The Automotive Aftermarket Industry Association has predicted that there will be a backlash to the “Cash for Clunkers” program. I agree, only it will come too late.  “Cash for Clunkers” hurts lower income people, but no one has thought much about that yet – including the lower income people that voted for Obama.
Although I drive a 1994 Suburban, I wasn’t planning on doing the “Cash for Clunkers”. Gas guzzler that the Suburban is, it’s actually been nice for our size family, who are all too big to be sitting in the back seat of small five-seater cars anymore. And I can carry and move things.
But even if I wanted to get a more fuel efficient minivan, I can’t afford to participate in “Cash for Clunkers” program (more officially known as the CAR Allowance Rebate System or the Consumer Assistance to Recycle and Save Act of 2009.)  Â
To participate, a person has to be buying a new car. Sure you get up to $4500 in a rebate, but you still have to have quite a bit of actual money in order to afford a new car. People of lower income don’t have the kind of money. But more importantly, because “Cash for Clunkers” merely replaces your trade-in value, the benefit of the program isn’t as great as many anticipate, and for the American taxpayer, it’s another program that they can’t afford.  As nice as free money (ie: the rebate) sounds, American taxpayers can’t afford to be giving this money away. And low-income people, most especially, can’t afford to be helping pay for any more bailouts.So I just figured I’d hang onto my car for another dozen or more years, until it becomes valuable as an antique, because there won’t be any other cars of this time period around. Most will have been crushed. Maybe we’d fix it up and drive it in the parades!
But here’s when I realized the AAIA is right. Junk yards that crush the CARS program cars aren’t allowed to pull engines or certain other parts before they are crushed. Earlier this month, I made use of a junk yard twice – once for a radiator and once for an engine.  I still need to put in an alternator. Will certain parts for older cars become harder – and more expensive – to get?When all is said and done  - “Cash for Clunkers” benefits New Car Dealerships primarily, by increasing sales, and the upper and middle class possibly, but giving them an extra few hundred dollars.  But it’s not good news at all for lower income people.   We can’t afford a new car, and we won’t be able to continue fixing our older cars at an affordable price, if we can find the parts at all. This isn’t good. In fact, the Obama administration knew they were taking away our options to keep our vehicles running. They want our cars off the road, and they really don’t care how it affects those of us with very little money.  The little guy isn’t a priority. Obama pretended to champion the little guy in order to get their vote, but it’s becoming more and more obvious that special interest – those that have received the bailout money and those industries he is choosing to socialize – are what he really champions. Politics as usual.
I’ll bet many of the people that voted for Obama haven’t even thought of this particular ramification yet. They’re still waiting for him to pay their mortgages and health insurance. The “Cash for Clunkers” program will be all done and over with, with most of the cars crushed, before the little guy realizes that the price of his used part just went up a whole lot.
Lisa blogs at http://whitetrashvote.blogspot.com/
23 users commented in " Cash for Clunkers Hurts Poor People "
Follow-up comment rss or Leave a TrackbackWhat this article says seems true to me. All those parts going to waste.
China will get a boost when we have to buy their cheap knock off and low quality and unsafe replacement parts instead.
Listen to this NPR interview of a JD Powers analyst and then do the math on the cost of the initial $1 billion program divided by the NET sales that JD Powers estimates the scheme created.
http://www.npr.org/templates/story/story.php?storyId=111436526
Okay I will save you the calculator strokes: $1 billion / 40,000 net car sales = $25,000/car
Your Federal Government At Work!
The government does what the people want and if you have been reading recent articles about the cash for clunkers program “americans have spoken with their wallets.” Decisions are going to be made that favor the rich and not the poor and vice versa; someone will always feel like they are being kicked to the curb but that’s politics for you. You said, “Obama pretended to champion the little guy in order to get their vote, but it’s becoming more and more obvious that special interest – those that have received the bailout money and those industries he is choosing to socialize – are what he really champions.” My response to that is what about the health care reform he is proposing? Sounds to me like the rich will be paying for your medical bills, the least you could do is buy an engine for your car…
Only if I allowed the rich to pay my medical bills. (I don’t believe that they would be the only ones subsidizing that care, though)
That argument would work for me if I was interested in the Health Care reform, but I’m not. I think that, as well, is very wrong for our nation.
That’s not to say that I can afford my own health care. I can’t. I’m one of those counted among the uninsured. I’m in that group of people that makes too much for Medicaid, but not enough for health insurance. And that’s not to say that I am completely healthy. I’m not. I was hospitalized just two weeks ago, for example. That bill is totally in my own name.
