Would you like a guaranteed $4,500 for your trade in (regardless of what it is really worth) on the condition that you buy a new car? The House of Representatives apparently thinks you will. Well, 298 of its members do:
By a 298 to 119 vote, the House of Representatives passed a measure to give car buyers up to $4,500 for their old cars, as long as they buy a new one.
Not sure the Senate Republicans are going to go along with another “stimulus package” especially since this one does nothing for Wall Street bankers, but you have to admit this is a rather amazing action by the House. If you’re wondering why this bill got the fast track, I imagine it might have something to do with people screaming at the staff members of their Senators and Representatives about all the auto plant and dealership closings we’ve seen over the last few months. At least that’s what McClatchy is reporting is the reason for this sudden urge to help you out with your new car financing:
House leaders from both parties are also protesting auto company decisions to close dealerships. Chrysler plans to close 789 dealerships by mid-June, or about a quarter of its total, after giving owners about a month’s notice. GM plans to close about 1,100 dealerships by October 2010.
Rep. Steny Hoyer, D-Md., the House majority leader, complained that it was “irrational to close down dealerships which average 53 employees per dealership, and could quite possibly increase unemployment by 100,000 people if, in fact, it does not serve the economic interests of the manufacturers.”
Yes, I can already predict that the standard wingnut response will be that the Democrats are trying to control the decisions of automakers and socialize the automobile industry. Frankly folks, I say let them have at it. I know a few die hard Republicans in the retail end of the automobile business, people who are big time Limbaugh fans, but on this issue I think they may tell their ideological comrades to “Go Cheney yourself!” Funny how conservative principles about the free market and limited government and outraged shouts about “Tyranny” like this . . .
. . . go out the window when your own job and your own livelihood is dashed upon the cruel and rocky shores of the Free Market.
Because, yes, the market will self correct, but that doesn’t mean those jobs and those factories and those dealerships will ever return if left to the workings of “market forces.” The “free” market respects no international borders, and the freer it gets the greater the risk that you will be one of its victims some day. And your politics will matter not one whit on that day, whether you are a member of Bush’s “Ownership Society” with your own business and your own employees and your own subscription to the Limbaugh Letter, or you’re some poor union (or more likely non-union) blue collar worker for said owner.
History has shown us time after time that capitalism which is unrestrained inevitably crashes and collapses into economic turmoil, just as it is now. We let the devotees of Ayn Rand and Alan Greenspan and Milton Friedman have their way since Ronald Reagan was elected President and the evidence is stunning. The greatest income inequality in history. Solid well paying jobs sent overseas. Scoundrels on Wall Street permitted to fleece everyone they could get their greasy hands on, even themselves if they were stupid enough to buy into their own horse manure about the “financial products” they were “marketing.” For what the free market giveth a few, it takes away from the many, and these days unless you are some Citicorp or AIG senior executive getting your millions in bonus payments courtesy of the US taxpayer, it has likely taken a great deal from you and most of the people you know.
So let the batshit crazy free marketeers roar about how Obama is destroying their world. Even the carnival barkers and con artists have moved on. All that’s left is an increasingly insane, increasingly shrill group of faith based ideologues safe and secure behind the walls of their conservative welfare pavilions dreaming of the day when they were the masters of the universe, and bleating helplessly into the whirlwind which their ideas and their policies created. One wishes they were sincere about “Going Galt” if only so we wouldn’t have to ever hear or see them again on our TeeVees. Sadly, however, if there truly is one eternal verity of the universe, it is that discredited conservative pundits and think tank “fellows” shall always have a free seat on the network cable “news” shows to continue spouting their noisome nonsense for generations to come.
Ps. Don’t spend that $4,500 before the Senate gives it to you. I’ll frankly believe it when I actually see it.
Well I just got back from from Germany where they passed the equivalent to this bill last fall. The number of spanking new cars on the road there was eye-popping.
One should never underestimate the idiocy of Republican Senators, and a few Democratic ones as well.
The math makes sense that’s clear.
exactly, the American bill is actually inspired by the German one. Here you can get €2500 for your old car (has to be at least 9 years old) if you buy a new one. It was (and still is) a huge success. The amount of money put aside for this actually had to be increased because demand was so high. While it worked it didn’t necessarily stimulate the entire car industry in Germany. Mostly smaller cars were bought which mostly are not made in Germany but abroad. German companies building more expensive cars like Mercedes, Audi and BMW did not benefit at all.
