SPIN METER: $3 billion buys not-so-green vehicles

USA Today has an interesting follow up story on the Cash for Clunkers program. The Department of Transportation has been extolling the success of the program but for some reason won't share the data behind those claims so that they can be verified.

By BRETT J. BLACKLEDGE, Associated Press Writer

WASHINGTON – Transportation Secretary Ray LaHood, the nation's top car salesman in recent weeks, has cited the Obama administration's best-seller list of mostly smaller, fuel-saving cars like the Ford Focus to describe the success of the Cash for Clunkers rebate program.

But what LaHood and other administration officials usually don't mention is that some trucks and sport-utility vehicles that get less than 20 miles per gallon, like the Ford F-150 truck and one version of the Cadillac SRX Crossover, also are being purchased with the new government subsidies. Both are bulky vehicles weighing more than 6,000 pounds when loaded that boast at least 248 horsepower.

Just how many consumers used the federal rebates to buy these larger, not-so-green vehicles is unclear. (more)

Clunkers program could drive used car prices up

Call it basic economics - the law of supply and demand. Or call it politics 101 - the law of unintended, but glaringly obvious, consequences. Either way, the implementation problems and adverse effects of the relatively small Cash for Clunkers program might raise some doubts about the wisdom of having Congress involved in something a complex as Health Care Reform.

By Chris Woodyard, USA TODAY

Hundreds of thousands of "clunkers" headed for scrappers may cause already rising prices for used cars to head even higher, dealers and market analysts warn.

The popular cash-for-clunkers program, extended by Congress last week with $2 billion more in federal incentives, requires that all the old fuel guzzlers traded in are scrapped — not resold. That means up to 750,000 vehicles will never find their way into the hands of another owner. Many are at the end of their useful lives, but others, with years of life left in them, normally would be resold.

"Those are the cars that lower-income families need," says Geoff Smartt, owner of Smartt Cars in Caldwell, Idaho. (more)

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'Beach party' rally for bill at NH State House

File this under strange but true. USA Today is reporting that a coalition of environmental groups is holding a beach party at the NH State House today. Somehow the reporter missed the fact that the NH State House does not actually have a beach. Or that NH's U.S. Senators, the focus of the event, do not have offices at the State House. And somehow there is no mention of the carbon footprint of a beach party in opposition to climate change.

CONCORD, N.H.—Environmental activists who advocate strong federal action to tackle climate change are planning to hold a "beach party" in front of New Hampshire's State House to demand a comprehensive clean energy jobs bill.

The gathering by 1Sky, the Sierra Club and other groups is scheduled to start at noon Monday. The environmentalists are asking for the support of New Hampshire Sens. Jeanne Shaheen and Judd Gregg to help pass a clean energy jobs bill through the Senate this fall. (more)

Congress Junks Clunkers Program

USA Today reports that the feds are suspending the newly launched "Cash for Clunkers" program:

Automakers have ordered millions of dollars in television ads. Dealers had the hot dogs, balloons and full-page Sunday ads in the newspapers ready to pounce on sales opportunities. And it is all in vain: the "Cash for Clunkers" program is on hold.

This would have been the first full weekend for the program. It was only last Monday that Transportation Secretary Ray LaHood officially kicked it off. Lots of momentum will be lost from the suspension, confirmed moments ago by sources.

The problem had troubles right from the start. While customers rushed to dealers with their worst-looking vehicles, dealers were trying to navigate 135 pages of rules and lots of red tape. The program will almost certainly begin again after a break -- but it's yet to be seen if the momentum can be regained. (more)

Local coverage in the Concord Monitor and Fosters Daily Democrat.

Congress handed out free money for people who were trading in their cars. People respond to incentives. This extremely short-term blip in auto sales will be absorbed over the next few months, when customers who would have been trading in their old cars aren't coming in. Is that short-term blip worth $1 billion? Sure, if you're raising campaign funds from the auto industry.

We have also lost the value of hundreds of thousands of functional cars that must be scrapped rather than remain on the road. Such destruction hurts our economy. Under Congress's logic, we should start tearing down houses to boost the housing market, burning wheat fields to pump up agriculture, and lighting fires in your closet to help J.C. Penney. Congress is not best suited to decide which cars should be on the road, and which should be in the junkyard. Yet they are taking a billion dollars from our future in order to enforce their preferences.