WSJ “Cash for Clubbers” misses the point

26 01 2010

The Wall St Journal opinion piece, “Cash for Clubbers,” misses the point of the Cash for Clunkers tax incentive program. “The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy.”

“Democrats then insist that to pay for these absurdities they have no choice but to raise tax rates on other things—like work and investment—that aren’t politically in vogue.”

Leaving aside the partisanship – I think you could fill in that blank with anybody – I have to play the skeptic and wonder if this is truly an unintended consequence. Ok, specifically golf carts – unintended, yes. But what do you think is the real goal of tweaking the consumer-level tax structure? I would argue that the goal is to shine the apples, not upset the apple card. To generalize, politicians and corporations (same thing now?) have a very short-term vision: next quarter, next bonus period, next election cycle. Only fools and idealists are making a serious push to reconstruct our transportation system.

Press Secretary Gibbs said, “Chairman Waxman announced that the committee had found common ground on a proposal entitled “cash for clunkers,” and the President commended the members for moving forward a plan that will help the American auto industry and provide Americans with cleaner automobiles.”

The goal was to help the American auto industry and provide Americans with cleaner automobiles. This golf cart nonsense actually contributes to that goal. For example, Berline Carts are built under license with Cadillac. (Take a look at the Escalade 07.)

If I were setting the goals, I would want to create a transportation infrastructure such that most consumers do not need automobiles. Install train tracks down the median of every interstate highway. Let every exit have a station with an almost-free car rental and a free bicycle loan for consumers with good credit and safety records. Put tolls on all the highways and let the trains be free. Socialize the cost of high-speed trains and de-socialize the cost of highways. (I now have to class myself with the fools and idealists mentioned above.)

None of my ideas would help the market for automobiles, even EVs. As Chris said, “We all know it was a veiled payout to the auto industry.” Saving the climate was not the Waxman committee’s goal. Switching our car culture to newer, more efficient cars, about as useful as rearranging the deck chairs on the Titanic, was. While it’s not yet clear that our status quo economy has been saved, Cash for Clunkers has had exactly the intended effect.




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