Cashing in on Clunkers or Crushing Car Makers?

Congress has approved the “Cash for Clunkers” incentive, potentially doling out one-billion more taxpayer dollars. I can only describe this bill as being pure-Obama in nature. It’s supposed to help restart the economy. It’ll supposedly reduce inventories of older, more polluting used cars. And it may help domestic automakers, of which O’s administration is and/or will be a major stakeholder in two out of three.

In today's Buffalo News, an article announcing Congress' green light of the prgoram also included hopeful talk that this bill could help bankrupt Chrysler and GM start moving new cars onto the streets. And don’t forget the “green” economic “bright side” to this program.

Trouble is, as of the U.S. Department of Energy’s 2009 Fuel Economy Leaders guide, domestic automakers topping any class in fuel economy is rare. Most sedans, two-seaters, and small pickups are dominated by foreign makes. Some are Hondas and Toyotas, while others are Hyundais and Volkswagens.

The only classes where domestic automakers lead are in heavy-duty pickups, SUVs, and cargo vans. No wonder, as these types of vehicles have long been Detroit’s bread and butter. While models like Toyota Tundra and Nissan Titan attempt to fill in the gaps, it seems any die-hard truck lover is going to choose either a Ford, Chevy, or Dodge. Arguing about which of the three is best is a whole different animal.

So it’s funny then: Obama wants to legislate tougher CAFÉ standards and fuel economy requirements. He’s all in favor of Fiat and Chrysler’s marriage, since this will supposedly bring "Euro micro car" technology to the U.S.

Obama’s mandates, if passed, will achieve the following:

• Domestic automakers will be deprived of their highest-profit trucks, SUVs, and heavy-duty vehicles


• The Big Three will be strong-armed into building dinky, fuel efficient cars that most Americans probably won’t take kindly to


• One-billion taxpayer dollars are going to go toward funding a program encouraging cars most people don't want to drive, while destroying the bigger vehicles that have long kept the American automakers alive...

There seems to be a lot of irony in all this. Don’t even get me started on other complications, like who (the taxpayers, of course) is ultimately going to pay for this “Cash for Clunkers” incentive.