Posted by
Jason Keuter on Monday, August 03, 2009 12:00:00 AM
This is less a result of rushed legislation than simply legislation regarding economic transactions. The whole point of the legislation was dubious to begin with - saving the environment and subsidizing the car industry. Correction! I should have said saving the new car industry.
All of the objectives of the legisaltion were political: car dealers were angry about the arbitrary closing of dealerships by now government owned GM and Chrysler. Boosting their business buys them off - but the check may or may not be in the mail. What we have here is a classic case of "transaction costs" that deter economic activity.
The legislation is also a misguided prayer that the sales of GM and other bail out cars will improve - thus justifying the bail outs. In their heart of hearts the Democrats in Congress and Obama would like nothing more than to make the rebates apply only to GM, but that would simply be too overt a case of cronyism, so all cars are available, so this will more likely than not be a boon to Toyota and Mitsubishi (and Ford) than GM and Chrysler.
Last - the farce of environmentalism: Obama wants car companies producing more fuel efficient cars. Getting gas guzzlers of the road for marginally more efficient cars will not effect the environment - or, if it does, no one will ever know. This is simply a symbolic gesture masquerading as a substantive gesture intended to buy off the environmentalist constituency, and it will work in that regard. My guess is that people who drive gas guzzlers will not opt for solar powered Yugos but instead will buy cars that are marginally more efficient - which again, means anything but a GM or Chrysler model that is simply in the same class as a Toyota, Honda or Ford. We're talking mini-van for mini van.
There are very compelling reasons to separate economics from politics - just as compelling as separating religion. As for the "economics" of the Democratic left, it really is a religion - and insistent folly, contrary to historical fact, that only produces hypocrisy as it only produces the opposite of what it pretends to purport.