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Thursday, August 6, 2009

Cash for Clunkers

I was at a dinner party last night and the subject of the popular Cash for Clunkers" came up. A sure fire subsidy for the car manufacturers, the program has instantly boosted sales for the moribund auto industry and has allowed people to trade in their less energy efficient car for a brand new one while enjoying up to $4500 from the government for a down payment.

One of the guests at the party was a technician who works in a local auto shop. He was quite animated in his opposition to the program, primarily because of the waste. You see, when a new car buyer brings in his clunker for trade, the dealership is instructed to drain the oil out of the car, then pour a silica (sand) product into the engine and run it until it quits, effectively "euthanizing" the car. The car is then crushed and sold for scrap.

Not only does this program, in many cases, eliminate a perfectly good car from the marketplace, it also eliminates the opportunity to recycle parts from the car, which of course includes a motor (which might run cleaner than one that it could replace) doors, side panels, alternators, bumpers, radiators, mirrors, wheels, gas tanks, trunk lids, chassis, etc. The waste, he said, is appalling and to label this project as "green" is simply a lie.

Many industries are being given subsidies these days: banks, investment houses, the auto industry and yes, even the real estate industry, with the current $8000 tax credit. If the real estate tax credit program was run in the same manner as "Cash for Clunkers", they would be bulldozing a "clunker" (old?) house with no salvage allowed for every subsidized home sold. That wouldn't be right, and "Cash for Clunkers" isn't right either, especially from a "green" perspective.

What do you think?

1 comment:

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