A Cash for Clunkers update

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Back in 2009, the Cash for Clunkers program was envisioned as a $3 billion tax-payer funded boost to the economy by offering a $4,500 rebate on used cars to be applied towards a new one. The thought was that this stimulus program would aid a flagging auto industry, bump economic activity and get older less-fuel efficient cars off the street and thus, out of the environment.

Turns out none of this happened as hoped for. As we’ve chronicled in previous posts, Cash for Clunkers has resulted in Clunker’s remorse for people who jumped on the $4,500 rebate and found themselves in a 5-year new car lease that, as it turns out, they could not afford (and the housing/financial crisis was all Wall St.’s fault?) and for a car that a year later they no longer wanted.

Cash for Clunkers also shafted lower/working class families out of perfectly serviceable used cars that they could have employed to get to and from work, school, the market, the doctor, etc. By taking 690,000 used cars out of circulation, it bumped up the price of used cars further putting those cars out of the reach of affordability for those who needed it the most. With transportation mobility comes upward economic mobility and Cash for Clunkers did its part in snuffing out that dream for many lower-income American families.

Cash for Clunkers also shafted charities out of used cars that would’ve been otherwise turned over to them for refurbishment and then turned back over to that charity’s targeted need.

And, as studies have shown, Cash for Clunkers was merely “sugar” as it did temporarily spike auto sales but all it was doing was stealing demand from later on down the road. Overall, net car sales remained flat.



Now, as it turns out, Cash for Clunkers, on top of everything else was/is, horrible for the environment as well.

According to E Magazine, the “Clunkers” program, which is officially known as the Car Allowance Rebates System (CARS), produced tons of unnecessary waste while doing little to curb greenhouse gas emissions.

The program's first mistake seems to have been its focus on car shredding, instead of car recycling. With 690,000 vehicles traded in, that's a pretty big mistake.
According to the Automotive Recyclers Association (ARA), automobiles are almost completely recyclable, down to their engine oil and brake fluid. But many of the “Cash for Clunkers” cars were never sent to recycling facilities. The agency reports that the cars’ engines were instead destroyed by federal mandate, in order to prevent dealers from illicitly reselling the vehicles later.

The remaining parts of each car could then be put up for auction, but program guidelines also required that after 180 days, no matter how much of the car was left, the parts woud be sent to a junkyard and shredded.

Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.

E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivaled newer cars.

And though the point was to get less fuel efficient cars off the roads, with only 690,000 traded in, and over 250 million registered in the U.S., the difference in pollutant levels seems pretty negligible.

But all that vehicular destruction did more than create unnecessary waste for the environment. It also had some far-reaching economic effects.

Fully 60% of a car’s recyclable value is in its engine and drivetrain but by federal mandate, the car’s engine was to be filled with a sodium silicate solution and left to rust away in perpetuity in a landfill near you.

Because it was a brief program and because it had a limited scope, Cash for Clunkers, of all the Keynesian gimmickry employed by the federal government, provides perhaps the clearest and best example of the negative consequences that result from the government injecting itself into the marketplace.

Cash for Clunkers: no net positive effect on auto sales, a bain to this country’s charities, sticking it to lower-income families and, now, horrible for the environment. What’s not to love about all that?


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Remorse

$3 billion in tax-payer money to simply dislocate demand to the left, raise prices in the used car market and screw over charities that depend on the tax write-off incentives for those donating used cars...

Now, who wouldn't be down for all that Cash for Clunkers would provide?

Well, you, apparently.

Thousands of people who leased cars last year as part of the Cash for Clunkers program are having second thoughts and are trying to get out of their leases, reports LeaseTrader.com.

The program provided up to a $4,500 rebate if a person signed at least a five-year lease for their car.

A year later, that money has long been spent and people realize they are stuck with the car for four more years, says John Sternal, LeaseTrader.com spokesman.

"I think it's Cash for Clunkers remorse," Sternal says, whose company helps hook up people who want to trade out of their leases with those looking for a lease.

Some drivers want out of the lease for financial reasons but for others it's just not wanting the car.

Sternal notes that a five-year car lease is a really bad deal for most people who usually lease a car because they want to drive the latest model.

He says it will be very difficult for Cash for Clunkers lessees to trade a lease with four or more years left on it because most traders want a shorter lease, he says.

The only other choice is to break the lease, but then the lessee must immediately pay the remaining payments, which often amounts to more than $10,000.

He says the issue in status-conscious Southern Californians is not so much about the money, but the car.

"They woke up last year and saw the Cash for Clunkers program and thought they they could help the environment and the bunnies and the trees and got smaller, environmentally-friendly cars," Sternal says. "Now they look at that car and think about the really nice car they used to have and think 'I want something roomier, more luxurious. This contract is bad and I'm not in love.'"

Priceless... Unfortunately, however, as the first paragraph above stated it is not.

This is so very reminiscent of the home-buyer credit and the HAMP programs concocted by Team O that enticed potential buyers and mortgage-holders into deals they could not possibly sustain given the economy.

Instead of staying out of the market for a while and/or accepting foreclosure terms, then renting in order to build up capital to get back into the housing market when personal fiances were in better shape, the feds dangled cheap money and the implicit promise of pain-free home-ownership to millions of Americans.

And, similarly, instead of staying in their perfectly good-operating "clunker", the American public was lured into unsustainable lease deals by the feds who dangled the double-whammy of cheap money and doing something good for the environment.

Frivolous spending of tax payer money for hopelessly distorted housing and auto markets with landfills full of used cars to show for it: is there anything else you would like accomplished with social engineering-minded Keynesian gimmickry?

What this also should represent is a toxic combination of people unwilling to make rational decisions in difficult economic times and a government all too willing to subsidize those poor decisions. Got moral hazard?

