"But I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers." -Barack Obama
President Obama recently used the aforementioned quote in declaring victory in the debate about his cash for clunkers program after the funding for the program ran out much earlier than expected. AIP's own Matt Margolis recently compared this program to health care reform as he wrote that "Well, "free" health care is sure to be just as attractive an incentive as a $4,500 rebate on a new car, and cash-for-clunkers was supposed to last a few months, not a few days....The government truly is lousy at guessing how the public will react to incentives like this." Yet, even though the program spent its money much quicker than expected, President Obama noted that the program was extremely successful, a conclusion doubted from some on both the left and the right.
Firstly, in regards to Obama's conclusion, one wonders how the Obama administration defines success in this venture. Was success defined by customers wanting to take part in this program and overwhelming the finances allocated for said program to the point where the program had to be shut down much earlier than expected? Or does success come from the consequences of the program itself? A recent blog post from the Heritage Foundation recently noted some of the negative consequences of the program including the fact that the program does not help the environment as much as people had hoped, it hurts charities (in that people who might otherwise donate cars to charities are now profiting from them) and it gets the government even more involved in the automobile industry. Aside from those three conservative arguments against the program, there have also been reports about problems with the program itself. Katharine Q. Seelye, on a New York Times blog, recently wrote that "We spent a couple of days earlier this week following the whole complex program, from dealer to scrap heap, and found twists and turns in it that are making it a nightmare now for everyone involved...Today, dealers are frantically trying to move the old trade-ins to the scrap heap so that they can get reimbursement before the money tap shuts off." Even the Washington Post piped in with an editorial about the cars for clunkers program that noted that "the latest turn of events hardly proves the program a "success," as its proponents now claim. It merely shows that Washington could bribe more people into purchasing new cars than many thought possible."
So at the end of the day, was the cash for clunkers program a success? Obama claims that it was but judging from all of the criticisms above, it seems that the president's rhetoric about this program is unjustifiably enthusiastic. With the blog from the Heritage Foundation criticizing some of the consequences from this program, the New York Times blog post about the hardships that the program is creating and the Washington Post openly disparaging this program, can Obama really call it a great success? It may have provided some short-term support for some in the automobile industry but it has hurt others. (See the New York Times piece linked above for stories about individuals who are hurt by this program). Obama may be satisfied with this program's "success" but many others who have reviewed this program have found major problems with it, a fact that President Obama blatantly ignored in saying that this program "succeeded beyond our expectations and all expectations."