"Cash For Clunkers" Comes Back To Haunt The Poor (And Middle Class)

Written in August 2009:

....no one is looking at the toll this program takes on poorer and younger drivers. "Clunkers", whose main liability is fuel consumption as opposed to inability to operate, are being taken off the road, depriving the poor of lower-cost used vehicles, and making older vehicles harder and more expensive to maintain as parts literally disappear off the marketplace (these "clunkers" are being liquidated, literally). Does every new immigrant and post-college student have the credit to buy a new $20,000- (at least) car? Do they have the financial wherewithall to even make the payments ? How will they get around, unless the government now spends even more money on "public" transportation, assuming these folks have access to it?

Alas, the prophecy has come to pass - MSNBC, yesterday:

Prices soar on the used car lot

When Debra Neel went to check out used Jeeps recently in Indianapolis, she left with a bad case of sticker shock.

"We were looking around $4,000 or $5,000 for a good used car for a teenager," but "you can't find them anymore," Neel said. That was readily confirmed by Bob Falcone, president of Falcone Volkswagen, Subaru & Saab in downtown Indianapolis.

Falcone said that a couple of years ago, Neel might have been able to get the 12-year-old Jeep she was considering at her $4,000 to $5,000 price point. The 2000 model on the lot, after all, has almost 90,000 miles on it and gets only 16 miles to the gallon.

Its price tag today: $13,900.

"It's unbelievable," Falcone acknowledged. He said the used car market is the strongest it has ever been in his 34 years in business.

....Dealers and automotive analysts say it's the same across the country. A variety of factors, including the nation's weak economic recovery, high gasoline prices and the March 11 earthquake and tsunami in Japan, have converged in recent weeks to send demand for used vehicles skyrocketing and supply plummeting, said Jeremy Anwyl, chief executive of Edmunds.com, which tracks new and used car prices.

Well, those are certainly good reasons.  But remember, when Obama instituted Cash for Clunkers, he deemed that every "gas guzzler" turned in be destroyed, regardless of usablility (has any nation every intentionally destroyed that much capital?).  Imagine if there were an extra 750,000 cars on the market right now.  Regardless of earthquakes, floods, and whatever other excuses MSNBC is making, that much extra inventory on the lot would certainly have a very real downward effect on prices.

Instead, we have folks who want to buy cars that cannot afford to, because the Obama administration wantonly engaged in massive destruction of usable, resellable, American capital.  How's that affecting the economy?

...what Barack Obama has done to the ecoomy.  Literally.

Economic illiteracy, or ideologically-driven centrally planned economics with the intent of reshaping society?  Either way, Barack Obama and the Democrats would up hurting the very people they piously claim to care about the most.

And if I was able to figure this out two years ago, there is no excuse for the "smart economists" of the Obama administration for missing it.  Unless, of course, it was by design - a society without freedom of movement can be much better controlled, after all....


Related:  More fantastic results of the Cash for Clunkers initiative:

A study published after the program by researchers at the University of Delaware concluded that for each vehicle trade, the program had a net cost of approximately $2,000, with total costs outweighing all benefits by $1.4 billion.  Another study by researchers at the University of Michigan found that the program improved the average fuel economy of all vehicles purchased by 0.6 mpg in July 2009 and by 0.7 mpg in August 2009...