The only part of the stimulus program that is working, the cash-for-clunkers program is, in reality, a subsidy to foreign car companies, proving that Barack Obama is the best president Japan ever had.
The Department of Transportation reports that the ten leading trade-ins are all American branded cars while six of the top ten new cars purchased - and four of the top five - are foreign. So the United States Senate is about to pass additional funds to subsidize the trade-in of American cars and the purchase of foreign cars.
DOT reports that the following are the ten top trade-ins, all American:
Ten Top Trade-Ins Under Cash for Clunkers
1. Ford Explorer
2. Ford F150 Pickup 2WD
3. Jeep Grand Cherokee 4 WD
4. Jeep Cherokee 4 WD
5. Dodge Caravan/Grand Caravan
6. Chevrolet Blazer 4 WD
7. Ford Explorer 2 WD
8. Ford F150 Pickup 4 WD
9. Chevrolet C1500 Pickup 2 WD
10. Ford Windstar FWD Van
And the top ten new car purchases, subsidized by the American taxpayer, are mainly foreign vehicles:
Top Ten New Car Purchases: Cash for Clunkers
1. Toyota Corolla
2. Ford Focus FWD
3. Honda Civic
4. Toyota Prius
5. Toyota Camry
6. Ford Escape FWD
7. Hyndai Elantra
8. Dodge Caliber
9. Honda Fit
10. Chevrolet Cobalt
It is a violation of the World Trade Organization rules to enact a public subsidy program and skew it toward only domestically produced products, so the Congress has no choice but to extend the program to all comers. No choice, that is, but to not spend the money in the first place.
Cash for Clunkers will do wonders for the Japanese economy, but its impact on the US job situation is problematic. This unintended consequence is a great illustration of what happens when the blunt tool of government subsidy is applied to the fine tuning of a free market economy. Government planners keep getting it wrong. That’s why socialism is such a bad idea.
So Obama can boast of a great success in taking American cars off the road and replacing them with foreign cars. Great going!
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Thank you for this insightful article on Clunker Welfare.
It would have been fair-minded to show which of the Japanese autos are being assembled in the USA. Yes, the gross proceeds are earned to the Japanese parent Cos, but USA wages, income taxes, payroll deductions, state sales tax all remain here.
A recent astute WSJ article correctly noted two important aspects to this Obamanomic program;
- The USA consumer will always opt to keep-up-with-the-Jones’ when it is Jones who will pay for your new driveway adornment.
- Lawyers are miserable businessmen. Last I checked, not a single Fortune 500 was headed by an attorney. We do not allow attorneys to sit on our Boards.
These simpletons did not revive, fix and / or save the auto industry, they’ve exacerbated the industry’s problems by accelerating tomorrows’ sales to the current quarter. This program will extend and prolong the industry’s downturn.
[…] Thus far, the “Cash for Clunkers” program has been the only “stimulus” program thats really “stimulated” anything. Of course, it ran out of money in the first part of its program within 4 days after it was supposed to last until October. Now with $2 billion MORE going to Cash for Clunkers, a lot of people would say, so what the problem? It got people out buying cars, hence “stimulating the economy”. That is true, but there are side effects. #1 is it takes perfectly good working cars off the road so they can be “crushed” and their engines sent to China. Another part is that what are people buying? From Dick Morris heres the top 10: […]
Dick makes a good point about most of the vehicles being purchased are foreign. I saw one assessment that indicates 80% are non American, 10% are Fords and only 10% to Obama motors (i.e., Chrysler and GM). One statistic that will be interesting to watch is how many of these cars are repossessed or after a few months how many people are having second thoughts. The dealer offers the car probably at MSRP (which is the top price) so in effect the $3500 to $4500 clunker trade-in has a marginal impact, even if the dealer offers other incentives.
If the buyer is driving an older vehicle (it is probably paid for) and if they need a government program (which is robbing Peter to pay Paul) for the down payment, more than likely their finances are not in great shape. Now the buyer is faced with a $15000 to $40000 dollar vehicle to be financed over 4 to 6 years. Which in effect adds to the growing 300 trillion dollar consumer debt in this country and is why the economy is not responding (there is no free money in people’s budgets to spend).
There is an old saying in engineering. If you want something you will have to give something up in return. So a new car translates into perhaps a small blip of economic activity in the near term but the incurred debt will lag the economy in the long term because buying power is diminished for needed appliances, food, medicine, or other necessities.
[…] he think this is not going to be an issue in the 2010 congressional elections and also in 2012? CASH FOR CLUNKERS: TRADE IN AMERICAN; BUY FOREIGN at DickMorris.com The only part of the stimulus program that is working, the cash-for-clunkers program is, in […]
It’s nice to see my taxpayer dollars are hard at work. Cash For Clunkers, new Govt Jets to go flying around in, auto bailouts…..Yeah, real nice.
Hey Pelosi, where the hell is my new jet?
Someone apparently voted these idiots in office……Well, they can be voted out, right?
Chris
vm
I heard there was a catch to it in the fine print. This is just something I heard from someone that started to get a new car for clunkers.
[…] a good writer and his analysis is usually dead-on as in one of his more recent articles he points out that “…Barack Obama is the best president Japan ever […]
[…] Morris: CASH FOR CLUNKERS: TRADE IN AMERICAN; BUY FOREIGN Updates: Corrected Dealership Payment Receipt Info/Added Related […]
[…] Cash For Clunkers: Trade In American; Buy Foreign […]
[…] From Dick Morris – H/T […]
[…] Originally Posted by Back Atcha … explain why the Cash for Clunkers program was a failure? The supposed purpose was to STIMULATE the US ECONOMY…….yet old American Made autos were traded in…..and guess what was purchased by majority with OUR TAX MONEY? You got it….German, Japanese, Korean, Swiss, and English autos, by a 50% ratio, for every 10 autos sold under the Government payoff…..at least 5 were of the foreign variety, some have real figure closer to 7 out of every 10…..REAL STIMULATING….to the America Auto industry and blue collar worker…no? I place this right up there with the sale of the Hummer to China, supposedly because the Hummer was smog machine…….so it is sold to who, that has the money to mass produce this smog hog and flood the world market? The Greatest polluting nation upon the face of the earth…….GENIUS. I wonder if Sanford and Son has any more ideas about JUNK/YARD SALES? CASH FOR CLUNKERS: TRADE IN AMERICAN; BUY FOREIGN at DickMorris.com […]
[…] sell his share in this corporate at a tremendous PROFIT……FISHY? No Chicago politics as usual. CASH FOR CLUNKERS: TRADE IN AMERICAN; BUY FOREIGN at DickMorris.com Last edited by bluedog; Today at 10:17 […]