Austan Goolsbee recognizes that there is a lot he doesn’t know. Yet this lack of knowledge doesn’t stop him — and many others — from making policy recommendations and pushing for spending programs that will cost taxpayers billions. Take Cash for Clunkers, for instance. Politicoreports:
Former Obama administration economic adviser Austan Goolsbee said Thursday that if given a second chance he would not have backed the Cash for Clunkers program or the home buyer tax credit passed in 2009 to stave off further economic distress.
“Because we didn’t know if [economic recovery was] going to be short or long,” the Obama administration tried measures to address both scenarios, Goolsbee explained on MSNBC’s “Morning Joe.”
Yep, he didn’t know. However, it’s not as if there weren’t a lot of people who predicted that it wouldn’t work. The result was a cost to taxpayers of $24,000 per car sold. Edmunds.com did the math:
Edmunds.com, the premier resource for online automotive information, has determined that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.
Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as CARS, but Edmunds.com analysts calculated that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway, regardless of the existence of the program.
Ironically, the average transaction price for a new vehicle in August 2009 was only $26,915 minus an average cash rebate of $1,667.
So I wouldn’t give Goolsbee a second chance, especially considering the other policies (such as ARRA) he pushed for during his time in government that failed to deliver on the promises made to taxpayers.
Ideally, evidence like this should prevent lawmakers from going down that road in the future. But I won’t be holding my breath. Instead, I will post this hilarious and yet wise video by my colleague Rob Raffety that predicted that Cash for Clunkers would be a total scam:
Only in government can people do this bad, admit they don't know what they are doing, and maintain the full support of their boss. I mean, if the Son part of Johnson and Son Plumbing was this inept, the Johnson part would let him go.
Cash for Clunkers was a boondoggle that continues to "pay dividends" to owners of small used car businesses and the working poor, people who rely on the availability of older model cars and trucks with higher mileage that are still very road-worthy.. Certain models, such as older SUVs like the Ford Explorer, and Jeep Cherokee, always in high demand on the used car market (especially in the North), have become scarce which has led to a predictable spike in cost that prices out most buyers, and the small used car dealers who sold them. The " C4C" program was a benefit to middle-class car buyers who were probably in the market for a newer car anyway. The limited window of opportunity spurred many of them to move quickly which accounted for the sales spike that heartened new car dealers, and which the administration crowed about.. Many older, but still good running vehicles were sent to the junkyard that still had real value to businesses and consumers. They have not been replaced.
How ironic that the Captcha for this comment is a plug (pun intended) for the Chevrolet Volt, a heavily-subsidized electric vehicle produced by Government Motors - two taxpayer funded boondoggles in one.
>> The result was a cost to taxpayers of $24,000 per car sold. <<
It is actually worse than that.
"Cash-for-clunkers" was supposed to be a "two-fer" of a different kind. In addition to the economic "stimulus" that would be provided by inducing a few people to buy cars a few months earlier than they might have otherwise, the program was supposed to help save Mother Earth by getting older, more polluting cars off the road. The requirement was that every "clunker" trade in be scrapped, rather than being sold as used.
The result was that used car dealers lost volume business, while the price of used cars went UP as supplies dwindled. So the people most in need of cheap transportation were priced out of the market, and a sector of the economy that actually does a little better in hard times, when new cars become luxury items, was knocked down. Heckuva way to stimulate the economy, guys.
Cash for Clunkers also had another effect on the used car market, a more subtle one, but real to people in the business, in that it stigmatized all older vehicles-no matter the condition-as clunkers.
When you're one of the folks for whom "taking the car" means Jeeves pulling up in the limo or choosing between the Benz or Bimmer in the garage, Cash for Clunkers made perfect sense. For all the rest of us saps who are wondering how to afford a second car or keep our own hundred-thousand-milers on the road for just a little while longer, it was a classic, economically painful nod to the "haves" to the detriment of the "have nots."
Some people bought free golf carts - completely paid for by the government. The laws were written and passed without being vetted by the opposition party.
