Motormouth Online

Few of us understand the financial crisis we faced near the end of last year. Only glimpses of the potential total worldwide financial meltdown were known as the outgoing Bush administration rushed through emergency bailouts through congress. Make no mistake about it; this was an embarrassing moment for the outgoing Republican administration and congress. Many had grown weary of this administration "crying wolf," as they had when they manufactured fear of Iraq. Yet just as we know that Saddam Hussein was not responsible for 9-11 and that fear over weapons of mass destruction was unfounded, we now know that the economic sky was indeed falling and the wolf was really at our financial doors. Mere hours existed between action and total worldwide financial collapse. To say that this was the most severe economic crisis since the great depression of the 1920's is not an overstatement.

It is right not to focus on the past as we try to build the future, but we cannot hide the truth that this crisis was a result of the former Republican administration. Neither can we overlook the fact that the Democratic majorities in the House and Senate were complicit, negligent and co-partners in creating this disaster. Wherever the blame is placed the only one who cannot be blamed for our economic woes is the current President Barrack Obama. In office less than nine months, speculation of his failure to right the ship might be fair, but blame for the crisis is not. I understand politics - maybe a little too well. It is one thing to predict failure, but it is quite another to work actively for failure. I'll be the first to say that I'm not sold on all of the stimulus spending. I share concerns about increasing our debt. I'm outraged by corporate pay to CEO's responsible for much of our problems.

Yet we must give credit where credit is due. One program has been an undeniable success. Cash for Clunkers, while fraught with complications has worked as planned. To say different, is to keep ones head in the sand ignoring facts and statistics. Only the most partisan hack continues to attack this program. These voices are rapidly being silenced because auto dealers, a traditionally reliable and powerful Republican grass roots constituency, like the program. Local dealers have the ear of every Representative, Senator and local political official, so while there have been problems it has certainly stimulated auto sales.. Cash for Clunkers alone cannot save the auto industry but it has given a tremendous boost to this struggling economic segment.

Many people miss the fact this program has provided traffic and interest in buying across the board. A renewed optimism and increased consumer confidence may be the best part of this stimulus bill.

As of Monday August 10, 2009 C.A.R.S. has over $1.15 billion dollars worth of applications submitted. The new problem is that dealers are out of cars.

• Top 10 new vehicles purchased

1. Toyota Corolla

2. Ford Focus

3. Honda Civic

4. Toyota Prius

5. Toyota Camry

6. Hyundai Elantra

7. Ford Escape

8. Dodge Caliber

9. Honda Fit

10. Chevrolet Cobalt

• Top 5 manufacturers of purchases

1. General Motors: 18.7%

2. Toyota: 17.9%

3. Ford: 16.0%

4. Honda: 11.6%

5. Chrysler: 10.6%

• Top 10 trade-ins

1. Ford Explorer (4wd)

2. Ford F-150 (2wd)

3. Jeep Grand Cherokee (4wd)

4. Jeep Cherokee (4wd)

5. Dodge Caravan/Grand Caravan (2wd)

6. Ford Explorer (2wd)

7. Chevrolet Blazer (4wd)

8. Ford F-150 (4wd)

9. Chevrolet C1500 (2wd)

10. Ford Windstar (fwd)

• The government says the program has exceeded expectations in removing gas-guzzling vehicles from the road.

Average mpg of purchases: 25.3

Average mpg of trade-ins: 15.8

• Top 5 states by vouchers requested:

1. Michigan: $44.4 million

2. California: $39.9 million

3. Ohio: $37.7 million

4. Texas: $35.0 million

5. Illinois: $33.7 million

C.A.R.S. aka "cash for clunkers," finally created a buzz among auto buyers. The success is that they burned through a billion dollars in less than a week. Did the government actually get this stimulus package right?

Well yes, but not without typical foibles for any program rushed through the halls of Congress.

Before we get to the obstacles, let's look at the goals. The first goal was to provide economic stimulus to an American industry deep in crisis. Cars sales are down by over one third. Two of the "Big Three" required a hundred billion dollars of taxpayer money just to survive a hasty bankruptcy, leaving stockholders and debtors holding the bag. Thousands of shattered lives, unemployed in their middle age created a ripple throughout associated industries. This failure of one of the last vestige of American manufacturing has been catastrophic to the economy.

But the same legislators who were so free to fund semi-criminally negligent corporate enterprises required much more to stimulate individual consumers. After giving a hundred billion dollars directly to corporate fat cats, sixteen billion was proposed to initially fund the C.A.R.S. program. This program was then gutted by three quarters to only four billion. Finally, a mere one billion dollars was approved along with very high expectations. In addition to the goal of stimulating economic activity, an additional goal of removing gas-guzzling, air polluting older vehicles, seemed like a good idea. Replacing these vehicles with more efficient, environmentally cleaner cars would stimulate the economy and produce true "trickle-up" job creation.

The obstacles were great, fraught with opportunities for waste and fraud. The program was rushed, with over 136 pages of published rules for dealer compliance . Dealers had to apply to be certified, allowing direct access to computers and bank accounts for compliance and electronic fund transfers. No government agency was equipped for individual transactions, so Citigroup was tapped to administer funds. Over thirty pages of documents had to be scanned and transmitted for approval of each individual deal. Citigroup computers crashed under the onslaught of demands. Dealers were required to verify that clunkers could never return to the road. A solution of sodium silicate must destroy the engine of each "clunker" before transportation to certified recyclers. Determining the amount of the rebate requires strict adherences to published EPA Mileage estimates for both the clunker as well as the new vehicle.

Yet in spite of these obstacles, there remains a pent up demand for new cars. The success of the CARS program was surprising. In just three days, consumers turned in over a quarter million clunkers for new fuel-efficient cars. An emergency extension of two billion dollars is making its way through the halls of Congress. Still far from the sixteen billion dollars requested or even the four billion dollars initially approved, the value of this program is undeniable.

Just a few years ago, we produced and sold almost 17 million vehicles in the United States. After the last two years of steady decline, we will be lucky to hit 10 million this year. People want and need new cars, but many are reluctant to enter into a five-year finance contract for a replacement vehicle when they are afraid their job will end this year. What we need is optimism. Consumer confidence depends on a belief that the economy will recover.

Frankly, I'm getting tired of political obstructionists and their corporate media mouthpieces. It is one thing to be the loyal opposition and provide a check and balance for one party rule. Yet it is another to want and work for failure. Recently a poll revealed that over half of self-identified Republicans expressed doubts that President Barrack Obama was even an American! Issues like this, work to divide and stall progress. It is not only useless, it is in direct opposition to the interests of the United States. Texas Governor Perry recently even spoke of his state's possible succession from the Union. It's time for patriotism, not bad mouthing our government. If there is any time we must get behind our President, it is now. I am as skeptical of government as any, but we must realize that we have a government of the people, for the people and by the people. Being optimistic that government can play a role to help us solve problems is still patriotic. There are too many people more concerned about military might rather than economic might. The possibility of any foreign power doing real military damage to the United States is virtually nil. However, our economic collapse and subjection by foreign powers is much more realistic. It's time to embrace recovery.

So does "Cash for Clunkers Work? I believe the answer is a qualified, yes but we need more.