Both the Senate and the House of Representatives are seeking to pass “Cash for Clunkers” legislation that would have three primary objectives: increase car sales, improve the environment, and stimulate the economy. The bill would provide consumers with a voucher (up to $4,500) to purchase a new vehicle to completely scrap the old one. The Associated Press gives a good summary of the House and Senate versions. Although the bill passed today in the House, cash for clunkers is full of problems and unintended consequences:
Today, the Senate could pass a Food and Drug Administration bill that would grant the agency new authority to regulate tobacco products. Slipped into that bill is a newly introduced amendment that would, for one year, attempt to boost car sales and reduce carbon dioxide emissions: Sens. Debbie Stabenow, D-Mich., and Sam Brownback, R-Kan., introduced an amendment Tuesday that would set up a program that allows consumers with older, less fuel efficient vehicles to trade in their “clunker” for a voucher worth up to $4,500 toward the purchase of a …
Time for practice. Time to pile into the…Toyota Prius? Maybe the Yaris. Or surely the Smart Car will do. Those are three of eleven cars that meet President Obama’s new emissions standards that include “nothing larger than a midsize sedan, even when you include hybrids.” We’ve pointed out how bad of an idea this is. Megan McCardle summarizes what the new emission standards will do: • It will raise the prices of cars, and make them less safe • It will reduce our carbon emissions, but not by as much …
Government mandates, preferences and subsidies don’t work. Here’s another example. When gas prices hit record levels over the summer, companies were furiously pumping out oil to meet surging global demand. As the economy took a turn for the worse and demand slowed, there was a noticeable lag as companies continued to supply oil at a high rate, bringing the price down even further. A similar phenomenon is happening with hybrid car sales. Wes Brown, a partner at Los Angeles-based market research firm Iceology, told the Los Angeles Times:
