Tree-hugging hippies. Tighty-righty fundamentalists. It doesn’t matter. As long as they stick to a few, simple criterion like I’ve described above government programs can be well run.
Where people start to go off the rails (and usually pretty quickly) is that they
Don’t restrict themselves to true externalities when they want to launch government programs (the FDA is a prime example)
Don’t even come within an order-of-magnitude of weighing costs of externalities vs. costs of the program (high-speed rail is a prime example)
Launch programs to address the supposed externality that actually makes things worse (ethanol subsidies and cap-and-trade are prime examples)
So on the whole, no problem was solved and the government made things worse.
I wouldn’t care if a government official was a 12-fingered tree-hugging hippie who smoked pot in chambers and had purple skin, as long as they stuck to the rules above.
Mara Liasson (who actually works for NPR, not Fox) actually had the good sense to realize that her Katrina metaphor might just be a bit over the top. Good for her.
The List (from the link)
1 Ford Escape
2 Ford Focus
3 Jeep Patriot
4 Dodge Caliber
5 Ford F-150
6 Honda Civic
7 Chevrolet Silverado
8 Chevrolet Cobalt
9 Toyota Corolla
10 Ford Fusion
(I know: National Review, wingnuts, Bush, conservatives, creationism, AGW deniers, teh suxx0r, whatever)
Now I am thoroughly confused. How can everyone have their own list? And how can everyone cite edmunds.com with a different result? I just posted a article from CNBC that looks like your list except that half is the trade ins and the other half are the new cars.
And here is one more article that is pretty thorough in its evaluation. Notable quotes I chose that seem to support my beliefs:
“The government has issued a list of cars that were purchased after trading in a clunker. The Ford Focus heads the top 10 car list followed by: Honda Civic; Toyota Corolla; Toyota Prius; Ford Escape; Toyota Camry; Dodge Caliber; Hyundai Elantra; Honda Fit; and Chevrolet Cobalt.”
“The average fuel-economy improvement when people traded in their clunker-eligible vehicle for a new one before Cash for Clunkers was 5.1 miles per gallon, from 16.1 mpg to 21.2 mpg. The improvement increased to 8.2 miles per gallon, from 16.1 mpg to 24.3 mpg, better when the vehicle was traded under the Cash for Clunkers program.”
Overall it seems like Ford did really well through all this. The F-150 has been a top seller as well as the Focus.
What on earth does this have to do with UHC?
Perhaps the ability for the government to create incentives and influence market behavior?
Based on the article, the increase in mpg used to be 1.6 and with this program rose to 8.2. Makes you wonder if the government could provide incentives to stop buying trans fats, or instill a general emphasis on better nutrition?
So without the program, trade-in-purchases were mostly SUVs and light trucks. But WITH the program, that trend shifted to include several very fuel efficient cars.
The conclusion I draw from this is that traditionally, the people that drove “the clunkers” would trade them in for new clunkers. Said another way, a person that bought an F-150 in the 90s would probably trade it in for another F-150. And come to think of it, my dad has been driving a Toyota 4runner since the mid 90s, every 5 or 6 years he gets a new 4runner. But with this program, a chunk of those drivers are opting for significantly more fuel efficient cars.
So, private industry has never run into trouble when a product became a lot more popular then expected? Why don’t you ask the dealers if they would rather the program had not started? I think you know what answer you’d get.
One good thing about your link - it seems that the sales are up to $1.7 billion already. Wasn’t it Mr. Stone who told us all the sales were robbed from previous months, and that it was running out of steam? (I had heard $1.3 billion a few days ago, so thanks for the update.)
Wow! Thanks for posting that! It certainly is better to have 50 million Americans with no health coverage than to have some doctors/auto dealers have to wait a little while for checks from Uncle Sam!
Why would a doctor/auto dealer want to be a part of the program, or why would someone thinking about becoming a doctor/auto dealer (and presumably, on the fence) make that decision if this is how they will be treated?
It will reduce incentives to increase supply. And will increase incentives to increase demand. Which leads to rationing. Like every other governmentally-run health system, or governmentally-run program that distorts market incentives.
Fixed-pie thinking. Yet again. And your side was supposed to be the ‘Progressive’, educated and smart side. Not like the Neanderthal fiscal conservatives and free marketeers.
Because they’re good at science and they want to help people? I think that’s generally why people become doctors, in contrast to your implication that people become doctors because the salary is high.
