Cash-for-cars bill: pathetic
If I assume the Cash for Cars bill has been portrayed accurately by Automotive News, which is not necessarily a fair assumption, it’s pathetic.
First, who will it benefit? Largely, the Asian automakers and Volkswagen, who have the lead market share at this point. We are probably the only nation on Earth which provides no incentive to buy our domestic products. There’s no differentiation between domestic and foreign cars – though our tax dollars are going to the program.
Second, what will the benefit be? 22 miles per gallon is hardly excellent mileage for a car, though it’s admirable for a minivan and downright excellent for a full sized pickup. What’s more, the combined gas mileage will presumably be from the tainted old EPA methods, combined with the tainted allowances for ethanol.
Third, how will this stop people from buying a dead SUV for $500 in order to trade it for a $4,500 voucher?
I could go on with regard to free market, use of tax dollars, blah, blah, blah, but I’m sticking to the practical aspects. If we’re going to do this, we should do it right. From here, this looks like yet another insane plan.
Well. lets see. Hmmm…… You kown Dave, you have said it all. Another inane plan.
Something else that bothers me about this bill: there is no provision for removing cars that may have better fuel economy, but horrendous emissions. Vehicles like the old smoke belching non turbo diesel Mercedes. They may get close to 40 mpg, but that black smoke ain’t “green”. A 26 mpg Challenger would be cleaner.
To be fair:
There may be two considerations in that regard other than simple incompetence. One of them is the emission of greenhouse gases. The other is our reliance on oil, which continues to be a major problem for our security and foreign policy. Yes, we could drill out every source we have, but eventually we’d be back to relying on imported oil.
If we used less oil, we’d do far better with our balance of trade, and we would be able to reduce support of heinous dictatorships that support terrorism and have no civil rights – Saudi Arabia, I’m looking at you, but not ONLY at you.
This is a plan enacted by congress. What, exactly, is the surprise here? A stupid plan may not be better than no plan but these are the same folks that think it’s OK to kill the auto industry but not OK to let poorly managed banks die. More of the same. Congress critters are not known for intellect in the best of times.
Dave:
I’ll agree with you on some of the Asian automakers, but Volkswagen has a smaller market share than any Chrysler division and actually trails BMW slightly in year-to-date sales.
Something that is often overlooked is how Chrysler stacks up against the other nameplates in terms of brand sales. After four months of 2009, Chrysler is outsellng Acura, Audi, BMW, Buick, Cadillac, Hummer, Jaguar, Land Rover, Lexus, Lincoln, Mercedes, Mercury, Mini, Mitsubishi, Pontiac, Porsche, Saab, Saturn, Scion, Subaru, Suzuki, Volkswagen and Volvo. Jeep outsells all those plus GMC and Mazda. Dodge outsells those plus Hyundai and Kia.
Let’s face it: If the foreign brands hadn’t been included, there would have been no chance for any legislation like this to get anywhere near passage. Senators Corker (Nissan, VW), McConnell (Toyota), Shelby (Mercedes, etc.) and their buddies would have killed it dead. Not just to protect the vested interests, but to punish the UAW.
But there is a bright side: If you take the government’s money and add it to the incentives from the Detroit automakers, you’re getting a heck of a deal. Much better than any the imports are likely to offer and that could sway a lot of buyers, especially if GMAC can float enough loans that you don’t have to have perfect credit to get one. Think about it: Zero-percent financing and government cash. If Detroit can’t figure out a way to capitalize on this, maybe they should just hang it up and go home.
” If the foreign brands hadn’t been included, there would have been no chance for any legislation like this to get anywhere near passage. Senators Corker (Nissan, VW), McConnell (Toyota), Shelby (Mercedes, etc.) and their buddies would have killed it dead. ”
That would’ve been OK with me. $3,500 for a measly 4 mpg? (Okay, I have to admit that with the 2008 changes, that might actually end up being 6 mpg.)
Apparently there’s another thing in the works for trucks.
If they’re handing out money for free, at least they should have made it a challenge. Maybe, say, a ten mpg gain for the $3,500 and 15 mpg for the $4,500…
Bill, Jeep may outdo many other brands, but the fact is that the imports as a group outsell the domestics as a group, and Toyota and Honda and Kiundai are the real competitors.
This should have been killed. It’s pointless. For real change to take place 3 things are required:
More US cars that are worth buying that get decent mileage, $5/gallon gas and equal taxes/duties across the board.
I agree. For all Congress’ yammering about market forces, they rarely seem to apply them, under either party. What should have been done 20 years ago was a gradual increase in the gasoline tax of 2 cents per month, allowing the President to suspend up to 50 cents per gallon of gas tax for up to three months in case of a sudden, unnatural rise. (And not just gas tax, but also natural gas, oil, and power should have been taxed more heavily.)
I realize taxing fuel is regressive and affects those who can least afford it the most. That’s why I’ve suggested using the income to fund increases in social security payments, food stamp type programs, and a lowering of payroll taxes on the poorest Americans. Payroll taxes are insanely regressive – the more money you make, the lower your payroll taxes (as a percentage of income) since most of it stops before you hit six-digit salaries. Thus, the minimum-wage crew pays a much higher proportion of their income in social security tax than billionaires.
The thing is, the American automakers would have chosen to compete in small and midsized cars, had their been a domestic demand. Then they would have also had more competitive foriegn products.