Also, there were no environmental requirements. While the government called it an “environmental premium” you could have theoretically even bought a Hummer with that money. By pure economics it kinda turned out to be somewhat environmentally friendly as old cars with poor mileage are taken off the road and newer (small) cars with better mileage were bought.
discredited conservative pundits and think tank “fellows” shall always have a free seat on the network cable “news” shows
Is it my imagination, or are the think tanks multiplying like dandelions? Seems like every political talk show I watch has one or more talking heads from yet another Policy Institute for Strategic International Security Studies Forum Center that I never heard of before. Yet as soon as the talking head says anything, all I hear is the same talking points and buzzwords from the neo-lib neo-con echo chamber. I suspect most of these new Institute Center Forums for Strategic International Security whatever are nothing more than a letterhead and maybe a PO box, created by out of work chowder heads with too much time on their hands.
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In Europe and Asia this ‘green subsidy’ is focused on fuel efficiency as well as a stimulus for car manufacturing. See Germany, Britain, France and the far east China and Japan:
Tax incentives now in effect for new vehicle purchases
As of April 1, 2009, tax reductions came into effect in Japan on the automobile acquisition tax (imposed only at the time of purchase) and tonnage tax (imposed once yearly for the first three years) for the purchase of new vehicles meeting stipulated fuel efficiency and emissions criteria.
Next-generation vehicles, including electric and hybrid vehicles, are effectively exempt from these two taxes, which translates into a tax reduction per vehicle of roughly 150,000 yen, or about 1,125 euros*.
"But I will not let myself be reduced to silence."NBC reported last evening that the closing Chrysler dealers had to sell all remaining new vehicles by the close of the day, or make arrangements to send them to other nonclosing dealers. But since the remaining dealers can’t sell many cars either, they will now be inundated with new unwanted cars.
Too bad this “cash for Clunkers” bill only requires a 1 mpg improvement for trucks & something like a 2 mpg improvement for cars.
The details are on the net & google is your friend.
Hm. Those of us with real clunkers won’t be able to afford a new car no matter what.
I have an eight year-old Corolla (built in California) and unless new cars are going for $4,500 bucks these days I think I’d have to pass. My little retirement check would not cover it. Another argument for not letting the old folks starve, I guess.
Think of the potential for DIY entrepreneurship. E.g., I have a piece ‘o crap car in the driveway up on blocks and yet don’t really want/need a new car. You need a car but don’t have a clunker. So I sell my clunker to you for say, $1000. You then turn it in for cash towards a new car. Does anyone want a ’96 Lincoln?
Has anyone in Congress throught this through? The dealers must be wanting to shoot themselves. Most dealers make more money off used cars(as compared to new). Doing this will significantly hamper the value and sales of used cars. We sure are getting the Congress we deserve.
This is the kind of knee-jerk meddling that keeps me from identifying as a liberal. Let’s see: we’re on the verge of making human life, or at least human “civilization”, extinct because we buy too damn much shit, so let’s give people money to buy a bunch of new cars and not worry about whether they even get significantly better mileage.
Let’s not think about how the guys with some cash can buy a clunker for a couple hundred bucks and make a nice profit courtesy of the nanny state. Let’s not think about the net effect of turning disabled cars into cars clogging the roads even more (But that’s OK because then we’ll be stimulated to cover even more ground with roads and have even more sprawl and some more rich government-subsidized contractors keeping the beemer dealers open).
Let’s not consider an option to use the $4500 as mass transit credits, or restrict the cash to purchasing cars that meet 2016 mileage/emission standards. Let’s not think about whether, if we’re going to give away free money, using for a car is really the best use for the individual or for the country. Let’s not think at all when we can just morph into populist postures while we serve the best interests of the moneyed classes. This is one time I hope the Senatorial labyrinth sends a Democratic bill down the crapper.
I discussed something like this with friends. It could work if promoted as a National Security initiative, trading in older low mileage cars and trucks for ones at least getting at least 27mpg. Would lessen foreign oil dependence, decrease pollution, and (if limited to US cars) promote economic health. But would only work if clunkers are destroyed, not put back in the national fleet or shipped off to other countries.
Much better way to inject money into the economy than giving it to bankers.
R