The Lie Behind 'Cash for Clunkers'

I read an interesting op-ed piece in the Wall Street Journal on Monday concerning the vaunted 'cash for clunkers' program.

Of course, the big news is that the program is running out of funding. Oh my! Too much success!

Well, not really.

Jeremy Anwyl, CEO of Edmunds.com, the auto valuation website, wrote the editorial, and concluded that all this $1B government program has done is front-end loaded trade-ins which would have naturally occurred anyway.

Thus, in contrast to my 7th grade civic teacher, now Transportation Secretary, Ray LaHood, exclaiming that this was "the stimulus program that has worked better than any other stimulus program that was conceived," we'd better hope other programs don't "work" this well.

In effect, taxpayers have subsidized owners of older cars, most of whom would have bought new cars anyway, to the tune of $1B.

Great. More waste of your and my tax money to incent people do something they had already intended to do.

As Mr. Anwyl notes, despite adding another $2B in funding, it's likely that, as the normal attrition rate of older cars continues, their supply will eventually ebb, and so, too, will the program's "success."

I've wondered about other aspects of the trade-in incentive program.

For example, people who own such old cars typically don't make a lot of money, and are quite likely even financially strapped. As other pundits have speculated, aren't we forcing them to load up on debt by incenting them to trade their old car in for one on which they are highly likely to have a medium-term loan?

Will we be reading about those defaulted car payments, and associated repossessions, in twelve months or so?

Plus, as stimuli go, does anyone expect someone driving an old beater to trade up into a really high-priced, profitable car? These sales are probably not what car assemblers are hoping for as their salvation. I'd be curious to see the statistics on how many replacement vehicles bought under this program include options and extras.

Certainly, it's hard to see this program as a significant remedy for either consumer spending or the auto sector over anything but a few weeks during the summer of this year.

Finishing Term Limits In Congress

Continuing with the explication of my list of 10 flaws in the US Constitution, as enumerated in this post back in June, today's post deals with Congressional term limits.

My second point involved term limits for the judiciary.

We also need to include Congress, so that all three branches of the federal government have term limits to prevent a professional political class from taking root any further than it already has.

In my opinion, the 22nd amendment to the US Constitution, limiting presidents to no more than two full elected terms, represents unfinished business. As this webpage suggests, even that amendment hasn't been entirely safe from repeal, either. I was rather disturbed to see that Barney Frank and Harry Reid have attempted to repeal this important amendment.

The general issue is one of US citizens allowing the formation of a professional, career class of federal politicians who enact laws and accrue power to themselves. I'm currently reading Glenn Beck's "Common Sense," and find his observations and evidence to reinforce my own.

For example, just to put everyone on the same page, members of Congress vest in their own pension scheme far faster than most private workers. Further, that pension plan, and their health care system, are exclusively for Congress, and have better terms than the average voter's plans.

When, exactly, did we allow Congress to create for themselves a lush, fully-funded career, complete with better health care options than the voters for whom they work?

There are so many reasons why permitting professional, career federal office-holders is a bad idea that it's probably easier to deal with the two major arguments for long Congressional service.

The first is the oldest one I can recall hearing. This argument contends that the people of a Congressional District or state deserve the right to choose their own representative, and nobody should be able to deny them that representative. Perhaps nobody else in the district is as competent at representing them as their current, or favored representative.

To that, I would counter that the immense damage to the US economy and individual liberty by permitting a professional Congressional class far outweighs any presumed "right" of any group to have a long-sitting federal legislator. Unlike our founding fathers, or, really, any group prior to the middle of the 20th century, today's American citizens can see how a federal 'ruling class' have simply shredded the Constitution and gathered powers previously unimagined to themselves. Seniority and mutual back-scratching has resulted in ever-higher taxes and federal spending, even in peacetime.

If Congress were not seen as a career option, few would care to use it to line their own and their friends' pockets.

Further, if an entire district of over half a million citizens ( i.e., 300MM Americans divided into 435 equally-populated districts) can't manage to find more than one qualified representative, or an entire state can't find more than two qualified senators, their problems run much deeper than term limits. It simply can't be good for a Republic to be run by essentially the same people for decades at a time.

We've seen, since the 1930s, an inexorable tendency for members of Congress to "do something," in order to have evidence for voters that they "accomplished" things. The idea that preserving domestic policy and program arrangements and merely handling necessary, recurring appropriations and/or foreign policy matters is long gone as a measure of a successful Congressional term.

Now, if the federal budget hasn't grown and new pork hasn't been delivered to constituents, well, your Senator or Congressman has been deficient and must be removed via the next election.

The other argument I can imagine against term limits is one of experience. On this line of reasoning, we are asked to believe that only experienced members of Congress who "know the ropes," "how to get things done in Washington," etc., are truly effective. Oh, and let's not forget seniority.

I think this is actually the more baseless, intellectually dishonest, but convincing argument. For example, it's why no state will ever enact federal office term limits. In a Congress run by seniority, who wants to deliberately put themselves 50th among states seeking aid and advantage?

