Friday, August 21, 2009

Obama's Cash-Guzzler Running on Fumes

While certainly not the biggest boondoggle in federal history, "cash for clunkers" must have broken the record as the fastest taxpayer ripoff on wheels, going from 0 to $3 billion in just a few weeks -- with two thirds of that spent after it was obvious that a massive scam was going on. It used to take years for a federal program to squander that kind of money. But that was life in America B.B. -- Before Barack. Now it can happen in a matter of days.

First $1 billion went flying out the window, even before controls were in place to ensure the program was operating properly. But rather than hit the brakes and ask for directions, and get a handle on what was going on, the president and Congress poured $2 billion more into this high-octane cash-guzzler, effectively putting the pedal to the metal. Now that money's been blown, and the plug has been pulled -- which I read as a belated acknowledgment that the program was a disaster, made worse my reckless spending my the president and Congress.

President Obama is still valiantly trying to put a positive spin on things. During a radio address yesterday, he said C for C had "been successful beyond anybody's imagination. And we're now slightly victims of success because the thing happened so quick, there was so much more demand than anybody expected, that dealers were overwhelmed with applications." Obama called the paperwork backlog "a good-news story" because dealers -- some of whom are pulling out of the program in frustration -- "are seeing sales that they have not seen in years." It just takes time for those conscientious federal workers to process the paperwork "properly," explained the president (though perennial reports of Social Security checks going to dead people aren't a confidence booster).

But I'm not sure the public will buy what the president is selling. He's coming off a little too slick, a little too much the used-car salesman.

If Obama truly believes the program was a smashing success, why pull the plug now, after "only" $3 billion has been spent? Just imagine all the auto showroom traffic Obama could generate, all the additional economic stimulus that would occur, how many auto dealers would be high-fiving, how much cleaner the air around us would be, if Congress appropriated $20 or $30 billion more for the program. If we maintained that level of funding annually, all our problems would be solved -- if clunkernomics really works.

But I think the White House and Congress belatedly came to understand what most level-headed Americans knew intuitively from the start -- that clunkernomics doesn't work. This was nothing but a boondoggle, that accomplished nothing meaningful for the economy or the environment, and will turn out to be an embarrassment to the president when the full story is told. $3 billion was blown in a matter of weeks. Dealers have been dropping out of the program in frustration. A mess has been created that will take months to clean up. Lawsuits could result, as dealers demand the rebates that were promised them but haven't been coming, snared as they are in federal red tape.

Enterprising reporters will uncover all sorts of abuses, by both car-buyers and car-dealers. Any objective cost-benefit analysis would undoubtedly show that the former far outweighed the latter, especially when one adds-in the federal man-hours being expended to process paperwork and issue the checks.

Try as the president may to turn this lemon into lemonade, it's still going to leave a bitter taste in the mouths of most Americans when the complete story of cash for clunkers is written.

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