Horace Cooper

With less than 8 days of fan fare and excitement, the Cash for Clunkers program started and appears now to have ended. According to Transportation Secretary Ray LaHood, "If we don't get the $2 billion from the Senate, we would have to suspend the program." The program in question gives consumers up to $4500.00 in rebates if they trade in a car with poor gas mileage. Supporters claim the popularity of the program is evidence of its success. Others aren't so sure. They think it reveals a woeful inability of government bureaucracies to predict and administer economic assistance for the American economy. Originally the program creators predicted the funds would last through November. Since supposedly basic math skills were all that would be required to make projections on the program's timing, how could the program have run out of money in a week?

When surveys say Americans have high levels of skepticism about the ability of Washington to respond to the economy's morass, perhaps the Cash for Clunkers gives some insight into that sentiment. Increasingly, Americans recognize that the economic downturn we are experiencing is greater than any we've faced in more than a generation. Not quite a depression, some economists are now referring to it as the Great Recession. Its impact is powerful and comprehensive. As American households across the nation gear up for the long haul, many are wondering why Washington hasn't gotten the message that a real change in policy direction is needed, particularly when it comes to the American auto industry.

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After spending billions on Chrysler and GM directly, enacting the "Cash for Clunkers" bill, and with little to show for their efforts so far, Washington is undaunted. In addition to talk of extending the clunkers bill, they are pushing for bailouts for the dealers whose hardships they created, as well as promoting "technology" loan assistance to Ford Motor Company - the one remaining member of the Big Three that hasn't already been tainted with federal control via government subsidy.

Notwithstanding the over-regulation and litigation that has made the auto industry particularly vulnerable during this economic downturn, rather than make problems worse with more of the same from Washington, Congress should focus on consumers and competition - forces that actually have the power to turn-around this industry.


Horace Cooper

Horace Cooper is a legal commentator and a Senior Fellow with the Institute for Liberty.