Exit question: a bailout for Cash for Clunker remorsers?


H/T: Hot Air

Yet another smashing idea

We’d like to file this one under the Dept. of Inevitability also, but the waiting line is just too long.

Whenever the government starts injecting itself too much into the marketplace, unintended consequences will result and much more often than not, it won't be good for you… or the environment.

Take Cash for Clunkers (please), for instance. Not only are dealerships being swamped by customers taking advantage of this government give-away, so too are landfills being swamped with perfectly good automobiles (the alleged clunkers) that are being destroyed.

Not all auto recyclers are relishing the government’s new cash for clunkers program, which requires car dealers to destroy the gas-guzzlers they get as trade-ins from new car buyers.

Used engines and drivetrains are a big part of recyclers’ income from each scrapped car, and under the federal program those engines must be destroyed. The idea is to promote fuel efficiency and help automakers, but it comes at a time when more than a dozen U.S. auto parts suppliers have filed for bankruptcy this year.

“Why throw away good parts when the supply chain is in jeopardy? It doesn’t make a whole lot of sense,” said Michael Wilson, executive vice president of the Automotive Recyclers Association based in Manassas, Va.

Why, indeed? Engines and drivetrains account for 60 percent of a recycler’s revenue from a used car. Engines that will be filled with a sodium silicate solution and ran with that in it will be useless, as will many parts on that engine, in the secondary auto parts market.

And another unintended consequence is that Cash for Clunkers, in its righteous zeal to get all those gas guzzlers off the road, has shrunk the supply of perfectly serviceable used cars and thus raised the price of these same vehicles. Certainly good news for working families, wouldn’t you say?

Check out video below which does a nice job of summing up the non-sense of Cash for Clunkers.

They get it... they really get it.

The Associated Press and Reuters are probably two of the guiltiest parties in seemingly being shocked, shocked by continual bad economic news by their continual use of "unexpectedly" when reporting out on higher unemployment, lower GDP figures and rising home foreclosure rates.

It begs one to ask: "Have not these guys been paying attention?" and "Just what is it about porkaholic Keynesian gimmickry that would lead them to believe it is going to turn the economy around?"

So we must give credit where credit is due to the multi-colored fishwrap USA TODAY for their headline:

As expected, August auto sales crater

Comparison with last year skewed by cash for clunkers

We were so overcome with emotion upon seeing that headline and sub-headline we almost broke down in tears. Tears of joy, friends, tears of joy.

Car and truck sales dropped sharply in August from a year ago, the result of a massive hangover from last August's cash-for-clunkers federal rebate fiesta that made it the best car sales month of 2009.

Industrywide sales were down 21% from last August, to 997,468, the worst August total since 1983, according to Ward's AutoInfoBank. The month's seasonally adjusted annualized sales rate of 11.47 million, however, put it about on par with the sales rate through most of this year.

Toyota was one of the biggest losers, with sales cratering 34%. It had been one of the biggest beneficiaries of last year's stimulus program, with many consumers opting to use their $4,500 rebate on Toyota and Lexus vehicles. Sales of Corolla, one of its top cash-for-clunkers cars, fell by more than half.

Federal rebate fiesta? Somebody at USA TODAY is having too good of a time.

Sales will continue to putter along at an anemic pace for the foreseeable future, several auto executives said on conference calls to discuss August sales. There is little on the horizon to persuade customers to come back to showrooms, they say.

Emily Kolinski Morris, Ford senior U.S. economist, noted there's little to support optimism in economic data on consumer confidence, jobless claims and other indicators: The data show "lower momentum for auto sales the next three to six months."

Recession-battered consumers are saving more, she said, which will hurt sales in the near future.

Don Esmond, Toyota's senior vice president for sales, said the company is continuing its relatively generous incentives program through September to keep customers in showrooms. But Toyota senses customers are more interested these days in saving than buying a new car, he said.

"It's understandable why consumers keep putting off major purchases," he said.

But he doesn't think the government should bring back another major car-buying stimulus program. "I think the best thing for the industry is consistent growth brought from real demand, not stimulus brought into the marketplace," he said.

Unlike the broader main stream media, it would appear that auto execs and the writers at USA TODAY expected Cash for Clunkers to distort the market just as it has.

And perhaps when the rest of the media takes off its "O"-colored glasses, they'll realize that there is nothing unexpected happening to the economy whatsoever.

Cash for Clunkers: revisited

Say you're out of work, your spouse is out of work or you're under-employed but in dire need of some vehicular transportation. Obviously, in this economy and being in the financial circumstance that you are, you are leaning heavily towards the used car market.

But before we get to cruising down to the used car lot, let's go back to a previous post where we whined that Cash for Clunkers was $3 billion poured down the drain "for absolutely nothing".

Ah, how wrong we were.

Car buyers on average paid $1,800 more for a used vehicle in July than they paid a year ago at this time, according to Edmunds.com data. That's a 10.3 percent increase, bringing the average cost of a 3-year-old vehicle to $19,248. The price of a Cadillac Escalade spiked nearly 36 percent. "A lack of confidence in the economy is driving more people to used cars, putting upward pricing pressure on a limited supply of vehicles," said Joe Spina, a senior analyst for Edmunds.

There's a tricky aspect to this analysis, because last summer was marked by a used-car buying frenzy spawned by the Cash for Clunkers program. Spina said the effects of that program are hard to isolate precisely. "So many economic factors affect automobile sales and prices. It's believed that the program delayed purchases prior to the program and also pulled sales forward while in place," he said. "The program also eliminated inventory of older vehicles that were traded and then scrapped."

Of course, you shouldn't be buying an Escalade anyway so the social engineering benefits of CfC are obvious.

