Dean,

So you are, in effect, saying that C4C hurt a lot of people at the lower end of the income/wealth spectrum, many of the people who buy used cars (disproportionately), right?

I noted this a month ago (http://40yrs.blogspot.com/2009/10/cash-for-clunkers-have-had-long-term.html).

The WSJ had an article on rising used car prices, and I called them out on not explaining how cash for clunkers changes the car market ecology.

Brooks,

yeah, i don't know if I would say a lot, since people don't buy cars very often, but yes, lower income people would be paying more for used cars because of C4C.

This was the first concern that came to my mind when the German governement started the first C4C scheme, which was later adopted by everyone else.

It is amazing that even the many critics of C4C didn't point this out. This goes to show how far removed the political, intellectual and media elites are from the lives and concerns of the average young blue collar guy or gal, who would normally buy the kind of cars that were needlessly destroyed.

That helps to fight deflation, right?

You know what? We could burn houses that are foreclosed. That would really help. I mean, there is a housing glut, right?

I would take a closer look at this before making too much of these numbers. When gas prices spiked, the market for the vehicles that qualified for C4C collapsed. Why would there not be huge increases in the price of a used Suburban when gas prices dropped by half? How do prices compare with two or three years ago?

Cash for clunkers hurt taxpayers, the poor, car repair shops and car donation.

Dean,

Thanks for your answer.

Do you think the media should be faulted for not pointing out this adverse effect on lower income/wealth Americans?

Do you think C4C was, on balance, good policy, bad policy, middling?

Dean,

Sometimes good policy is made, like renting to foreclosed homeowners their old homes, see under
http://money.cnn.com/2009/11/05/real_estate/deed_to_lease/index.htm?postversion=2009110517

Didn't you suggest something along those lines?

Regards,

Peter

PS
> We could burn houses that are foreclosed.

Yes, that would help the homebuilders who helped this crisis to develop.

As suspected, WSJ says not to blame C4C for used car price increase: http://online.wsj.com/article/SB10001424052748703787204574442963304106596.html

sesli sohbet sesli chat Thnx...

I concede I had wondered about this.

Maybe next time around we can set it so the car destroyed has to have been a car of equal or worse gas mileage?

Jonnan