I know, I know. Enough all ready with the clunker stuff. But these clunker programs are such clear and convincing examples of how politically driven and dysfunctional our government has become that I can’t seem to help myself.
And could anything says it better than this cartoon?
If you wondered, why, oh why, the CARS program was frantically rushed into place before manufacturers (particularly the taxpayer supported ones) could put their best foot forward with fuel efficient inventory of cars or the planning of the program could be more fully thought out and implemented? Wonder no more.
As Forbes points out about the Cash-for-Clunker CARS program:
The timing of the government program was politically convenient. One of the most significant beneficiaries is the third-quarter gross domestic product, which will be released in October.
Yes, timing is everything. And for the politicians, it seems, this program was timed perfectly! Unfortunately, GM and Chrysler found out the hard way that badly timed help can be worse than no help at all.
Industry-wide sales topped 14 million units in August as Americans ate up $3 billion in government incentives, but the beneficiaries were mixed. Ford Motor ( F – news – people ) and Toyota Motor ( TM – news – people ) saw sales rise 21.5% and 10.5%, respectively, while Chrysler fell 12.2% and General Motors dropped 17.1%.
Now with the “clunkers variable” removed, there is little to keep Americans buying cars.
So nice to know that congress is really dedicated to maximizing our investment dollars.
And still, the dealers are none to happy. According to Auto News, the National Auto Dealers Association survey from August 27th:
The first national survey of dealer reimbursement under the federal cash-for-clunkers program shows that rebates have been paid on 5.7 percent of the transactions submitted.
The survey also found that 6.3 percent of the claims had been rejected, 2.3 percent had been approved but not yet paid, and 2 percent had no status, said Robert O’Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association.
Some dealers have complained that they have not been reimbursed for claims filed as early as July 27, suggesting that some applications may have been pending for more than five weeks.
Which leaves, according to my calculator — 83.7% of rebates still pending. Ouch!
Let us not forget about that little $300 million Cash for Home Appliances program that is scheduled to start this fall. You know the one that congress passed on their way out the door for their August break. Less than 30 days later and before the program even has a chance to do its stimulative magic, Whirlpool announces a plant closing in the US.
From Market Watch:
Whirlpool Corp. announced Friday it will close its Evansville, Ind., factory next year, moving the plant’s production of top-freezer refrigerators to a facility in Mexico.
Citing the need to trim manufacturing capacity, Whirlpool said the mid-2010 plant closure will eliminate 1,100 full-time jobs.
…The company said it is also considering relocating its Evansville refrigeration product development center, a move that would affect another 300 jobs. “A decision is expected in the near future,” the company said.
No doubt, the government will decide to raise the ante on the clunker program by a billion or 2 to help “save” other appliance manufacturing jobs as they exit the country.
Now, this one is new, at least to me. There is $28 billion (that’s with a b not an m) in requests for a Cash for Clunkers-type stimulus to expand high-speed Internet service.
From the Sun Times:
The federal government said Thursday it had received requests for a total of $28 billion from groups that want to expand high-speed Internet service in the U.S. The government has $4 billion in loans and grants initially available.
The 2,200 requests came from states, counties, Indian tribes, nonprofits, phone companies, libraries, universities and other groups.
The money will be used to connect rural homes to the Internet, stimulate interest in getting Internet service among groups that don’t use it much and expand Internet access in public locations like schools and libraries.
The bulk of the requests — worth $23.2 billion — are to build out Internet lines…
The National Telecommunications and Information Administration and the Rural Utilities Service will pick the winning applicants and announce them in November.
Wow! They “will pick the winning applicants.” It sounds like the government is running a $23.2 billion lotto!
And not that I mean to be picky, but if only 23.2 out of 28 is going to build out internet lines, where is the other $4.8 billion going. I know its a drop in the bucket by comparison, but I have to say, money sure seems to be burning billion dollar size holes in our governements pocket.
Any other CLUNKERS out there that I’ve missed?