The "cash for clunkers" program is proving all the "big government" haters wrong. It's so popular, in just a few days nearly all the money for the program has been used.
But here's The One Thing: Congratulations, Washington. You've figured out that people like handouts, but that doesn't mean "cash for clunkers" is a success.
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Sure, all the politicians are giddy:
Representative Ed Markley, author of "cash for clunkers," says it's become "one of the most successful stimulus programs of 2009" (that's saying a lot).
And press secretary Robert Gibbs sounded like Joe Isuzu as he told Americans to keep on buying cars all weekend long!
But what really happened here? They had a budget that was supposed to last four months and it lasted just days. So they're cheering this plan because they gave away free money faster than they anticipated?
Great job, guys. Well done. Bravo.
And now, of course, they're expanding this "successful" program. Translation: They are going to give away more free money. And with that, the vicious government circle of life is complete. It keeps going round and round.
And while they tinker with the auto-market, small businesses get screwed.
Local car dealerships suffer because their four-month business plan is in shambles and they are facing uncertainty because (shocker) government already has a backlog of paperwork on the transactions.
Radio/TV stations suffer because scheduled ad-buys go away.
Auto parts recyclers are hit because they're not allowed to take the engines or drive trains (a prime revenue source) from the cars before they are crushed.
And people in need of cheaper cars have fewer options, as a quarter-million working, cheaper, clunkers are destroyed.
Nothing good happens when government tinkers with markets. If actual history was taught in school, we might have learned this lesson by now, instead of continually repeating it.
In 1933, FDR tried to tinker with the nation's agriculture industry — similar to Obama with the auto industry.
The farming industry was struggling, so FDR started the Agricultural Adjustment Administration. His goal was to artificially alter the market. He decided that cotton prices were too darn low. He tried to increase the value of cotton by destroying 10 million acres of cotton. Hey, now it's a rare commodity!
Same thing with pork prices — too darned low. The solution? Slaughter 6 million baby pigs. Obviously people were a little upset — I guess they wanted food or something? I know, what a bunch of whiners.
FDR finally relented. But his solution was the Federal Surplus Relief Corporation. Yes, another government program.
When government tries to solve "problems" with the free market, history shows all that happens is they create more problems. History also shows they try to solve the new problems by creating more programs, which create more problems. And next thing you know we're hearing about how government is trying to solve that "old people" problem with a "cash for cripples" program where you can "turn grandma in for $4,500."
I've seen it a million times before. It's ugly, very ugly.
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