If your “point” about people looking at their paychecks and deciding not to become doctors were valid, one would think that medical school enrollments might be going down due to the ever-increasing cost of malpractice insurance. You remember malpractice insurance, it’s the thing that’s forcing good docs, like OB/GYNs, to stop practicing their love with women. Well, medical school enrollments are the highest in history and have been increasing for five straight years. Cite.
Ok, so you’re wrong on the first part, and as for the second part, why is it that every time I hear a conservative complaining that getting 50 million more Americans covered by health insurance would increase demand, all I really hear is a thinly-veiled hope that more poor people don’t jam up their own doctor’s appointment calendar? “My goodness! If the unwashed and irresponsible get health insurance, then my wife might have to wait a day or two to see the esteemed Dr Worthington J Snodgrass next time she gets a case of the vapours!”
Yes, I saw that. Let’s flag that and watch for a while.
Of course, GM was in bankruptcy, is funded by the taxpayer and is majority-owned by the union, who has every incentive to pad employee count with yours and my money.
And what happens to those workers when demand runs out?
In the meantime, there is a shortage of cars that are acceptable for the ‘clunkers’ program. What do you suppose is happening to the other vehicles? The ones that don’t get good enough mileage to take part in the program? Now there’s a glut of those vehicles. So what do you think is going to happen when the program runs out? A gold star for you if you guessed, “The price of the vehicles that are now in short supply will go up, and the price of gas guzzlers will go down.” This will stimulate the sales of the other vehicles, until everything is back in equilibrium.
Either way, is anyone predicting that two years from now dealers will still have unsold 2009 models sitting on their lots?
I wish some of you would take at least an undergrad economics course. This stuff isn’t hard to figure out. The distortions are clear to see - the automakers are paying overtime right now to crank out the more fuel-efficient vehicles, while the existing inventory of more gas-guzzling cars sees weaker than average sales because of this program. That’s what you claim you want to have happen. But what then? Does this mean the fleet average fuel economy will go up? Only if you’re supposing that those other vehicles will be destroyed and never sold. But they will be sold. After this program ends, we’ll probably see a sales mix that includes MORE gas guzzlers, simply because they will be rebated more so the inventory levels can be corrected.
In the meantime, you will have destroyed 750,000 cars that still had value. This represents about 5% of the used car market. What do you think might happen to the price of used cars? And what will that do to the used car dealerships?
The potential for perverse uninitended consequences are everywhere. The first thing I thought of is that really poor people who are driving real beaters will find their upgrade path choked off or more expensive. More of those people on the margin will continue to drive their old beaters - and they are by far the worst vehicles on the road when it comes to gas guzzling and emissions spewing.
But if the fleet is more efficient, won’t that save gas? Not necessarily. People with older used cars tend to not drive them as much. They’ll get new cars that get somewhat better mileage, but they’ll drive more.
And what about the energy cost of building those new cars and scrapping the old ones? Well, let’s do some math.
According to the GREET model produced by Argonne labs, it takes about 100 million BTUs to make a 3200 lb car. How much gasoline is that equivalent to? There are 113,500 Btus in a gallon of gas. So a 3200 lb car takes roughly the equivalent of 881 gallons of gasoline in energy to produce. BUt almost all cars are now heavier than that, so let’s round that up and say 1,000 gallons of gas. But let’s say these trade-in vehicles are through 80% of their natural life, and the program is artificially shortening them by two years. So there is 200 gallons of ‘residual energy value’ left in the vehicle. You will only save the planet gas if you save more than 200 gallons in gas over 2 years. Will you?
Let’s say the old car got 25 mpg and the new one gets 29, and you drive the average of 12,000 miles per year. With the old car, you would have used 480 gallons of gas. With the new one, you use 414. For a total savings of 66 gallons. Over the two years of life lost to the other vehicle, you saved 132 gallons of gas - and caused 200 gallons of gas to be consumed to do so. That’s a bad deal for mother Earth. And that’s before we consider all the other waste coming out of the old vehicle.
But at least it stimulated the economy, right? Not so fast. Two weeks ago, this outlook was printed, suggesting that the ‘cash for clunkers’ deal may simply shift purchase funds from other retailers, with little or no net gain in sales. Did that happen?
Excluding autos, sales fell 0.6 per cent, worse than the 0.1 per cent rise economists had forecast.
So, overall, including cars, sales were expected to rise .1%, but they fell .1%. But if you take out the cars, the rest of the market fell by a LOT more than what was predicted. The logical conclusion from that is that Cash for Clunkers simply pushed money from all areas of retail into auto sales.