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The ever-controversial Cash for Clunkers program, which ended this week, has come under attack for a variety of reasons, but I've been a supporter -- it created demand, rather than simply accelerating future demand; it offered some environmental benefits; it put money in people's pockets by dint of saving their gas money (an average of $821 annually); it made it easier for auto dealerships to accept the carefully calibrated GM/Chrysler bankruptcy deals; and it helped prop up the auto industry. And in so doing, we've found out, it helped save some jobs:
One auto analyst called the program a success, if only because his research showed that it was responsible for saving 39,000 jobs that otherwise would have been eliminated."It's really more substantial than we had thought in terms of stimulus," said David Cole, chairman of the Center for Automotive Research. "This is companies putting people back to work."General Motors announced last week that it will reinstate 1,350 workers and add overtime for about 10,000 at three plants, as the automaker replenishes inventory sold during the government program. Honda also said it will increase U.S. production.The other big winners in the program were Asian automakers. Eight of the top 10 new cars purchased through the program came from Honda, Hyundai, Nissan and Toyota, which claimed the top spot with its Corolla. The Corolla, Honda Civic and Ford Focus are manufactured in the United States.(As a side note, I was suspicious of the "Center for Automotive Research," but at least they're up front about their funding sources [PDF], so make your own call about their partiality.) Calculated Risk has a table showing where different states benefited, with my home state, New Hampshire, coming in as the top dollar-per-capita recipient (flinty!). As to why D.C. didn't do very well, it's because there aren't very many car dealerships in the District proper, probably due to high rents for a big car lot and the fact that most of the people who drive in D.C. probably live in the Maryland/Virginia D.C. suburbs anyway.
-- Tim Fernholz
