CASH FOR CLUNKERS AND FUZZY "OBAMATH"

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Make no mistake about it, "Cash for Clunkers" is merely another scheme to disguise sending more bailout cash (that we don't have) to Detroit (and worse yet, to a host of predatory foreign automakers that we've got absolutely no reason to be subsidizing). It's merely bailout cash that's been laundered through a non-market-based "consumer" transaction.

Ford Motor Company (F) apparently favors it out of the hope that the general public is either too greedy or too stupid to figure out that "Cash for Clunkers" is a scheme to transfer more borrowed money to the automakers.

Ford's misguided war on vintage collector cars through its support of "Cash for Clunkers" is thus equivalent to sticking its grubby corporate hand in the same public trough as Chrysler and General Motors. But even better for Ford's bailout aspirations, "Cash for Clunkers" is basically free money. The only people who will ever have to pay for it are our children and grandchildren, the legion of automobile restorers, racers, and hot rodders who will be forced to pay higher prices for auto parts and project vehicles, and the scores of aftermarket automotive businesses that will be devastated.

The German front of the Greeniac War Against Collector Cars has generated massive costs and questionable benefits for the automakers (including Ford) who have received the "bailout" cash from the German government. BusinessWeek reported that:

Retailers, for example, have complained bitterly that the program sucks spending from other categories. German retail sales fell 1.5% in March—the third monthly decline in a row—a decline that retail industry groups blame partly on incentives to buy cars rather than other goods.

The rebate also is expensive. Nominally it will cost $6.6 billion if Germans take full advantage of the program. The real cost is harder to figure. Increased sales will boost sales tax revenues, and the state will avoid the cost of unemployment benefits for workers who might have lost their jobs. On the negative side of the balance sheet, the program will kill jobs in other parts of the economy, for example auto repair shops or used-car dealers. A study by the Halle Economic Institute, a major think tank, estimates that the net burden on the German government budget will be $3.5 billion.

[A]nother problem is that much of the money—75%, according to the Halle study—will go to people who would have bought cars anyway. And a large chunk of German taxpayer dollars will flow to manufacturers outside the country.

Moreover, the fuzzy bailout math used by the Obama Administration and the wild-spending Democrats running Congress is coming under increasing scrutiny. For example, The Wall Street Journal's Evan Newmark reported the following corrected accounting of the bailout money to be spent to "save" Chrysler for FIAT:

Take the $12.8 billion in taxpayer funds that have already been extended. Add the $1.5 billion lent to Chrysler Financial. Add, say, $2 billion in DOE “alternative” fuel loans. (It actually could be as much as $6 billion). Tack on the cost of Chrysler’s pro-rata piece of the “cash for clunkers” program, say $200 million.

Presto! Taxpayers will be putting up at least $16.5 billion for the Chrysler bailout. That isn’t even close to Obama’s magical $6 billion.

So go ahead, chalk up another victory for the opacity of politics over the openness of good government. It isn’t its first win in the Obama presidency. And it won’t be its last.

Newmark is correct that "Cash for Clunkers" receipts should be accounted for as bailout cash. That's what it is.

Ford has benefitted from avoiding the stigma of bailout cash. However, Ford's anti-vintage-automobile shilling for "Cash for Clunkers" is merely a ruse to siddle up to the public trough and root for its "fair share" of federal deficit spending.

If "Cash for Clunkers" passes and becomes law, potential customers ought to hold it against Ford, just as some auto buyers now hold taking bailout money against General Motors and Chrysler.