The CPI rose three tenths of one percent in October and one of the big factors was the rise in used car prices. Used car prices increased 3.4% in October. This is no doubt due to the hundreds of thousands of cars taken off the market and destroyed by the cash for clunkers program. This is good news for those trading in used cars to buy a brand new one, but bad news for those struggling to get basic transportation to get to work.
Source link: http://archive.mises.org/11056/more-cash-for-fewer-clunkers/
More cash for fewer clunkers
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No kidding! I have friends who are having to struggle to keep an old car running, with California Smog regs to boot, because they can’t afford to go out buy a new(used) car.
Big help from Big Government. Right.
On top of that, they can’t get credit because the banks are sitting on their TARP monies until inflation cures their ballance sheets. Big help once again.
No loan approval for a new car. No capital (savings) for a used car. House lost in foreclosure.
SURE the economy is improving. SURE it is. Heck, Wall Street is seeing improvement every day! The recession MUST be over, right?
Just another unintended side-effect of market intervention… Seems to be growing by the day doesn’t it?
You give $4500 rebates for cars, and people will just charge $4500 more for cars. You give $8000 rebates for houses, and people will charge $8000 more for houses. You make health insurance (which is not health “care”) mandatory, and health insurance companies can charge as much as they want (but probably not more than the opportunity cost of prison).
Indeed, that’s why the geniuses of the Cash for Clunkers program went one step further, and destoryed all the used cars traded in. That ensures permanent disruption of the used car market.
And bad news too for the taxpayers who will have to furnish the money for this ‘no-stimulus-for-the-economy’, and for the merchants who would have profit from this taxpayers money.
“(but probably not more than the opportunity cost of prison).”
That’s great!
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