I learned a lot working on the cars of my youth. Through experiences, some coached by my Dad, I became a pretty fair diagnoser and mechanic parts replacer. I worked on them through the 80′s model years as things started getting more complicated. By model years of the mid 90′s there was hardly anything I could get at without highly specialized tools, arms that had no less than 4 joints or an MBA in autos. I realized that the job had gotten more complicated than what I could focus on or had time for so I turned it over to the professionals.
This morning it’s being reported that CARS, Car Allowance Rebate System or the “Cash for clunkers program” has likely run out of money and will be shut down.
Didn’t the CARS program just get launched? Yes it did!
The program launched July 25th and was expected to last until November 1st. It appears that the money has been used so fast that what was supposed to last 90+ days, won’t last 9 days! In typical government response, rather than saying “oops, we screwed up” they say:
“assess the situation facing what is obviously an incredibly popular program. Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored.”
In other words, “we screwed up and are looking for a way to put lipstick on this pig!”
So what can we learn from CARS?
First, the government has no ability to guage, estimate and appropriately fund, even a simple program like CARS. They had $1 billion slated for this program to support the sale of 250,000 cars. There are 23,000 auto dealers. That means that each car dealership was alloted the average of 11 cars to be sold under this program. With $4,500 going out for each vehicle does it even pass the smell test that it would take longer than 3 months for the average dealer to sell 11 vehicles under this program? Actually, I’m surprised the program has lasted 6 days with all of the advertising and pre notice their was on this program.
Second, the government really doesn’t know if they are out of money or not. They know that about 25,000 cars have been sold under this program, they are estimating the remainder. The estimation is required because there are:
large backlogs in the processing of the deals in the government system.
This is incredible! how difficult is it to track these sales? Beyond name, address, vin of the vehicle you traded in and the one you bought and verification of the qualifying vehicles (another story to be told as the list changed daily), how much is required?
Finally, the solution, as with all government programs is not to say “we screwed up.” The solution being proposed is to throw even more money at the government screw up:
Lawmakers said they would try to find additional funding for the program, which under the legislation could grow to $4 billion for the funding of up to 1 million new car sales.
The government can’t successfully administer a program like CARS but continue to insist that they can run the entire medical industry.
The government can’t manage a budget of $1 billion but claim to be able to manage a budget that is at least 16% of our entire economy.
Finally, the government can’t develop a demand curve for a few vehicles, missing it by a factor of multiple X, but assuredly tell us that they know that they will only spend $1.6 Trillion extra to take over all of health care…Yeah right!
I learned through my experiences, that there is a time for amatures to step aside and let the professionals handle the job. During this recess we need to be telling our Congressional amatures to step aside and medical professionals handle their job!