Cash for Clunkers - Another Wonderful Government Program

I mentioned in an earlier post that the Federal Government’s ‘Cash for Clunkers’ program would do nothing more than pull future sales into August. September auto sales were released today – and the results shouldn’t surprise us – sales for GM and Chrysler were down significantly.

This is what happens time and again – when Government tries to influence private markets. There never seems to be any serious analysis of the long term effects of these actions – only short sighted objectives. Did this program increase car sales in August? Yes. Did the increase in August sales come at the expense of September/October/November sales? Yes. So – this wonderful program simply pulled future sales into August – and it only cost us $3 billion dollars of debt. By the way – we now learn that the $4,500 credit will be taxed as income. Beautiful.

I’ll say it again – would you want our current leaders running your company? No? Then why do we continue to vote them into political office?

It’s time for some good people to step up and lead this nation. We’ve been watching from the sidelines for too long.

jg – October 1, 2009
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OCTOBER 1, 2009, 2:17 P.M. ET

GM's Sales Slide 45%; Chrysler's Fall 42%

By JOHN KELL

Wall St. Journal

General Motors Co. said its September sales plunged 45% from a year earlier and Chrysler's fell 42%, while Ford Motor Co. saw a much more modest drop of 5.1%. All three were hurt by the industry's weakness after the expiration of the U.S. government's "cash-for-clunkers" program.

GM, the largest U.S. auto maker, said it sold 156,673 cars and light trucks in September. It said that figure represents a 36% decline from the prior month.

GM's sales chief, Mark LaNeve, said "the fourth quarter looks brighter and our year-over-year comparisons should look more favorable."

Chrysler Group LLC said its September U.S. sales fell 42% from a year earlier, totaling 62,197. It said, however, that its U.S. market share rose from August 2009 and that it had 56 days of vehicle inventory at the end of September, down 64% from a year earlier.

Other auto makers will report sales later Thursday.

Industrywide, car sales surged in late July and most of August while the program was in effect, giving certain new-car buyers up to $4,500 in rebates if they traded in a gas-guzzler.

Analysts believe the rush to buy a car under the program siphoned sales from September and possibly later in the year, leading to projections of sharp year-over-year declines for the industry.