Generally speaking, I am a moderate supporter of stimulus if it is executed early and before businesses have a chance to shrink and become profitable in a shrunken economy. Obama's stimulus was a payoff to supporters - I saw little if any evidence that it was anything else. It was money thrown down a toliet.
One little-known feature of the Cash for Clunkers program was that the "clunker" you turned in had to be wrecked in such a way as to make the parts on the car unusable. If you are a poor or lower middle class person with an older car, thanks to the government there are now fewer used parts to repair your car with.
Obviously, this is not a concern for the crowd that Obama, Pelosi, Reid, et al sip chardonay and nibble brie with. But it has raised to cost of driving for people who are forced to drive older cars.
Only in government can people do this bad, admit they don't know what they are doing, and maintain the full support of their boss. I mean, if the Son part of Johnson and Son Plumbing was this inept, the Johnson part would let him go.
Reply to this commentLinkReport AbuseCash for Clunkers was a boondoggle that continues to "pay dividends" to owners of small used car businesses and the working poor, people who rely on the availability of older model cars and trucks with higher mileage that are still very road-worthy.. Certain models, such as older SUVs like the Ford Explorer, and Jeep Cherokee, always in high demand on the used car market (especially in the North), have become scarce which has led to a predictable spike in cost that prices out most buyers, and the small used car dealers who sold them. The " C4C" program was a benefit to middle-class car buyers who were probably in the market for a newer car anyway. The limited window of opportunity spurred many of them to move quickly which accounted for the sales spike that heartened new car dealers, and which the administration crowed about.. Many older, but still good running vehicles were sent to the junkyard that still had real value to businesses and consumers. They have not been replaced.
Reply to this commentLinkReport AbuseHow ironic that the Captcha for this comment is a plug (pun intended) for the Chevrolet Volt, a heavily-subsidized electric vehicle produced by Government Motors - two taxpayer funded boondoggles in one.
>> The result was a cost to taxpayers of $24,000 per car sold. <<
It is actually worse than that.
"Cash-for-clunkers" was supposed to be a "two-fer" of a different kind. In addition to the economic "stimulus" that would be provided by inducing a few people to buy cars a few months earlier than they might have otherwise, the program was supposed to help save Mother Earth by getting older, more polluting cars off the road. The requirement was that every "clunker" trade in be scrapped, rather than being sold as used.
The result was that used car dealers lost volume business, while the price of used cars went UP as supplies dwindled. So the people most in need of cheap transportation were priced out of the market, and a sector of the economy that actually does a little better in hard times, when new cars become luxury items, was knocked down. Heckuva way to stimulate the economy, guys.
Reply to this commentLinkReport AbuseCash for Clunkers also had another effect on the used car market, a more subtle one, but real to people in the business, in that it stigmatized all older vehicles-no matter the condition-as clunkers.
Reply to this commentLinkReport AbuseWhen you're one of the folks for whom "taking the car" means Jeeves pulling up in the limo or choosing between the Benz or Bimmer in the garage, Cash for Clunkers made perfect sense. For all the rest of us saps who are wondering how to afford a second car or keep our own hundred-thousand-milers on the road for just a little while longer, it was a classic, economically painful nod to the "haves" to the detriment of the "have nots."
Reply to this commentLinkReport AbuseSome people bought free golf carts - completely paid for by the government. The laws were written and passed without being vetted by the opposition party.
Reply to this commentLinkReport AbuseGenerally speaking, I am a moderate supporter of stimulus if it is executed early and before businesses have a chance to shrink and become profitable in a shrunken economy. Obama's stimulus was a payoff to supporters - I saw little if any evidence that it was anything else. It was money thrown down a toliet.
Stimulus's are always nothing more than payoffs to supporters.
Reply to this commentLinkReport AbuseAnd they have never worked.
One little-known feature of the Cash for Clunkers program was that the "clunker" you turned in had to be wrecked in such a way as to make the parts on the car unusable. If you are a poor or lower middle class person with an older car, thanks to the government there are now fewer used parts to repair your car with.
Obviously, this is not a concern for the crowd that Obama, Pelosi, Reid, et al sip chardonay and nibble brie with. But it has raised to cost of driving for people who are forced to drive older cars.
Reply to this commentLinkReport Abuse