So we were off on our assessment of Cash for Clunkers. Way off. That $3 billion of tax-payer scratch accomplished quite a bit, most importantly, by distorting the market by artificially reducing the supply of used cars and as a result, hosing over working families that would be in the market for used cars.

H/T: Instaglen

Cash for Clunkers: the gift that keeps on giving

At the height of the Keynesian gimmick known as Cash for Clunkers, we noted that charities weren't too hot on the idea as the program succeeded in taking older, lower gas mileage, but certainly serviceable cars off the market. The very types of cars favored by lower-income folks to get back and forth to work.

It appears now that we are discovering one of the legacies of Cash for Clunkers.

For more than a century, efforts to help the disadvantaged have focused on education, healthcare, nutrition and housing. Almost nothing has been done to help the working poor afford cars, despite research that indicates it would help alleviate poverty.

About 1 in 4 needy U.S. families do not have a car, according to the Annie E. Casey Foundation. That's a serious handicap for the millions of Americans who don't have access to robust mass transit.

A nationwide survey of 353 people who bought cars with help from a nonprofit group called Ways to Work found that 72% reported an increase in income. Of those who were on public assistance when they acquired a car, 87% were no longer receiving it a few years later.

Other studies have found that low-income people were more involved in community activities and had better access to healthcare after getting cars, while their children participated more frequently in after-school programs.

"You're more likely to have a job and less likely to be fired," said Evelyn Blumenberg, a professor of urban planning at UCLA who studies transportation and poverty. "It's just a no-brainer that low-income families need cars."

Yet there are almost no state or federal programs to meet the need.

(italics, ours)

Let that last sentence sink in. Cash for Clunkers destroyed 700,000 cars. You don't think that a good chunk of that 700,000 cars, were they still around, could be meeting the needs of the poor and low income families in this country?

There was a federal program, alright. But it was a federal program that absolutely shafted people who need wheels to get to work, to go shopping, to take their children to the doctor, etc.

"Those cars could have been used for very needy working-class families," said Carolyn Hayden, a Glendarden, Md., transportation consultant. "It will go down in the annals as a missed opportunity."

More like a fantastically horrible idea. Think about it: $3 billion to essentially keep people unemployed. What's not to like about that?

The Keynesian gimmickry employed by the Obama administration to get us out of the recession were intended to be quick-hitters to boost the economy. What were finding, however, is that as short-lived as these programs were they have a legacy and a human cost that will be felt for years.

The next Cash for Clunkers casualty?

The most recent estimates indicate that GM plans to make 200-400 Chevy Volts in 2010 and then about around 10,000 in 2011. These numbers are down significantly from predictions a few years ago of 60,000 Volts in the first year. CNET, though, thinks that the actual number of plug-in hybrids, like the Volt, that will use LG Chem's lithium-ion packs that GM can make a year is actually 70,000. CNET is also willing to put a price on the Voltec system's pack: $8,000.

Hey, that’s great but who’s going to buy this car? We’re reasonably confident it won’t be the people who cashed-in on the Cash for Clunkers program this past month.

And this represents why the Cash for Clunkers program, though in existence for just a matter of weeks, will have aftereffects that will be felt for years. By effectively shifting the demand curve to the left, C4C displaced a whole group of buyers for these allegedly green cars.

The instant gratification promised and delivered by C4C has distorted and damaged the marketplace for the Volt. Your tax dollars that propped up a stimulus program that destroyed hundreds of thousands of perfectly serviceable cars will now be used to manufacture and market a car for which there will be a drastically reduced market demand.

Face it. You love that new car smell.

Before we get into yet another reason why the Cash for Clunkers program is counter-productive, we heard a commercial on the way home from work just now from Father Joe urging people to forego the government program and give him their clunker in exchange for the tax write-off. Get a tax break, give to charity and don’t take on a new car payment that you may not be able to afford even with the rebate. Sounds reasonable to us. The mere fact, though, that this San Diego-based charity felt compelled to pay drive-time bucks on a national talk radio show is circumstantial evidence that Cash for Clunkers is adversely affecting the charity sector, as well.

And right on cue, as we were searching for Father Joe’s Auto Donation site.

Cash for Clunkers launched right before his peak donation season, Father Joe said. He wishes Congress and the White House had considered charities when devising the program.

"To me, the idea would have been donate your car to a charity, get a $4,000 write-off, then go spend it," Father Joe said.

Father Joe obviously has his priorities skewed. To hell with the poor, it is Gaia that must be served.

But how is Gaia being served when:

The article noted that "Newer cars are driven more than older cars. On average people drive their new cars and trucks about 25 percent more than they do their 10-year-old vehicles." So, even if the new car's fuel economy is much better than the older car's fuel economy, that will not matter much if the owner of the new car drives that car much more and according to this article, he or she likely will be driving the new vehicle a lot more than the older one.

Aside from the gathering of empirical evidence, the notion of driving your new car more often and for longer than your clunker stands up to intuition and natural human behavior… especially for men out there whom we feel confident we can speak on behalf.

Part of the reason you bought that new car was, well…. it was to drive it. Outside of city traffic and freeway gridlock, driving is fun. And this CfC program could not have come along at a better time than summer as it flows into fall with its great driving weather throughout most of the country to re-enforce this point. Your self-fulfillment through odometer rollovers: 1. Environment: 0

That road trip up the coast or out to the Grand Canyon that you were putting off because you did not have full faith and confidence in your clunker is back on again. Your wanderlust: 1. Environment: 0

And lord knows, chicks dig new cars so the thought of your game being stepped up by ownership of a new car will not be accompanied by the notion that your hot new ride will be grounded in the driveway very much. It’s all about exposure. Your libido: 1. Environment: 0.

