What did the clunker program buy us?

Most people think of John Stossel as a television journalist. You know, the guy with the mustache on ABC's 20/20. No doubt that helps pay the bills. However in his spare time Stossel writes about current events from a free market perspective.

Clunker Legislation

The economic illiterates in Washington are so impressed with the "success" of Cash for Clunkers that they're readying Cash for Clunker Appliances. The ludicrous "stimulus" bill gave $300 million to the Department of Energy to provide rebates for 10 types of appliances that have been rated energy efficient.

Before government extends Cash for Clunkers to more products, it might be a good idea to examine the original. The fact that Washington and the buyers who took advantage of Cash for Clunkers are gaga is hardly evidence that it was in the public interest.

It wasn't. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt's teaching in his classic, "Economics in One Lesson".

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." (more)