Thursday, August 6, 2009

Cash For Clunkers Success?

Cash for clunkers is a government program subsidizing the trade-in of a "clunker" for a car that get at least 10mpg mileage than the clunker. It was wildly popular and ran out of money in a week.

I'm not sure how this is different from bailing out the car industry or giving people some stimulus money back or cutting taxes.

I guess the most valuable aspect is that the government is changing the market demand for more fuel efficient cars and therefor influencing the future of the industry. In that sense, it is better than loaning car companies money and stipulating that they make more fuel efficient low emissions cars.

A free marketer might disapprove since the government is meddling, but since the government is not giving money to any individual companies thereby picking winners and losers, there haven't been a lot of objections from raging capitalists.

1 comment:

I, Lynnbot said...

i HATE free marketers! well, i just don't believe in an absolutely free market. there are always influences - cartels with their arbitrary pricing affect the market, gov't incentives pushed for by industry affect the market. it is not free in the first place. and the market is dominated by humans, so it's going to follow human activity. so how could that be foolproof? maybe i'm missing something here.