As you can see, a program that gives the shaft to the poor with the added benefit of raping the environment is normally the exclusive domain of the Republicans so it’s comforting to know that bipartisanship is alive and well on Capitol Hill.

From the Dept. of Inevitability..

…under the direct supervision of the Czar of “We told you so” but also indirectly supported by the Bureau of “Go figure” with some funding assistance via “Hit upside the head with a 2x4”, comes this news:

After the shopping binge inspired by the government's "Cash for Clunkers" incentive program ended, U.S. auto sales plunged in September and the industry sunk back to the depths from which it started, figures released Thursday showed.

The reports of monthly sales numbers confirmed predictions that some of the spectacular gains of August had merely been achieved by moving up sales that would have happened in September.

The results raised doubts from some economists about the effectiveness of the $3 billion federal program as a stimulus.

General Motors' sales fell 45 percent compared with a year ago, and Chrysler's dropped 42 percent. Sales at Ford did comparatively better, declining just 5 percent. Compared with August, however, Ford's sales in September plummeted 37 percent, slightly more than the other two.

And further proof that an Ivy League affiliation should not be confused with any actual intelligence:

Alan Blinder, a Princeton professor who was among the first to push an auto sales incentive program in the United States, doubted it provided much stimulus, in large part because it was in effect for only a month.

"Most of the idea of any stimulus is to pull spending up from the future, but it doesn't make any sense to design a program that only pulls up spending by one month," said Blinder, a member of the Council of Economic Advisers during the Clinton administration. "Why in the world would you make it a one-month program? The Germans didn't do that. The British do that. When I designed a mock version of this I was thinking of it as a one-year or two-year program."

Big Al, why stop at just one or two years in that case? Seriously, why not just make Cash for Clunkers a permanent program so we can turn in our “clunker” every 6 months or so, have that destroyed and purchase another new car with $4500 help from the government? Auto workers stay employed, perfectly fine automobiles get destroyed, you run up more personal debt and the government continues to pile up more public debt… everybody wins!

We're having trouble coming up with a government program that from top to bottom was as ill-conceived, poorly executed and as counter-productive as Cash for Clunkers. We welcome opinions to the contrary

Forget about "the war on women"....

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... who's paying any attention to the war on the poor?


Alternate headline: Doubling down on stupid


We have previously made note of what a disaster the administration's Cash for Clunkers was as $3 billion dollars to goose demand for new cars took perfectly fine-operating used cars off the market which had the obviously predictable results of raising the price of existing used cars which made them less accessible to lower income folks and charities who would be in the market for the same.

In case anyone wondered, cars are important:

For more than a century, efforts to help the disadvantaged have focused on education, healthcare, nutrition and housing. Almost nothing has been done to help the working poor afford cars, despite research that indicates it would help alleviate poverty.

About 1 in 4 needy U.S. families do not have a car, according to the Annie E. Casey Foundation. That's a serious handicap for the millions of Americans who don't have access to robust mass transit.

A nationwide survey of 353 people who bought cars with help from a nonprofit group called Ways to Work found that 72% reported an increase in income. Of those who were on public assistance when they acquired a car, 87% were no longer receiving it a few years later.

Other studies have found that low-income people were more involved in community activities and had better access to healthcare after getting cars, while their children participated more frequently in after-school programs.

"You're more likely to have a job and less likely to be fired," said Evelyn Blumenberg, a professor of urban planning at UCLA who studies transportation and poverty. "It's just a no-brainer that low-income families need cars."

Yet there are almost no state or federal programs to meet the need.

(italics, ours)

Let that sink in for a moment. It's not necessarily that there is no federal program in place to meet the car needs of the poor, there was certainly a program that resulted in worsening this scenario in Cash for Clunkers.


And the situation is not going to be getting any better.

he Corporate Average Fuel Economy (CAFE) regulations that President Obama announced last summer will make it impossible for 7 million lower income consumers to buy a new car according to a National Automobile Dealers Association (NADA) study released today.

“While you can mandate what automakers must build, (ed. note: a dubious assumption, at best) you can’t dictate what customers will buy, nor can you dictate if a bank will make a loan,” New Mexico Ford dealer Don Chalmers said today.

Obama's proposed CAFE standards, which will begin taking effect in 2017, raise minimum average vehicle fleet fuel efficiency to 54.5 mpg by 2025. The Environmental Protection Agency and National Highway Traffic Safety Administration estimate that this regulation will raise the average price of passenger cars and light trucks by $3,000.

“The unintended consequences of the proposed fuel economy increases are clear,” NADA Used Car Guide analyst David Wagner said. “If the price of a vehicle goes up by the government estimate of almost $3,000, millions of people will no longer be able to finance a new vehicle.”

This isn't rocket science, gang. If you are going to start mandating increases in technology outside of market demand, that is necessarily going to have an effect on the price of that technology.

The very class of people statist claim to champion are getting screwed by statist policies. Again, even that, as we have seen over the years isn't rocket science.

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Cash for Clunkers FAIL

Because of the complexities of large economies, it's difficult to determine the effects of stimulus efforts by the government on those economies. Cash for Clunkers, however, was short enough in duration and concentrated on one particular area of the economy so that its effect could more accurately be gaged.

Below is the US Census data for auto dealer sales.

(please click to enlarge)



The dotted line represents the averages for the sales during the month of CfC and the month after.

As we predicted, all CfC did was spike the demand to the left with no overall net effect on auto sales as the areas under the two spikes above and below the dotted line (during and immediately after CfC) reveal.

$3 billion for absolutely nothing. Yet another refutation of demand-side Keynesian gimmickry upon which our recovery efforts have been modeled.

