Fausta's Blog

American and Latin American Politics, Society, and Culture

January 7, 2011 By Fausta

The guy who first thought of “cash for clunkers” tells you it’s wasteful

Victor Dial writes in today’s WSJ,
Ou Est Le ‘Cash for Clunkers’?
Not surprisingly, the idea of subsidizing new cars came from France.

You probably wonder who’s Victor, and what does he have to do with cash-for-clunkers?

Most Americans wouldn’t know it, but the Cash for Clunkers model originated in Europe in the mid-1980s. I was in charge of sales and marketing for Peugeot at the time, and the government-incentive idea was co-developed by my company, Renault and the French government.

Merci beaucoup for that beaut, Vic!

Now, here’s what happened: the automakers wanted a handout, and the labor unions and the environmentalists love it.

The losers were French taxpayers, but then they are accustomed to suffering in impotent silence.

As Hillary once said, “you don’t have to love it, you just have to toe the line”. Of course Vic was surprised when the Americans didn’t exactly embrace the idea,

When the program started in 2009, I admit I was surprised at the almost immediate outcry from economists, pundits and, yes, citizens, denouncing it as wasteful. They were, of course, right: It pulls forward new car sales, but it also scraps perfectly good, serviceable vehicles, thus lowering supply and driving up used-car prices.

In the U.S., the predicted volume was underestimated, the budget was woefully inadequate, and the government was unable to process payments in a timely manner. Cash for Clunkers quickly became a synonym for government overreach and incompetence.

What surprises me is that Vic is now saying,

In Europe, few question government intervention in industry or hold government accountable. In the U.S., as the tea party has shown, even if government doesn’t care about accountability, the citizenry does. And to that I say, Vive la différence!

What’s Vic doing about it? Nothing. Too bad he didn’t jump in and speak out when the cash-for-clunkers program was first proposed.

Thanks for nothing, Vic.

Cross-posted at The Green Room

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Filed Under: cars Tagged With: Cash for clunkers, Fausta's blog

July 19, 2010 By Fausta

How about the jobs killed or prevented?

First, Ed’s post:
TARP audit claims Obama admin destroyed “tens of thousands” of jobs in dealer closures

Last year, while the Obama administration seized two of the nation’s three main domestic auto manufacturers, it also shut down thousands of dealerships across the country, supposedly to stabilize GM and Chrysler.  A new report from Neil Barofsky, the Inspector General of the TARP program, calls into question that decision.  In a sharp rebuke to the White House, Barofsky says that the action needlessly cost tens of thousands of jobs and extended an already-disastrous downturn in employment:

President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.

The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.

“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.

Moe Lane gives you

The short version?  Having the government do your restructuring for you isn’t necessarily the brightest thing in the world.  Particularly when there’s a variety of conflicting objectives.  At least, if what you’re trying to do is actually create a better version of your company; if your goal is to use government fiat to streamline the operations of your newly government-owned automobile manufacturer it apparently works out just fine.

It’s all about incompetence; you mean to tell me that having two guys in charge whose entire automotive industry was driving a car, and being a union negotiator, wouldn’t work? Who’d have thunk it!

Speaking of jobs, Caroline Baum notes that Obama Omits Jobs Killed or Thwarted from Tally

“If the administration wants to take credit for ‘jobs created or saved,’ it should also accept responsibility for ’jobs destroyed or prevented,’” said Bill Dunkelberg, chief economist at the National Federation of Independent Business.

That would mean accepting responsibility, which they are not about to do.

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Filed Under: Barack Obama Tagged With: bailout, Cash for clunkers, Fausta's blog, GM, TARP, unemployment

May 15, 2010 By Fausta

Congress upset that Toyota tried to defend itself?

Fumento has the details:

The Washington Post has revealed “Toyota officials sought to develop a public relations campaign to attack the credibility of key witnesses who have testified before Congress about acceleration problems with the company’s cars.

It further says, “Congressional investigators have demanded to know from company officials whether a campaign to debunk or discredit their witnesses was put into action.”

That’s what happens when you have government as your competitor.

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Filed Under: cars, Congress, Democrats Tagged With: bailout, Cash for clunkers, Fausta's blog, GM

May 15, 2010 By Fausta

Congress upset that Toyota tried to defend itself?

Fumento has the details:

The Washington Post has revealed “Toyota officials sought to develop a public relations campaign to attack the credibility of key witnesses who have testified before Congress about acceleration problems with the company’s cars.

It further says, “Congressional investigators have demanded to know from company officials whether a campaign to debunk or discredit their witnesses was put into action.”

That’s what happens when you have government as your competitor.

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Filed Under: cars, Congress, Democrats Tagged With: bailout, Cash for clunkers, Fausta's blog, GM

May 1, 2010 By Fausta

Again, GM paid nothing.

Reason TV:

GM paid nothing. You did.

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Filed Under: business, Democrats Tagged With: bailout, Cash for clunkers, Detroit, Fausta's blog, GM

May 1, 2010 By Fausta

Again, GM paid nothing.

Reason TV:

GM paid nothing. You did.

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Filed Under: business, Democrats Tagged With: bailout, Cash for clunkers, Detroit, Fausta's blog, GM

December 1, 2009 By Fausta

Climategate: Money for nothing?

