Clunkermania: Top Good News Economic Story of the Year

This week marked the end of the Cash for Clunkers program. Many have called it one of the best economic stimulus programs ever implemented. Of course the White House has called it "Wildly Successful."

"This is one of the best economic news stories we’ve seen and I’m proud we were able to give consumers a helping hand," said US Transportation Secretary Ray LaHood.

The White House Council of Economic Advisers, released preliminary analysis on the program:

1. Their analysis estimates that the program will boost Q3 economic growth by 0.3-0.4 percentage points because of resultant automobile sales in July and August.

2. The program will sustain the increase in Q4 GDP because auto production will continue in order to replace depleted showroom inventories.

3. Clunkermania will create or save 42,000 jobs in the second half of 2009. It is further expected that those jobs will remain well after the program’s close.

The program, combined with earlier economic stimulus, has second half economic growth coming on strong.

Comments

[Steven Hansen:]

"Clunkermania will create or save 42,000 jobs"

????? provide data please.

Aug 30 05:11 AM

[belseware:]

I'd like to see that jobs data, too. Where? In Japan?

While I'm on a roll:
"Automakers Go on the Small-Car Offensive"
By David Welch, Business Week Online On Friday August 28, 2009, 8:08 am EDT
:
“Americans Don't Like Small Cars
It is hard to make decent money on small cars unless you have a long history of making and selling them, as do the Japanese. U.S. automakers do not…..
:
“Carmakers badly want to believe that Americans like small cars. Eric Noble, president of the CarLab, a consulting firm in Orange, Calif., says several European and Asian carmakers have hired him to do consumer research on small-car demand. When consumers gave them the thumbs-down, the clients asked him to rewrite the questions to see if that would change the result. It didn't."

I regret BW doesn’t have an option for reader comments. Thank goodness SA does. Herewith my beefs (beeves?):

“[lack of] A long history of making and selling [small cars]” is not why U.S. automakers don’t make a profit from making them. It’s simple: The transplants have a lower cost structure. Period. Though the gap has been closing, it’s primarily through hard work by the big 3 and the weak dollar. It’s unlikely this can maintain, and thus Ford—for example—is planning to offer loaded small cars which can be profitable. ..and they have to make small cars to satisfy government mandates.

I’m tired of the liberal media whining that the big 3 just won’t build cars that the people want. That’s BS. They DO. In this article is info from CarLab that makes it clear. Some transplant automakers (who only do small cars) appear to be in denial.

Between "our" government and the media, the CARS program benefitted Japan a great deal.

Aug 30 08:43 AM

[The Good Ne...:]

Steve,

I don't have access to the CEA raw data, but the 42,000 number released by them is referenced in multiple stories including the bloomberg story here:
www.bloomberg.com/apps...

Aug 30 03:05 PM

[a. palmer jr.:]

US automakers, either by choice or chance, build their small cars to self destruct in a very small amount of time. The ones that make it for several years have either had a lot of good maintenance done on it or have had a huge amount of luck. The GM cars which I've owned in the past were plagued with many small things self destructing, switches, emergency brake, check engine light constantly coming on, exhaust systems not held on properly, air conditioning systems leaking, etc. I could understand a few of these getting through inspection but we're talking about thousands! If you want a car that's not constantly in the garage you'll probably have to look to Honda, Toyota, etc.

Aug 30 09:08 PM