Alan Blinder still likes cash for clunkers, mostly

By Justin Fox | August 4, 2009 | +

For my previous post on the economics of cash for clunkers, I tried to get Alan Blinder’s take—since the whole danged thing was his idea—but didn’t hear back from him on time. Now I’ve just gotten this e-mail from him:

I always thought that cash for clunkers would be an effective stimulus, but it seems to have exceeded expectations. It would be a shame to cut it off here. The original bill was way under-budgeted.

That said, I wasn’t happy with the design details, which pay too little attention to environmental concerns.

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http://curiouscapitalist.blogs.time.com/2009/08/04/the-confused-economics-of-cash-for-clunkers/ What Alan Blinder, Steven Levitt and other economists think about cash for clunkers – The Curious Capitalist – TIME.com

[...] The Curious Capitalist Commentary on the economy, the markets, and business The Curious Capitalist Feed Daily E-mail Updates « PreviousTreasury tries to publicly shame Wells Fargo, Bank of America and Wachovia Next »Alan Blinder still likes cash for clunkers, mostly [...]
Ffred

I agree on the environmental concerns. I was surprised and somewhat dismayed to find out that mpg restrictions are pretty loose. Although, as you pointed out in your previous post, people are tending to buy the more fuel efficiant cars anywar. Cheers to them.
Ffred

that’s “fuel efficient cars anyway” jeesh
geaugailluminati

this may actually do more harm to the environment than good… those new cars aren’t going to just drop out of the sky, fully assembled….and most of the US auto plants are in areas where electricity is by coal generation..
http://philipcrawford.wordpress.com wiscoDude

Has Alan defined what is meant by “effective stimulus”?

1. There was considerable pent up demand for vehicles. CR has many charts.

2. Once the program appeared to be headed for implementation, many people held off on their purchases. (Anecdote, I don’t have the data just yet.)

3. I would assume many of the purchasers simply moved forward their planned purchases. Is this what he means by “effective stimulus”?

If so, I suggest a Cash4Computers program. I’m thinking about purchasing a new laptop and this old one is an energy consumer and slows me down. I’d be more efficient if I had a new one. It’s a win-win-win.

Bah.

In any case, it would be great if people such as Alan would point out the economic waste of programs like these. The profession is so completely rotted.

Some commentators have it right:
http://tauntermedia.com/2009/08/04/clunker/