Was reading this article in the Wall Street Journal when I remembered this song from Dire Straits, where they said that to make real money you should be a rocker instead of someone with a real job, say, selling appliances:

We got to install microwave ovens
Custom kitchen deliveries
We got to move these refrigerators
We got to move these color TV’s

Now that ain’t workin’ that’s the way you do it
You play the guitar on that MTV
That ain’t workin’ that’s the way you do it
Money for nothin’ and your chicks for free

More on the song in a moment; first let’s talk about the article:
Climategate: Follow the Money
Climate change researchers must believe in the reality of global warming just as a priest must believe in the existence of God.

Climategate, as readers of these pages know, concerns some of the world’s leading climate scientists working in tandem to block freedom of information requests, blackball dissenting scientists, manipulate the peer-review process, and obscure, destroy or massage inconvenient temperature data—facts that were laid bare by last week’s disclosure of thousands of emails from the University of East Anglia’s Climate Research Unit, or CRU.

But the deeper question is why the scientists behaved this way to begin with, especially since the science behind man-made global warming is said to be firmly settled. To answer the question, it helps to turn the alarmists’ follow-the-money methods right back at them.

Consider the case of Phil Jones, the director of the CRU and the man at the heart of climategate. According to one of the documents hacked from his center, between 2000 and 2006 Mr. Jones was the recipient (or co-recipient) of some $19 million worth of research grants, a sixfold increase over what he’d been awarded in the 1990s.

Why did the money pour in so quickly? Because the climate alarm kept ringing so loudly: The louder the alarm, the greater the sums. And who better to ring it than people like Mr. Jones, one of its likeliest beneficiaries?

Thus, the European Commission’s most recent appropriation for climate research comes to nearly $3 billion, and that’s not counting funds from the EU’s member governments. In the U.S., the House intends to spend $1.3 billion on NASA’s climate efforts, $400 million on NOAA’s, and another $300 million for the National Science Foundation. The states also have a piece of the action, with California—apparently not feeling bankrupt enough—devoting $600 million to their own climate initiative. In Australia, alarmists have their own Department of Climate Change at their funding disposal.

And all this is only a fraction of the $94 billion that HSBC Bank estimates has been spent globally this year on what it calls “green stimulus”—largely ethanol and other alternative energy schemes—of the kind from which Al Gore and his partners at Kleiner Perkins hope to profit handsomely.

That doesn’t include the $1.5 million Al got from his Nobel Prize, by the way.

It also doesn’t include wasteful government programs like the upcoming $300 million dollars’ worth “cash for appliances”: ‘Cash for Clunkers,’ household edition
Program expected to boost appliance sales as economy drags

Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.

The timing will make a difference:

Although the $787 billion stimulus program was signed by Obama in February of 2009, much of the cash-for-appliances money won’t hit the streets until next February, March or April. The rebate program is being run by state governments, which must define and enact their rebate plans with federal government funding and approval. A survey of some of the largest states shows that California is planning to begin its program in March, New York in February, Pennsylvania in the spring, Illinois in January and April.

Under the program, Virginia is expected to receive $7.5 million, Maryland $5.4 million and the District $568,000, but the requirements and rebates have not yet been disclosed.

As Ed pointed out the other day,

This is called price signaling, and consumers would be crazy to ignore it.

Yes, indeed. Still, do you expect you’ll be able to replace your small fridge for a full-size Sub-Zero with what you’ll get from the “cash for appliances”? Nope:

While the programs will vary by state, some of the proposed rebates that have been announced so far range from $50 to $100 per appliance.

That $100 won’t go far if you have to pay for having the old fridge removed and the new one delivered.

The bottom line on all this “green”, global-warming related spending is budgetary policy made to spend huge sums of money are on what has been shown to be a fraud – the premise of anthropogenic global warming.

Think about it: $300 million to be spent on subsidizing appliance purchases to the tune of $100 per appliance? Do you expect that 3 million appliances are going to be replaced? Heck no, instead it’ll go down the sinkhole of government bureaucracy, bankrupt businesses that the government has found it expedient to bail out, and vested interests that exist in what the WSJ calls “an ecosystem of their own”

Today these groups form a kind of ecosystem of their own. They include not just old standbys like the Sierra Club or Greenpeace, but also Ozone Action, Clean Air Cool Planet, Americans for Equitable Climate Change Solutions, the Alternative Energy Resources Association, the California Climate Action Registry and so on and on. All of them have been on the receiving end of climate change-related funding, so all of them must believe in the reality (and catastrophic imminence) of global warming just as a priest must believe in the existence of God.

None of these outfits is per se corrupt, in the sense that the monies they get are spent on something other than their intended purposes. But they depend on an inherently corrupting premise, namely that the hypothesis on which their livelihood depends has in fact been proved. Absent that proof, everything they represent—including the thousands of jobs they provide—vanishes. This is what’s known as a vested interest, and vested interests are an enemy of sound science.

But back to the “cash for appliances”: Supposedly, it is based on the assumption that for every $92,000 expended, one job would be created.

Well, maybe Dire Straits was wrong in saying there’s no big bucks to be made in appliances, after all.

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Filed Under: business, economics, economy Tagged With: bailout, cash for appliances, Cash for clunkers, Climategate, Fausta's blog, stimulus bill

September 14, 2009 By Fausta

“I think most people won’t even classify themselves as Republicans anymore.”

From Reason TV’s coverage of the Saturday September 12 Taxpayer March in Washington, at the 4:34 mark:

“I think most people won’t even classify themselves as Republicans anymore.”

Will the Republican Party take notice? Don’t bet on it.

C-Span video here via Pamela

racist_sign-225x300

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Filed Under: Fausta's blog Tagged With: bailout, Cash for clunkers, Fausta's blog, September 12 Taxpayer March, stimulus bill, Taxpayer March

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