H/T: Coyote Blog

Exposed: the horribleness of Cash for Clunkers

(Warning: graphic and disturbing imagery contained, herein)

We’re not sure there are enough ways to describe just how excrable the C4C program is but we hope these two short videos give you a visceral sense of the awfulness of C4C.

The first is a visual how-to on killing a perfectly good automobile. We checked out some other videos on YouTube and the disgust displayed by the people (auto dealer mechanics) who are forced to do this because of this program was palpable.



The clip below talks about how the C4C program is hurting charities and the used car market. And the best part? The clip was made while the program was burning through its first billion dollars…. before Congress signed up the program for another $2 billion more.



So, let’s see: Distort the new car market by displacing potential buyers over the next several years? Check. Environmental dubiousness because of the considerable carbon footprint to make a new car and the fact that new cars get driven more often and for longer than older ones? Check. Hurting charities? Check. Damaging the used car and used engine part markets by killing perfectly serviceable automobiles? Check. Spending $3 billion we don't have? Check.

Enticing Americans to take on more debt load? Check. Creating a bureaucratic nightmare where dealers have only been re-imbursed for approx. 7% (as of last Thursday)of rebate applications? Check. Creating a bureaucratic nightmare to where the Treasury Department is having to siphon off employees from the FAA to handle these rebate applications from the dealers? Check.

Honest to pete – what’s not to love about Cash for Clunkers?

News item of the day

News ledes that make you wonder upon which planet the New York Times and/or the Obama administration are currently residing.

As the economy worsens, President Obama and his senior aides are considering whether to adopt a more combative approach on economic issues, seeking to highlight substantive differences with Republicans in Congress and on the campaign trail rather than continuing to pursue elusive compromises, advisers to the president say.

Elusive compromises like Porkulus, Cash for Clunkers, Cash for Caulkers, car company takeovers and ObamaCare all which enjoyed zero bi-partisan support and which did nothing for, and can be argued, did further harm to the economy. Those elusive compormises?

Mr. Obama plans to spend time this weekend considering his options, advisers said. The White House expects to unveil new job-creation proposals in early September

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Can't wait to see how the same old Keynesian gimmickry is going to be re-packaged and re-spun in just a few weeks.

So far, most signs point to a continuation of the nonconfrontational approach — better to do something than nothing — that has defined this administration. Mr. Obama and his aides are skeptical that voters will reward bold proposals if those ideas do not pass Congress. It is their judgment that moderate voters want tangible results rather than speeches.

“If you’re talking about a stunt, I don’t think a stunt is what the American people are looking for,” the White House press secretary, Jay Carney, told reporters on Wednesday. “They’re looking for leadership, and they’re looking for a focus on economic growth and job creation.”

Actually, give "nothing" a try. Seriously. Give it a whack because nothing they have tried so far has done any good. And stunts? Mr. Carney, kind sir, stunts and demand-side gimmicks are all this administration has offered up.


And as for our wondering about re-packaging failed Keynesian policies, it doesn't look like Team O is going to even worry about any slick re-branding because it's mainstream economic theory, dontcha know?

A wide range of economists say the administration should call for a new round of stimulus spending, as prescribed by mainstream economic theory, to create jobs and promote growth. It is clear that the House would never pass such a plan.

The campaign meme of the Obama adminstration which will be dutifully parroted by their water-carriers in the media has been set and you won't be surprised to know the crappy state of the economy has nothing to do with them but rather the fellow that preceded Obama and those damn pesky Republicans that keep getting in the way of allowing the administration from further ruining the economy.

The sadly obligatory cash for clunkers update

Well, the one thing that can be said for CfC is that it is coming along precisely how you would expect a program to come along where the government inserts itself between the seller and the buyer. These sort of things are nothing if not predictable.

The plan's popularity, plus confusion among dealers over its rules, has contributed to administrative gridlock. The Department of Transportation, which runs the program through its National Highway Traffic Safety Administration, indicated to auto dealers Thursday that it would add staff to address the backlog of unpaid applications for clunker vouchers.

Dealers say the government is putting them in financial peril. The law requires dealers to deliver a new vehicle to qualifying customers, even if the government payment hasn't yet arrived. The government says it will reimburse dealers within 10 days of the applications' approval.

But dealers say payments have been slow to arrive. "We've got 155 clunkers on the ground and no money in the bank," says Earl Stewart, owner of the Earl Stewart Toyota dealership in North Palm Beach, Fla. "We're selling ourselves into a very negative cash-flow situation."

And when the federal government has only reimbursed auto dealers for 2 percent of the claims they’ve submitted, one can see why they are a bit skittish right now and kinda makes you wonder where the first $1 billion dollars went now that we have anted-up for $2 billion more.

According to the Transportation Department there are 225 people reviewing claims and to date their have been 338,659 vehicles sold under CfC for a case load of 1,500 per reviewer so, yeah, this thing might require some staffing up.

So, beyond the absolute lunacy of the CfC effectively being its own “death panel” for perfectly functioning automotive assets, the administrative goat rope that CfC has become is everything you could imagine it to be.

Reasons for optimism

We continue to brace for a double-dip recession we hope never comes. We just can't help but think that the horribly misguided, demand-side Keynesian gimmickry like Cash for Clunkers and the various home-owners' assistance programs have served only to kick the can down the road, delaying any true recovery while doing nothing to chase the poisons out of the system.

While that may very well be our short-to-mid-term prognosis, what about the long term? Rule #1: Don't bet against this country.

•The party of the ravening parasites is going to get obliterated in November. The Democrats' only chance lay in the possibility of a global recovery. Europe is crushing those hopes on a daily basis. President Obama has been the perfect leader for these times. An unabashed econofascist with huge majorities, he's followed the course prescribed for decades by liberals and the result has been ... monster deficits and anemic growth.

