Big Government in the Auto Industry, or an Innovative Incentive?

As government continues to meddle with the auto industry, the House overwhelmingly approved a “Cash for Clunkers” bill on Tuesday. The plan is to provide vouchers to individuals trading older, less efficient cars for newer, cleaner vehicles with higher MPG ratings.

Sounds to me like more government intervention, regulation, and tampering with the competitive forces that should be driving the automotive industry. It also sounds like another one of the Obama administration’s $4 billion “clean, green, and restart-the-economic-machine” programs that have the potential to saddle future generations with debt and high taxes.

Or it could be a great incentive and economic booster. Truly, I have mixed feelings on this, but will be eagerly awaiting the outcome.

Perhaps something like this would have been beneficial for me. About six months ago I took advantage of near historic low lease rates being offered by Subaru on ’09 Legacys. I traded in my clunker 1998 Legacy Outback wagon to cover the down payment and upfront costs on the lease. This proposed bill provides a clause stating that the funds could be applied to a purchase or lease, with funds going directly to the participating dealer.

Although it was out of tune and had more wrong with it than I care to know, my 1998 Legacy was only averaging 17 MPG, while the ‘09 consistently gets over 26, with an updated version of the same engine. I should also note this is in mixed driving, but mostly stop-and-go. Proposed legislation in the bill would’ve gotten me an extra $3,500 toward my lease, practically paying it off. I wonder if there’ll be any retrospect clause when Congress is done having its way with this bill...

Older cars turned in under the program will be destroyed, effectively removing less efficient autos from the road. Missing out on this potential program might hurt a little. But if I find out that it could’ve been used to liberate the world from that awful 1998 Outback I used to own, it might be more than I can take. I would love to be the one to put the figurative nail in the casket of that dreadful old car that I foolishly purchased on eBay (a story for another blog post).

Anyway, following is a photo of the car that’s been the subject of my abuses. It’s a perfect eBay car: no rust, major dents, or other flaws, and shiny paint. Photographed nicely, ran like garbage—sold to a sucker...