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? (more…)