But I’m not naive enough to believe that this Health Care boon doggle has anything to do with helping lower income people, either. That’s just the sing-song that they are trying to sell. The cut off line for Medicaid is reasonably high. Poor people ARE already covered. Now that Obama’s failed economic decisions have forced me out of our family owned restaurant last week, I might just qualify as well. If I choose to go that way.
But paying my own medical expenses, a little at a time, has worked for much of my life. I would rather continue to do that than have anything to do with Obamacare. Again, I think Obamacare has more to do with helping special interests than it has to do with lower income people. Just look at the Chicago Hospital where Mrs. Obama worked. With her help, they were able to institute patient dumping, reserving that particular hospital’s resources for those that could afford it.
And that’s my response to you…
This program is worse for the poor than you think. Not only do they have to pay for this program for the wealthier to be able to get shiny new cars, but they are losing access to cheap transportation.
Let’s remember the law of supply and demand. As supply goes down, demand goes up and so does price. Since each of these “clunkers” must be destroyed by law (the dealerships are required to pour chemicals into the engine to destroy them before they can get the rebate money) that means that fewer used vehicles will be on the road.
But then hey, the Democrats don’t really care about the poor as long as the Democrats can look sufficiently self righteous about “doing something to help the environment.”
Yes, who cares about the poor? Who cares if all of this perfectly good reliable transportation must be destroyed? Who cares if the cost of used cars rises? The poor don’t deserve to drive anyway!
The poor should walk or take public transportation and they should have to pay (in the form of taxes and inflation) for the ability for the better off to take a load off their feet. Because after all, the Democrats must be able to remain holier than thou about the environment and if they have to eliminate the poor in the process, well, so much the better. (Pandering to the poor is only something Dems do during election speeches).
Oh CKA – looking back at your note – you suggested that if the rich are buying the health care, the least I can do is buy an engine for my car…
Not sure that’s what you meant. You see, we just DID put an engine in the car, without any expense to the government, and we’re just fine with that.
I think you had meant to say that if the rich pay for my medical bills (which I don’t want them to do) then the least I could do is BUY a Brand NEW CAR. (Remember? Obama doesn’t WANT us to put a new engine in… We’d have to go to Canada to find a new engine for the old car…)
Let’s not miss the point of the discussion… 🙂
Amen, Alex. This is what is turning my stomach. Another thing that liberals conveniently forget, (because they don’t have a huge rural voting base), is that there are many low-income people that don’t have access to public transportation, and walking to the store can sometimes mean twenty miles or more. There are probably even libs that won’t believe that’s a real issue if you tell them; they’ll have a “let them eat cake” attitude about it.
They don’t get out in the country much – where their food is raised and pick up trucks are a necessity.
Alot of nonsense from conservatives who never cared about poor people in the first place. Many of the new cars cost less than what dealers are selling old ones for. I personally know of someone living on social security and a small pension that finally got rid of his beater that was draining him a $1200+ a yr just in repairs. Not only is his Cobalt safer,better, and more fuel efficient – he also has a warranty for the next 5 yrs. You rightwingers are nothing but lying sacks of sh*t.
Glad it worked for your friend. But you didn’t need to get nasty. Remember, our president was just the other day trying to show us all how to “agree to disagree.”
I guess you didn’t understand the post;
– Most low income people (like me) can’t afford a new car.
– Most low income people (like me) need to keep using used parts to keep making repairs on their older cars.
– Most lower income people (like me) can not afford to subsidize car purchases for other people.
Lastly, fact is, many people of low income are conservative, especially in rural areas. (Please don’t say anything derogatory about rural residents. Remember – we’re trying to get along and understand each other…wouldn’t want any prejudice against conservatives to get in the way…)
The myth that conservatives don’t care about people of lower income is simply that – a myth.
Longwalks,
Look, if you want to take really really long walks to get a loaf of bread (as Lisa points out, that could mean 20 miles or more) then feel free, but who are you to DEMAND that every one gets a new car?
I love your example. You speak of your “friend” who has given up transportation that only cost him $1200 a year and now has to pay how much? I checked and found that car priced from 12k to 17k. He has gone from 100 a month to two, three or four times that. (I am sure his insurance has increased as well).
If he wants to do that fine, but did you have to take money out of the pockets of poor so he can step on their backs to make this purchase? If he has this much discretionary spending, I would hardly classify him in the “poor” category.
Government spending has been accomplished only through monetary policy. In other words, the government cannot tax people enough to pay for these programs, so they simply borrow it or print it. That affects the value of the dollar. As the dollar goes down, you can buy less with it. The people who this hurts the most are the poor. (And if you think there is no price inflation these days, then you don’t go grocery shopping!)
