Cash for Clunkers was fine if you’re a car dealer
Doug Wilson, a long-time automobile dealer in metro Jackson now based in Flowood, wrote a troubling commentary in this space in the Aug. 31, 2009 issue. Though I certainly respect Mr. Wilson and his opinions, much of what he wrote in defense of the federal-government-knows-best “Cash for Clunkers” requires some further thought.
Mr. Wilson bases his arguments in support of Cash for Clunkers on a false choice. He asks whether you would rather: 1) pay for the $3-billion government “incentive” that was Cash for Clunkers; 2) endure a $2 per gallon gasoline tax; or 3) watch the government outlaw large vehicles. But of course, no serious observer believes that the Congress would have or could have mustered the votes to impose a $2 per gallon gasoline tax, much less to ban pick-up trucks and SUV’s in a nation of commuters, soccer moms, farmers and hunters who love the larger capacities and safety that trucks and SUV’s offer.
So, my response to Mr. Wilson’s false choice is: None of the above, thank you very much. The fact is, the manner in which he chooses to cast the argument is exactly the way those who favor more government intervention in the marketplace and in our lives always justify it. Surely, the argument goes, you’d rather have the government do (here, fill in the blank with the big government program of your choice) rather than (here, fill in the worst possible thing you can think of, something on the order of, say, having your fingernails pulled out and being burned at the stake).
Instead of buying into such false choices, what we should do as taxpayers is respond to the government that we would literally rather have it do nothing than to foul things up worse than they already are. An important principle of American life comes into play here, that being that no problem is ever so big that the Congress can’t make it worse. When the government and its apologists paint a picture to try to convince us that things will be even worse if we don’t let them fix the latest crisis for us, well, that’s the time to be holding onto your pocketbook.
To Mr. Wilson’s credit, he does admit that he loves the fact that the government subsidized folks to come in and buy his cars. But, of course, “the government” is a convenient euphemism that really means all the rest of us. And at its core, it is just flat out wrong, let alone really bad policy, for the Congress and the President to force the working, taxpaying people of the country to pay falsely inflated prices for old trucks, only to have them sent to the junkyard and turned into recycled steel.
Here’s a perfect example of why. I own a 1995 model GMC Yukon with a terrible paint job, big swamp tires, a broken air-conditioner and a really bad interior. Our sons use it for a hunting truck. It’s now for sale, and we’ve had no bites on the truck at an offering price of $3,500, or at the reduced price of $3,000.
What that means is that in the open marketplace, no one in Central Mississippi is interested in that truck in that condition at that price. With patience, and if I either dress up the truck or reduce the price, or some combination of the two, I will attract an interested buyer pretty soon and make a deal.
But so long as Cash for Clunkers was at work, your government would have forced you, despite that fact that neither you nor I believe that my truck is worth $4,500, to pay me that much for my raggedy old truck so long I then bought a car that the central planners in Washington had approved for me to buy.
It might be, as Mr. Wilson blithely put it, “poetic justice” for most of the cars that were purchased during Cash for Clunkers to have been brands that were not American-owned. If I were he, I expect that I, too, would be pretty unhappy with the folks at Chrysler who terminated his dealership despite his many years of effective trading under that brand.
But poetic or not, it is certainly not in the best long-term interests of this nation’s economy, nor of the household budgets of millions of Americans, for the government to favor one industry out of thousands in this country and force the rest of us to underwrite it.
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