Here in our cars … we feel safest of all … we can lock all our doors … it’s the only way to live … in cars … (doom-de-doom, da-doom-de-doom) …
Yeah that was pretty gay … sorry about that. Things have just been so heavy around here lately we felt the need to lighten it up a bit …
Anyway, remember “Cash for Clunkers?” That extra “little” bailout of the auto industry that taxpayers poured $3 billion into over the course of the summer? The program President Barack Obama said was “successful beyond anybody’s imagination?”
Well it was “successful,” at least for a fleeting moment in time that we paid through the nose in order to temporarily achieve.
Of course it turns out that “Clunkers” is not unlike most government attempts to dictate consumer behavior – something of a cannibal, if you will. You see, as much as car companies are loving life right now, “Clunkers” has basically killed their sales for the foreseeable future.
For example, during the great taxpayer-funded giveaway cars were being purchased at an annualized rate of 14 million, according to Business Week magazine. Since “Clunkers” ended on August 25, the annualized rate has been cut almost in half to 8 million.
Sure it will level out a bit moving forward, but some estimates are that as many as a third of all “Clunker” sales were cannibalized from future months. In other words, tens of thousands of people who would have otherwise bought cars in September, October, November and beyond went ahead and bought them now – which means that car companies will be paying for their short-term gains (bad pun alert) down the road.
It’s like those ridiculous sales tax holidays, in a way.
Honestly, what was the point? Particularly after we pumped $65 billion into Goverment Motors and that company the Italians turned around and bought.