Remember, the government doesn’t have one dollar. It doesn’t make anything, it doesn’t produce anything. Every dollar it gives to A it takes from B. I was taught in second grade that taking from B to give to me or anyone else was called theft and was wrong. I still believe that principle.
The point is, this program might help the auto makers, it might help the bankers by creating new loans (unless those too default in a few years – but then I guess they don’t have to worry, you and I would just have to pay for those bailouts too), it might help a few people who wanted to buy a new car this year anyway.
But this program will, can, and does, hurt the poor of this country. It also hurts anyone who does not want to buy a new car but is forced through taxation (direct or indirect) to pay for this program.
Finally, as the economy tanks and people return to the days when folks fixed cars and didn’t just throw them in the trash, where will you find replacement engines or other parts? You think things are bad now, just wait.
Good post, Alex
“Cash for Clunkers” is an environmental disaster. Scraping cars years before the end of their useful life is the height of profligate and wasteful consumption. The thousands of pounds of energy-intensive, highly-processed materials and advanced engineering equipment in cars is an enormous investment based on massive inputs of energy, mining, water, labor and materials. It makes no energy, environmental or economic sense to destroy the cars engines and render the investment useless years before the end of their useful life. The premise that buying a new car to get better gas mileage than a scraped car will save energy and be good for the environment is myopic and false when applied to scraped cars that would have had years of useful life. “Cash for Clunkers” is a net energy waster, and a colossal waste of resources.
“Clunkers” is a terrible misnomer. By disabling the engines and scraping perfectly good used cars, the “Cash for Clunkers” program is hurting the used cars industry and the poor or moderate income folks who can only afford used cars. The “Cash for Clunkers” is largely benefitting the haves and hurting the have-nots.
Like a mind, a car is a terrible thing to waste.
Really good point, Tom
Typical government program… cash-for-clunkers is already costing THREE TIMES it’s original estimate. Imagine the DISASTER if these politicians attempt healthcare reform.
This program does nothing to get the real clunkers off the road. Those clunkers are owned by the poor who can barley pay for the gas to get to a job interview much less a new car. Why not allow these people to upgrade their worse clunker to a better clunker. At least then we are helping to get the worst of the worst cars off the road and providing some relief for the poor and not just the wealthy.
Longwalksinparis, it is possible to debate about political matters in a reasonable, respectful way. When you engage in broad-brush generalizations, call people names, and presume to know the motives of others, it only makes you look like a jerk.
Clunkers works, laissez faire doesn’t… unfettered capitalism is the moral hazard… Ayn Ranter$ only love their dollar $igns and not much else.
Longwalks,
Your arguments are long on insults, short on logic or facts. If you just stand there spewing attacks you don’t do anything for your case. Do you have a case? Do you have a counter point?
Sure the clunkers programs works for huge car companies right now, it is most helpful for the loan givers (banksters), but for the REASONS cited above the program is hurtful for the poor.
As far as your attack on unfettered capitalism? Well, we don’t have unfettered capitalism in this country, have never had it and every problem I have seen that people usually attribute to capitalism actually comes from government interference with capitalism so it can help out its friends. That is called crony capitalism and I am very much against that.
This program is an example of crony capitalism.
It seems that you are the one ranting, Longwalks. The rest of us are having a discussion.
I am a person who lives on Social Security disability, I have been extremely Ill and had to take an early retirement which cut my Social Security big time, I only get 676.00 per month and it’s hard enough to pay basic cost of living and to put gas in my old car to get to all my doctors appointments. If I was able to go back to work some day I still would not
be able to afford a new car payment. So this program is not meant for the poor. And by the way I started working when I was 15 I am now 53, so you tell me who this program was suppose to help? Surely not me.
You’re absolutely right that C4c is not good for the poor. Many of the cars being turned in for a voucher are the ones that previously were donated to charity for a tax deduction. Charity car donation centers are seeing a decrease in the number of donations since the C4C program started.
You all have been proven right.
I can hardly find a decent used truck or SUV for what I can afford, which isn’t much since I am a poor student. The price has certainly gone up.
All of these Obamaphiles kept saying how we have so many cars in this country that we can afford to lose a few. No, we can’t. Because people aren’t selling all of those cars at once. I’m suffering now because of these jerks.
It disgusts me.
Bless you, Jared. I pray that you will be able to find a car you can afford.
I am so mad I voted for obama, as a black woman I will never vote for another black person
I am disable person with a disabled child and my rent gets higher every 6 months and my bills and I do not get food stamps. Obama talks about the republicans messing up the country, he has nade the country worst! And he does not know what the hell he is doing, the economy was better when President Bill Clinton was our President! This is not a racist remark because I am black!
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