Surprise, surprise. Maybe Mr. Gearhart knew what he was talking about!
The cash for clunkers program did nothing to help out the car industry as a whole. In fact, GM and Chrysler (you know, the ones that got our tax money?) actually reported LOSSES for that month. And now, those of us that have semi crappy cars are seeing our cars go up in value.
For example. My wife’s car for putting around town is a big ol’ Dodge Ram V8 (the perfect example of a clunker). It leaks every fluid imaginable, but turns over EVERY time (those old better made cars will do that). Anyways, I’ve been checking up on the Blue book price, and its jumped about 800 dollars. If anyone out there has a similar car/truck, see for yourself.
This comes down to simple supply and demand. There aren’t as many older cars out on the market for low prices, and so that low price goes up a little. This is important for people like me that have a ”clunker” but couldn’t afford a new car payment. So now, instead of having all those extra payments to deal with(i.e. car payment, full coverage insurance, maintenance, etc.), I have a car that is worth more when I sell it to Carmax and buy another beat up car that has a bunch of miles. BUT I won’t have those extra payments, and that is what I touched on when I wrote my last post on cash for clunkers. The after affects of the cash for clunkers program will more than likely confirm my grade, but right now I give the program a D.
Why a D? For many reasons. First, the program did help SOME people, but mainly all it did was deter car sales for the following month because everyone who was thinking about purchasing a new car jumped on such a great deal. Also, the car companies that REALLY needed the help didn’t report positive numbers for that period, so all it helped out were the car manufacturers that were already doing good. The only reason it didn’t receive a failing grade is that because of the cars that were sold, there was SOME stimulation in related fields such as steel. I work in the steel industry, and we received a lot of orders in that time, and I imagine the same goes for similar car related industries. This has helped the economy on a small scale, and perhaps is a reason that things aren’t quite as dire as they were. If my predictions come true, however, the small blip on the chart in a positive direction won’t be positive for long and will more than likely fall back to where it was pre-cash for clunkers. However, I’m not going to give the program an F until my prediction comes true.
This post cross posted at www.ktracy.com and linked at www.mattersofopinion.net