Oh, do read more at the link because contrary to the pull-a-graph, KT's brimming with confidence and is quite optimistic about the economic outlook of our country.

You gotta believe there is just too much creativity, ingenuity and drive in this country to not come back from this great recession regardless of who is in office. And since, as a representative republic, we usually get what we want, here's hoping that whoever takes office in November would see fit to neither bludgeon about with even more useless multi-billion dollar "jobs bills" nor tinker at the levers of "Cash for (Whatever)" side shows but rather just get the hell out of the way!

It's as if we've run out of good ideas...

.

... but make laws we must anyway



Time was in this country when Congress passed legislation and which the President signed into law that gave certain people the right to vote which they had been previously denied or created our national park system to be enjoyed by all future generations of Americans or even declarations that sent our armed forces to war to rid the planet of the scourge of fascism and imperialism. Now days, we pass laws to saddle all future generations of Americans with mountains of debt and to ensure the IRS is all up in our britches more than at any time in our country's history.

"It is unprecedented in recent history, the amount of responsibility the IRS is being given in an area that most people don't think of as an IRS function,"

So saith J. Russell George, the Treasury Inspector General for Tax Administration, in his testimony before the House Appropriations Committee on Wednesday regarding the IRS's responsibility for ObamaCare compliance.

George added that Americans , will have more questions about their taxes because of health care penalties or credits, flooding already busy call-in and walk-in tax help centers. "This is going to lead to problems, sir."

Truly... the IRS as the enforcement arm of the new health care law. What could possibly go wrong?

And these resource issues are bound to spill over into tax fraud enforcement, where the IRS will have to do a cost-benefit analysis when determining which tax fraudsters to chase.

"They have to determine what enforcement mechanisms they'll employ . how they go about determining who to audit and who not to," George said.

It would appear that the 16,000 additional IRS agents that were/are to be hired wasn't necessarily the stuff of righty blog fever swamps.

The non-partisan GAO (Government Accounting Office) says there are 47 new taxes and regulations to administer in overseeing of ObamaCare. Go the link for the full list but here are just a few of our faves:

3.Imposes a penalty on health plans identified in an annual Department of Health and Human Services (HHS) penalty fee report, which is to be collected by the Financial Management Service after notice by the Department of the Treasury (Treasury)

.

To our knowledge, no one yet knows what the acceptable/not-acceptable criteria is.

4.Requires state exchanges to send to Treasury a list of the individuals exempt from having minimum essential coverage, those eligible for the premium assistance tax credit, and those who notified the exchange of change in employer or who ceased coverage of a qualified health plan.

These would be the state exchanges that have not yet been set up. Deadline is October of this year. Any takers?

The people being spoken about here are exempt from ObamaCare because they do not make enough money. However, according to the CBO, there will be approx. 6 million Americans who make too much too qualify for the exemption yet not enough to sign up for health insurance. This group of people will be subjected to the ObamaCare penalty tax.

11. Authorizes IRS to disclose certain taxpayer information to HHS for purposes of determining eligibility for premium tax credit, cost-sharing subsidy, or state programs including Medicaid, including (1) taxpayer identity; (2) the filing status of such taxpayer; (3) the modified adjusted gross income of taxpayer, spouse, or dependents; and (4) tax year of information.

Again, the IRS: all up in your business where they have never been before and disseminating said business to another federal bureaucracy.

22. Imposes a 40 percent excise tax on high cost employer-sponsored health insurance coverage on the aggregate value of certain benefits that exceeds the threshold amount.

Companies get wacked for not providing enough healthcare coverage and wacked for providing too much.

44. Imposes a tax of 2.3 percent on the sale price of any taxable medical device on the manufacturer, producer, or importer.

Dem pols in the Boston area who voted for ObamaCare are trying to get this tax thrown out as they are only now figuring out that tax will actually have adverse effects on the medical industry of the Hub City.


Again, go to the link for the entirety of the list.




Exit question: We may try to expand on this later, but can a Republic reach a point where they've got pretty much all their basis covered but since they maintain a full time legislative body that is sent to the nation's capitol to do something, they wind up being far more counter-productive than not?

Medicare Part D, TARP, Porkulus, Dodd-Frank Fin-Reg, Cash for Clunkers and, of course, ObamaCare...


It's worth considering.

It's like deja vu all over again (UPDATED)

"You have to ask the question: Have we figured out what got us here in the first place and are we going to make sure we don't replicate that failed system?"

That from Scott Garrett (R-N.J.) on the high amount of delinquent and foreclosed mortgages on Fannie Mae’s books currently.

In the wake of the mortgage meltdown, the Federal Housing Administration has emerged as a pillar of the still wobbly housing market -- providing vital insurance that enables borrowers to qualify for loans with as little as 3.5% down.

This year alone the agency has backed nearly 2 million mortgages worth at least $328 billion. It insured 21.5% of all new mortgages last year, up from fewer than 6% in 2007.

Some lawmakers, however, worry that the FHA may be doing its job too well -- enabling too many people with shaky finances to get loans, and in effect setting up a potential repeat of the housing bubble fueled in part by no-questions-asked subprime loans.

We don’t know what would lead people to that conclusion especially when the current number of FHA loans that are delinquent or in foreclosure climbed to nearly 8% at the end of June from about 5.5% in early 2006 and Fannie is permitting people to plunk down as little as 3.5% down, no questions asked.

According to some, the wet blanket party just needs to pipe down.

One proposed solution to the agency's troubles, backed by Garrett and others, is to raise the minimum down payment on FHA loans to 5%. Backers believe that will encourage borrowers to stay in their homes and not let them fall into foreclosure.

