Nov
07
2011

Cash for Clunkers’ failure: minorities, poor people hardest hit.

Or: Why Johnny Can’t Drive.

Washington Post’s Ezra Klein’s substitute writer Brad Plumer got the unenviable job of having to admit that the government’s infamous Cash-for-Clunkers stealth auto dealership bailout – in which people traded in still-useable cars in exchange for trade-in money for a new car – didn’t particularly stimulate the economy, didn’t improve US car manufacturer’s market share, and “increased average fuel economy in the United States by just 0.65 miles per gallon.”  The trigger event for this admission was this Resources For the Future report that is fairly damning, in its somewhat dry and equation-laden way: of course, we on the Right were all yelling about this issue right from the start, but it’s still nice to see some math backing us up.

Still, Klein’s substitute doesn’t consider another economic factor: what happened as a result of taking used cars off of the market.  You see, there’s a considerable demand for almost worn-out cars: poor people, young people, and/or urban minorities can maintain them well enough to be cost effective – if the price is low enough.  And what happens, class, when demand remains the same but the supply decreases? 

That’s right: prices go up.

It’s not unusual for price tags to be up $3,000 in some product segments in the last five years.

And the classic “beater” – a high-mileage, $1,500 used car that can handily take you around town on your errands – is fast becoming a thing of the past, according to some auction houses.

That article indicated that there had been a six percent increase in 2010 on used car prices overall.  For Democratic legislators – and other people slow of brain – that increase represents a genuine loss of buying potential among poor, minority, and young adult voters.  In other words, precisely the groups that Democrats were supposedly trying to help by ‘stimulating’ the economy.  And, as noted above: all of this was pointed out at the time, of course.

To sum up: I know that the temptation is strong to look at the people most affected by this, note that they belong to groups that are widely considered to be disproportionately Democrat-leaning, mutter “Elections have consequences,” and leave it at that.  In fact, that was my first reaction.  But these folks are still American citizens, and it’s not actually fair to let the Democrats get away with making them poorer.  So think of this as an opportunity to do some outreach and turn all of this into a teachable moment.  After all, civic improvement is everyone’s responsibility…

Moe Lane (crosspost)

 

5 Comments

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  • EastBayLarry says:

    As one of the ‘poor” (or at least ‘broke’), who has been affected by this I say Right On for pointing it out. My ‘beater’ is my only means of getting to the 10-15 hours of work I can find per week and it has become increasingly unreliable lately, (21 years old with 252,000 miles on it so I’m not really complaining).
    I’ve been looking for a replacement, but I couldn’t even afford to buy my current junker if it was for sale.
    So I check the oil and water daily and pray it will last until the economy turns around.

  • jeff james says:

    Which is not to mention the reduced sale of parts, and reduced income for those who work/ed on those older cars.

  • Kay B. Day says:

    Parts have gone sky high. My alternator blew and then my daughter’s. Both of us paid about $500 each for an alternator. I thought my husband was going to pass out.

    I asked the guy who fixed mine why the cost had risen so much–wasn’t the labor. He said, “You can’t find parts for used cars anymore.” I drive a 2003 Nissan Altima and I’m going to drive it until it collapses. I reckon I’ll be paying the price of Obama’s dumb idea until my car expires.

    Obama could screw up a cannonball with a rubber hammer.

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