, I was thumpking about this just the other day. I was wondering if I could get in on this "free money" and exactly what you needed to do in regard to the trading of a vehicle - just how it works? Have not got to the point of enough interest - yet! I doubt if it is nice and easy or that it will actually do what is intended - or at least not to the extent that is hoped. Maybe a 40% or 45% rate of success depending on how this is measured and who is the measurerie. A good day to all, except Smitty on S. 10th Ave. - I hate that guy - malark

 

mostlymalarkey

Wausau, WI Daily Herald


They can get $ 4,500 for nothing to buy a subsidized Obama Motors car!  Barack the Clown, in over his head. We will pay for his stupidity for decades.

 

Leftwingmedia

St. Cloud, MN Times


All Americans should hope for success as we try to emerge from the debacle of private sector excess. What alternatives have been put forth by the private sector? If you don't have alternative plans we will have to go with what has worked elsewhere. Europe apparently has seen success with programs similar, though much less restrictive. The restrive nature of this program can be considered a concession to conservative whiners with no alternative plan offered.

 

joeeeeee

St. Cloud, MN Times

[This will turn out to be a botched opportunity -- especially if the corruption I predict comes to pass -- simply because the czarist regime asked no one for help in creating this program.

This is a case in which complete government control could have created jobs and tax revenue while helping to sell some cars and making carguys look good in the process. But they dropped the ball in favor of being formulated and bureaucratic. - ED]


It seems to me that logically, if we the little people, had money to buy a new car, WE WOULD HAVE DONE THAT ALREADY! So they give you $4,000 off a $35-40,000 car. Well guess what! Once you get your tax break, you still have a LOT of money to pay for that over priced vehicle and we you loose your job, you will still have all that money to pay. Big frickin deal all right!

 

soapbox55

Salem, OR Statesman-Journa


And like everything else the government touches, they will screw this up too.

 

robertsgunshop

Des Moines, IA Register


Who is going o finance these losers that drive these cars around? There is a reason they drive "clunkers" around.

 

Oil_Field_Trash

St. George, UT Spectrum

[Forgive the carguy lingo but, ironically, the way things are going a credit criminal with a $4500 downstroke may have as good a chance of getting hocked as a stand-up guy who's upside-down in his slick trade. That's Obamanomics for you. -ED]


So they are going to crush the engines. This will increase the cost to one who needs a cheap way to keep their present vehicle running by only replacing the engine.  Not everyone has it in their budget.


johnp

Dover, DE

[Another good point. -ED]


My 13 year old dodge does not qualify....why?...because according to the "cash for clunkers" plan, your mpg when the car was new had to be less than 18mpg. According to the website to find out if your car qualifies, when new my car got 19mpg!! And the website states clearly with (!) symbol,that this mpg was ADJUSTED!!

NOTHING NICE & EASY!!!!

 

sbdmgkmom

Poughkeepsie, NY Journal

[I guess at 18 years of age Proud Mary will keep on burnin'. -ED]


Have you read the entire law? It is quite specific as to what can and can't be done with the clunkers, who will oversee the program, and what the consequences are for violations.  What are you whining about? Seems to me you're clutching at straws to criticize a program that may increase your income considerably with increased car sales.  The CARS.com website states; "Keep in mind that we are still in the process of finalizing the rule for the CARS program." The program may have flaws, but at least wait until it is underway to begin the wingnut rants.

 

Jerbel

Lansing, MI State Journal

[Part of my point is that no one has read the entire law and there isn't a government or private website that is definitive -- least of all as it regards the degree to which the "clunkers" are to be scrapped or how the process of scrapping is to be accomplished. You want to be the jailhouse lawyer, Jerbel? Figure this one out:

What happens if Mr. Jones leaves his '86 Ramcharger with the selling dealer and the truck gets stolen from the dealer's lot before it gets to Sanford's junkyard? You can read cars.com "law" all you want, but if you're trying to protect a business in this Obama economy you'd better know what your liabilities are. -ED]


I am starting to agree with your Obama theory. He made an early push, but since has fallen off the radar of recovery that he promised us all through his campaign. Where and what might he be thinking, 'Obama has me wondering. It's here, but where? good post eddo.

 

JonathonHansen

Green Bay, WI PressGazette


It actually sounds like the car dealer is expected to pick-up any overages above the $50 and who is going to keep track of all the VIN's, sellers and finally the end owner of the car in order to prove it was actually 'junked.'  I realize that honest and truthful information is obviously limited and having worked for a government agency, there is a reason for it.
 
boned

Montana


Will ACORN be tracking persons who keep their old cars?
 

hookster

Cincinnati, OH

[Either that or they'll be tracking the clunkers -- or both. -ED]


They'll get my old clunkers when they pry my cold dead hands from them.

 

rainbowed

Montana


 


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