Besides the obvious point Stossel makes about destroying perfectly good assets, I was thinking of other “elephants in the livingroom” aspect of this government program.
First, smart people who buy cars NEVER buy them new – they immediately lose value once driven off the lot. The best way to buy a car is get a used vehicle for much less money with several years of use remaining.
Second, most people take out loans to buy cars – that supposedly was why car dealers were hurting when credit dried up last year. But a big part of our economic trouble is that too many people borrowed too much… so why not start up a government program to encourage more borrowing… pretty wacky stuff.
In essence the government continues to encourage people to make bad economic decisions… sound similar to the way Fannie and Freddie were instructed to make loans to people that couldn’t afford them?
Add to this news that foreign car makers gained the most from C4C… sometimes it’s just plain embarrassing to be an American.
Ed Morrissey of HotAir.com makes some valid arguments against government intervening with private markets:
Why did GM and Chrysler, both owned in part by the same government that launched C4C, do so poorly? In part, they didn’t have cars to sell. Both GM and Chrysler had curtailed their production during their bankruptcies but had worked to have inventory ready for the new sales year. By launching C4C in the middle of the summer, when most dealers are already cutting prices to move inventory off the lot, the administration practically guaranteed that C4C would leave them on the sidelines.