September 25, 2009

Psst: Cash For Clunkers July-August ‘Success’ Causes Serious September Sales Swoon

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As far as the establishment media is concerned, the Cash For Clunkers program Uncle Sam conducted in July and August was a smashing (excuse the term) success. That’s the case, despite the deliberate destruction of hundreds of thousands of perfectly usable vehicles, late payments to dealers (the USDOT is finally catching up), the program’s failure to give much relief to government bailout beneficiaries General Motors and Chrysler, and less than perfect communications about tax consequences to buyers.

A week ago, there was news indicating that September auto sales will be down drastically, and that most of the blame for the nosedive belongs to Cash for Clunkers. If you haven’t seen any establishment media coverage of this, it’s because there has been very little. A Google News Search on ["september sales" "cash for clunkers"] (typed exactly as indicated) for September 17-25 returned all of 68 items (Google’s indication that there are over 400 is wrong), and a significant number of them are stories in the various cities served by bizjournals.com.

Here is part of Chrissie Thompson’s Automotive News report from September 18 describing how dire things have gotten at dealer showrooms around the U.S.:

September sales rate may be lowest on record
Edmunds’ SAAR of 8.8 million would be lowest in nearly 28 years

September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.

After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once — in December 1981 — with records stretching back to January 1976.

Amid a global recession, U.S. sales fell to 13.2 million units in 2008, from 16.2 million in 2007. The slide continued, with demand ranging from 9.1 million to 9.9 million in the first half of this year.

….. Now that consumers can’t receive $3,500 to $4,500 for trading in gas guzzlers for new vehicles with better fuel efficiency, they aren’t rushing to purchase vehicles, Edmunds.com analysts said.

It will be more than a little interesting to see which manufacturers are hurt the most, and the least, by all of this. It will also be interesting to see how or if the establishment press can still portray the Clunkers program as a success if September really turns out as badly as feared.

Image found at AdWeekMedia.com.

Cross-posted at NewsBusters.org.

Latest Pajamas Media Column (‘Capitalism Works — When It’s Not Corrupted’)

Filed under: Economy,Taxes & Government — Tom @ 10:06 am

capitalism_flyerIt’s here.

It will go up at BizzyBlog on Sunday morning (link won’t work until then) after the blackout expires.

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Left on the cutting-room floor: Space limitations kept me from specifically expounding on how a foundation of Judeo-Christian beliefs undergirds an effective capitalist system that has minimal corruption.

Adam Smith himself clearly understood the paramount importance of an ethical underpinning in society in his Theory of Moral Sentiments.

If society doesn’t have a firm, Biblically-based Jude0-Christian ethic, evil starts filling the void. People like Zeke the Bleak Emanuel tell us that people between the ages of 13 and 40 are more deserving of being saved in pandemic conditions, directly contravening the moral imperatives parents instinctively understand. People like Tom Daschle and President Barack Obama go further with so-called “Comparative Effectiveness” (second item at link) and tell us that the elderly or those with difficult serious illnesses at some point should not have access to the full range of medical treatments and technologies. Utilitarian steps that “save” society money like abortion and state-run medical treatment decision controllers (i.e., deniers) become more accepted.

In everyday life, capitalism without a moral foundation devolves into a short-term “what’s in it for me” enterprise, where the focus moves from figuring out how to serve customers in new and better ways to seeing how to game or rig the system to one’s own personal benefit. We’re seeing that devolution before our very eyes. The biggest enterprises, like GE and GM, become the biggest rent-seekers.

Contrary to conventional wisdom, the three situations described in the column — Democratic Pennsylvania judges conspiring to send kids to detention centers for kickbacks, Enron, and the mortgage-lending debacle — do NOT represent failures of capitalism. They represent human failings all too predictable when people, in the third case heavily aided and abetted by the government, lose their moral and ethical bearings.