But new FHA Commissioner David H. Stevens said such a move could threaten the nascent housing recovery. A person looking to buy a $300,000 house, for instance, would have to raise an additional $4,500 for the down payment.

"All that's going to do is retard recovery," he said.

Raise an additional $4,500 for the down? That’s criminal.

Though were certain that while the term “retard” is useful here it was not used in its proper context.

We suppose the best thing that could be said about this program is that it appears to be only slightly less dreadful than say, Cash for Clunkers only in that we are not burning down existing homes to create a demand for new ones. The government is creating demand instead by pumping tax dollars into a scheme whereby homeowners and potential homeowners have very little skin in the game and thus little incentive to stay up with their mortgage payments.

The political class and perhaps much of America does not yet appear ready to face the prospects of a long slow recovery from the housing collapse that will wring-out the excesses and bad actors opting instead for serious flirtation with another housing crash.

What is it that we keep hearing about a double-dip recession?


(UPDATE #1): And the hits just keep coming…

The Federal Housing Administration, which insures mortgages with low down payments, may require a U.S. bailout because it has $54 billion more in losses than it can withstand, a former Fannie Mae executive said.

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” consultant Edward Pinto said in testimony prepared for a House committee hearing in Washington today. Pinto was the chief credit officer from 1987 to 1989 for Fannie Mae, the mortgage-finance company that is now government-run.

The FHA program’s volumes have quadrupled since 2006 as private lenders and insurers pulled back amid the U.S. housing slump, Pinto said. The jump has left the agency backing risky loans and exposed to fraud in a “market where prices have yet to stabilize,” he said.

Backing risky loans? At 5 percent down and no questions asked? We think you’re racist for thinking you just can't throw around tax payer money like free candy.

Quickies: the completely manufactured debt ceiling deadline panic edition

A round-up of what some people have been saying about the debt ceiling deal.




First, B-Daddy of The Liberator Today encourages us to take the long war view of this:

It's warm at my house, (I was going to say hot, but we live in San Diego, CA not San Diego, TX). My son's room seemed especially warm, so I turned on his overhead fan. A while later, I went back in his room and it was still uncomfortable. The fan was spinning fast, but in the wrong direction, sucking air up from the floor and blowing it towards the ceiling. This fan has a remote control, with way to many buttons; but I managed to hit the button to reverse the flow. (I know I am probably not supposed to do that, but quit interrupting.) As soon as I hit the button, nothing seemed to happen, the fan was still sucking air from the floor. But after a while, I noticed that it had started to slow. Sure enough, it continued to slow and slow, eventually coming to a complete stop and reversing direction.

So here is the deal with this execrable debt ceiling deal; we've got a fan spinning at high speed in the wrong direction and threatening to fly apart. But the only reasonable thing to do is apply a countervailing torque that will eventually reverse the flow. Sticking a pitchfork between the blades to get it stop instantly isn't going to be good for the fan or the pitchfork. But that means that we have to keep the torque constantly applied, because this fan has a lot of mass and momentum built up over decades.

A lot of tea partyers are incensed by this deal. That may not be such a horrible thing. Let's harness that anger toward taking back the Senate and the Oval Office in 2012 where we might possibly be able to do something about the real budget busters: entitlements (Social Security, Medicare and Medicaid which is not getting nearly the attention it should considering the horrible fiscal condition of many of our states).





Over at our blog buddy, Harrison's place, we made the following comment on his take on Biden's tea party = terrorist outburst and the liberal-Left echo chamber:

So, when the liberal-Left finally gets around to “pedophile” will that be the end of the line or do we just start the whole “racist-extremist-terrorist-pedophile” cycle all over again?

Oh-no. Looks like we're in a bit of an echo chamber of our own as Jim Treacher turns the tables in his tweet:

So we're terrorists for "holding the country hostage"? Okay, then: For what you're doing to future generations, you are pedophiles. Own it.

Then again, maybe pedophile just doesn't make the cut in the liberal-Left pejorative handboook.





Crime, smog, traffic and graffiti and all they have to show for it is their crappy newspaper.

Yep. Leave it to the L.A. Times to politicize Gabby Giffords' return to the floor of the House a couple of days ago to cast her debt-ceiling vote.

Steve McCann at The American Thinker is shoveling dirt:

The Obama Presidency is over. He has abdicated all responsibility to the Congress, in particular the House of Representatives, which has little choice but to assume a role they are not structured to do: lead the country as best they can until November 2012. The American people, suffering under the burden of high joblessness, eroding housing values, inflation and dramatically declining economic growth with no prospect of any immediate relief, are increasingly resigned to the fact that they must focus on surviving as best they can until the election.

To paraphrase a famous quote: rumors of the President's demise are greatly exaggerated.

McCann, however, is correct in his assertion that in kicking the can down the road with respect to dealing with the debt ceiling issue, the Democrats and the President were spoiling for a fight with the Republicans, to the exclusion of all else that is ailing this country right now. They gambled on this and they got worked. And for all that, the President came out looking ineffectual and incompetent. Hope he likes apples.




Stephen Green at Pajamas Media may not believe Obama's Presidency is over but the gravy train has definitely been derailed.

President Obama has had a good two-plus years, handing out deficit-busting goodies to all the favorite Democrat constituencies. The EPA has become the monster it always threatened to be, the unions are stuffed full of automakers and have the mighty Boeing trembling at their power. The insurance companies are wards of the state, the medical profession has been saddled and broken. The symbiosis of Washington and Wall Street is complete, each too big to fail and utterly, sickeningly and dangerously co-dependent.

But yesterday’s debt deal showed that Obama’s goodie bag is empty. There’s nothing more to hand out. Santa Claus has left the building, and the Grinch has taken his place.

“Honestly,” the Democrats must be wondering, “what good is he to us now?”

(italics, ours)

That would be the Keynesian gimmickry goodie bag, Mr. Green.

Porkulus fail. Cash for Clunkers fail. Cash for Caulkers fail. HAMP fail.

All these wonderful and well-meaining programs that were designed to lift us out of the recession and propel us into economic prosperity only served to forestall a real recovery and now it looks as though the stall has been overcome by gravity and we are once again heading back into recessionary territory.


And, of course, Charles Krauthammer chimes in on... patent reform?:

More bridges

And speaking of Keynesian gimmickry and "dead"... Rich Lowry shovels some of his own dirt.

Sen. Dick Durbin, the liberal lion from Illinois, pronounces the debt deal “the final interment of John Maynard Keynes.”

The burial ceremony should be a nice, simple one after the violence done to the aged economist by the failure of the broad Obama stimulus program. The administration’s serial overpromising in his name did more to discredit Keynes than a century’s worth of broadsides by his intellectual enemies.

Nearly three years into the Obama administration, the unemployment rate is more than 9 percent, a grassroots movement devoted to cutting government has the upper hand in the House of Representatives, and the debt of the United States could well be downgraded by Standard and Poor’s. If Durbin thought that in these circumstances Keynes was heading anywhere other than a pine box, he hasn’t been paying attention.

It must be an alliterative thing because we never hear or read the term "conservative lion". But considering that Durbin ascended to that title after Teddy Kennedy's passing, maybe what qualifies one for "liberal lion" status is trashing our troops over in Iraq.


OK, gang, that's it. Hope you enjoyed this special mid-week edition of Quickies.

Taking stock of a very unsavory development

The national debate… and we say that in the most overarchingly generic of terms... is now officially pegged-out. To be precise, one-side of the debate is officially pegged-out.

In an interview yesterday Jimmy Carter told Brian Williams that an “overwhelming portion” of the animosity displayed towards Barack Obama is racist in nature.

Capt. Ed makes the point that if you believe as Carter does then you must also believe that any criticism of Israel is overwhelmingly anti-semetic. Both points follow the same logic

We plop all this squarely at Obama’s feet. (Thud) There it is champ, own it.

He’s had ample opportunity to admonish his people for the careless chucking-around of such a serious accusation but he has shown no inclination to do so which causes us only to further question whether he desires to be this country’s leader or merely a shameless pol peddling his legislative agenda at any cost.

Should we be surprised, though? We’ve seen his surrogates, water-carriers and fans in action for about a year and a half now and we know what they are capable of.

Let’s dust off an oldie but a goodie. The Obama-celebrity pledge.



“I pledge to be a servant to our President”... “I pledge to be of service to Barack Obama”

Does this sound like the type of critcal thinking that is going to respond in a logical fashion when being challenged on policy matters? Do you think that you are going to illicit anything but stuttering disbelief and possibly ear-piercing shrieks charging apostasy if you dare question the Dear Leader?

If you think we’re spending a bit too much time on this… get over it because we are at once bemused and infuriated at these developments. Bemused as we see the President’s lackeys twist themselves into fits of rage as they can no longer compete in the marketplace of ideas and are reduced to playing the card of last resort and infuriated, as the implication suggests, we are racist for merely opposing Obama’s policies.

For providing solid evidence that Cash for Clunkers is economically and environmentally dubious, we are racist. For taking a sober look at healthcare reform and concluding that while there are no actual death panels, because of the way Obamacare is wired it will tilt the playing field towards the probability of the same results and for that we are racist. And for suggesting that the President has been less-than-forthcoming about how it is he will pay for healthcare reform, we are racist.

By this logic again, when we do commend the President, are we suddenly washed clean of the sin of racism?

Unfortunately, this (race) horse is out of the barn and barring some sort of miracle it’s going to be a pretty miserable next 3-1/2 years.

Not so random thought of the day

Who really is the Party, or more accurately perhaps, the culture of "No"?

Consider:

All the hundreds of billions (trillions?) we've dumped into various stimulus packages thus far don't seem to have helped employment in the private sector one bit. In fact, one could make the argument that the government spending has crowded out activity on the private side. Do you think we can cut back on that a bit, if not shut off the porkulus spigot entirely?

Answer: No


About the myriad of demand-side Keynesian programs and gimmicks? Yeah, those housing credits, Cash for Clunkers, Cash for Caulkers, etc., etc. Hasn't helped. Is it possible we can re-think how better to spur demand and get the economy on track?

Answer: No


OK, then. What about our national sovereignty? Instead of the usual prattle about "comprehensive immigration reform" (which, come to think of it, really is the most transparent aspect of the political class, these days), can we get serious about border enforcement? Is it possible that we acknowledge that narco-violence and environmental destruction in the desert southwest is a huge problem and our laxity in addressing it in a clear and sober manner is part of that problem?

Answer: No


Incompetency is one thing but corrupt incompetency is entirely another. Would it be too much to ask of the political class for some transparency and a whiff of ethicalness in behavior and how they craft legislation? Transparency and ethics are the things they said they would return to D.C., after all. So, how about it?

Answer: No


Health care reform? No one read this thing. The political class that championed it has all but admitted that they haven't read it. And it was written by lobbyists from both the pharmaceutical and insurance industries - the very people demonized by the political class in order to get this filthy, rotten piece of crap rammed through sideways. Pelosi had a point: we are indeed finding out what's in this thing after the fact. And the more we find out about it, the bigger a complete disaster this thing is proving to be. The American people don't want it as recent election results are bearing-out. But it's still going to be inflicted upon us, right?







Answer: Yes!

Oh. We stand corrected. Sorry for wasting everybody's time.