Your local Representative or state's Senators will try to convince you that their chairmanship of this or that committee or subcommittee, their ties to other 'respected' legislators, and solid core of staffers, allow them to be maximally effective for you, the voter.

Do you really want to throw away all that hard-won, seniority-based advantage for your District or state just by throwing the bum out?

The truth is, the House and Senate have become cozy clubs that answer to themselves and party leaders more than to their voters. The long-serving members have rigged the game so that the new arrivals are disadvantaged if they don't play ball. By going along, new members are tossed attractive bones, i.e., choice committee assignments, some favors for the folks back home, etc. Cross your party's leader or whip at your peril.

Of course, if there were federal office term limits, this would all change immediately.

My own preference is to limit Congressional service to three two-year terms in the House and two six-year terms in the Senate. That means in total, not consecutive. None of this husband-wife alternating terms. Serve eighteen years total among the two chambers and you are finished.

Without cushy pension plans and time to make lucrative connections which allow Congressmen to become wealthy off of unspent campaign funds, various vendor and lobbyist relationships, etc., it's unlikely that so many will eye federal office so fondly.

Besides, if you could gain election to Congress, and, thus have a chance to make a lifelong career of gathering more power to yourself and your colleagues, controlling your own pay and perks, why would you not stay? Why not simply grow insensitive to the voters, as you busy yourself with becoming well-entrenched, more powerful and untouchable?

Why do people like Charlie Rangel get away with tax evasion? Because even the IRS won't take on someone who looks like he'll die in office before he ever loses his power.

This is fairness? We want servants in Washington, not capricious masters.

Hopefullly, with term limits, we'll get truly civic-minded candidates motivated with one or two good ideas to implement within a few terms. People who have a passion to enact a specific change, then move along in life.

With our federal spending and invasion of liberties so engorged beyond anything imagined by our Constitution's Framers, it's time to attack the problem at its root by limited Congressional terms, and, thus, as Glenn Beck notes, the motivation of our Congressional members to vote for what enriches and empowers them in a career in Congress, rather than what is best in the long term for our country and its citizens.

Peggy Noonan On Obama-Care

Peggy Noona wrote a so-so piece in the weekend Wall Street Journal hypothetically returning FDR and Nixon to life to counsel their respective parties. Interesting, entertaining, but not really very practical.

The prior weekend's column, however, had some interesting aspects to it. Written for the 25-26 July edition of the Journal, Noonan began by roundly criticizing Wonderboy's dreadful healthcare press conference earlier that week.

In the second half of the piece, Noonan provided her personal belief as to why she thinks massive government-run healthcare will fail. The first two included reasons not everyone might immediately notice: current freedom of doctors to selectively discount fees, and the aversion by the majority of Americans to paying for abortions with federal healthcare dollars.

But her last contention was, for me, by far the most interesting and, frankly, typically wacked out Noonanspeak.

The former Reagan speechwriter believes that Wonderboy's new healthcare will finally give the upper classes, with their better education, diets, lower smoking rates, and better fitness, all positively correlated, by the way, the right and avenue by which to curb unhealthy behaviors of the lower-class masses. As Noonan wrote,

"Only a generation ago such criticisms would have been considered rude and unacceptable. But they are part of the ugly, chafing price of having the government in something: Suddenly it can make big and very personal demands on you.

Those who live in a way that isn't sufficiently healthy "cost us money" and "drive up premiums." Mr. Obama himself said something like it in his press conference, when he spoke of a person who might not buy health insurance. If he gets hit by a bus, "the rest of us have to pay for it."

Under a national health-care plan, we might be hearing that a lot. You don't exercise, you smoke, you drink, you eat too much, and "the rest of us have to pay for it."

Wake up, Dear. It's already been the case for decades.

Have you never heard of health insurance mandates, Peggy?

See, I don't think these sentiments are at all ugly. And I think people have been voicing them, at least in certain behaviors, for decades.

But what really has had me feeling that way for ages is the fact that I can't buy a tailor-made health insurance policy for my lifestyle and specific needs. I don't need obstetrics or pediatric care. Since I exercise constantly, eat heathily, don't smoke or drink, I want a big, big discount on my policy.

But I can't get one. Instead, I'm carrying the load of a lot of unhealthy, sedentary fatties who are allowed to average-in to my policy class. Not to mention the higher price Americans have paid for steel or cars for years, thanks to the unions in those sectors securing generous, free or cheap healthcare which, of course, made it nearly costless for those blue collar workers to live incredibly unhealthily.

I don't think there's anything wrong with condemnation in the public square of unhealthy lifestyle habits, so long as we are all forced to buy mandate-loaded policies, and carry those with pre-existing conditions at no extra charge.

So, Peggy, you got this one all wrong. It's actually high time we either make criticism of unhealthy living explicit, or free us all to be allowed mandate-free policies.

There is no middle ground.