It was clear to anybody with a brain that the “Cash for Clunkers” program was going to have consequences that would hurt people. One is that charities, that benefit from tax-deductible used car donations, would be hurt because people stood to gain much more by trading the cars in for new ones. Another is that poor people would find it more expensive to buy low-end used cars, because many of them have been taken off the market by the program. The whole point of the program was to change people’s behavior! Of course some people will be made worse off by upsetting what had been mutually beneficial arrangements.
What’s amazing to me is this sort of denial of the possibility of significant unintended consequences:
White House spokeswoman Jen Psaki says the program, which got a $2 billion boost Friday, will have a “negligible” effect on charities. Psaki says the Car Allowance Rebate System (CARS) was created to provide a “timely, temporary and targeted” economic stimulus and was not intended to divert vehicles from charities.
They didn’t intend it, so it will be negligible.
I think it’s a great representation of a major problem with these central planners, and those who support them. They consistently ignore the negative effects of their disruptions. They only look at the good effects that they intend, and choose to ignore the possibility that they might be doing significant harm. This magical, free lunch, thinking can be heard in almost every Obama
speech (e.g., millions of jobs created or saved, green economy, health care cost savings…). People are starting to realize that these things have real costs.
Not a moment too soon.
It was cheap to signal support for Candidate Obama. It’s costly to live under the policies of President Obama.
I’m glad the honeymoon is over.