Auto Sales Collapse to Levels Not Seen for Almost Thirty Years

Gee, who would have thunk it:

When Congress gave away $3 billion for buyers to trade in their “clunkers” and buy new cars in August, lawmakers thrilled as buyers swamped showrooms to take advantage of the big discounts. “Cash for clunkers has captured the public’s attention . . . (it) has the possibility to truly jumpstart our economy,” said Rep. Candice Miller (R., Mich.). Other, more sober analysts, warned that the clunkers program was only stealing from future sales.

September sales are in, and sobriety can take a bow.

Edmunds.com reports that “September’s light-vehicle sales rate will fall to 8.8 million units . . . the lowest rate in nearly 28 years, tying the worst demand on record. After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once — in December 1981 — with records stretching back to January 1976.”

Huh. By paying people to replace their cars with new ones—but only if they do it in a one-month window—the government exhausted the demand for new cars in the future. Democrats, who claimed that this would "jump-started the auto industry" are idiots. The few economists on board with this broken window fallacy are downright evil.

Not that Republican congressfolks are blameless. Senators Sam Brownback and Susan Collins were instrumental in passing the anti-prosperity "Cash for Clunkers" program in the Senate. Fifty-nine Republican congressmen voted for it in the House.

Congratulations, doofuses. You've put automakers (and autodealers) in a tough spot for the next few months. You've also put middle- and working-class Americans in a tough spot by pulverizing the used car market.

So let's check that score again:

Bad for taxpayers: check.
Bad for businesses: check.
Bad for the poor and middle class: check.

President Obama thinks it was the best program EVAR.

posted by Gabriel Malor at 09:10 AM

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