Sunday 2 August 2009

Presenting the Broken Car Fallacy [update 2]

During the Great Depression the US Government slaughtered and buried thousands of hogs, and burnt millions of acres of grain.

You’d have to ask the the geniuses in charge of Roosevelt’s New Deal  just what the hell they thought they were doing, but the only visible effect was less food, and more hungry people.

But we know better than that now, you say.  They wouldn’t destroy things now in the hope that it would bring about economic recovery – we know way better now.  Oh really?  Take a look at America’s $1 billion Cash for Clunkers programme, just voted another $2 billion to take decent roadworthy cars off the road.

Tim Blair calls it cold-blooded engine murder carried out on behalf of the US government:

NB: Here’s the Broken Window Fallacy, for those who need to know.

UPDATE 1: Mish  comments on the wastage: Free Money Runs Out, Congress Authorizes More.

UPDATE 2: Cash For Clunker Policy Is Crackpot Economics says the Wall Street Journal.

10 comments:

LGM said...

And guess who gets hurt the most?

Poor working stiffs.

The guys who can't buy a new car whatever the price. The guys who rely on the second-hand spare parts aftermarket.

In NZ you can't escape this sort of nonsense either. Try importing a used import that is older than 5 years from o/seas. This policy (introduced some 18 months ago to "protect the environment) has already resulted in significant job losses and a deterioration of the car stock presently on NZ roads.

LGM

Elle in California said...

All the local news coverage show well-to-do people exchanging well maintained "clunkers" that would otherwise be kept if not for the $4500 credit. One couple talked about how they purchased a Lexus, another couple discussed their stupid Prius. Although the dealers are mandated to destroy the vehicles, they rightfully fear the government won't be able to reimburse as promised. Some dealers have opted to keep the trade-ins on the lots. There's so much more BS to write but it makes me too mad. It pisses me off to no end. Not that it's a good program in the first place, but it makes it all the worse that well-to-do people are taking advantage. Rat bastards.

hooligan said...

The rooting of that motor is a fucking disgrace. What on earth has the world come to?

LGM said...

Hooligan

As an engine builder, it certainly annoyed me to see that done. For a start the Oldsmobile they destroyed is likely to be a car that would have been worth collecting since Oldsmobiles are not built any longer and won't be in future- ever.

What will occur is that the cost of remaining old cars will rise dramatically. Getting parts will become much more expensive. You won't be able to get second hand bits so easily or as cheaply as now ever again. Go to the dealer and buy your spares at full rip-off cost. Not so many can afford that (for example, a cylinder head from Pick-a-Part costs NZ$146 but the same part from a dealer is well over $2,000- that's enough to buy the whole car second hand AND repair it AND run it for a few months, assuming you can get the spares...).

I wonder how the conventional wrecking yards (the ones that would dismantle cars and sell the useable spares) are going to survive with their bread and butter drying up.

---


Elle

Can you write more about what you have found out? It would be intereteing to hear about it.

LGM

LGM said...

Hooligan

BTW, that engine was a quad-cam V-8 of four litres. It was of aluminium and had four valves per cylinder. A slightly larger capacity version has been used in some Cadillacs. In other words, this was a current state of the art engine and not a clunker...

LGM

Anonymous said...

the only visible effect was less food, and m or hungry people



So lets' be clear: it had some positive effect then!

Peter Cresswell said...

Anonymous 2:02, please give a name to your rantings so we can properly ridicule them.

Since your comments are now so frequent, and so frequently absurd, it's time to give a name to your opinions.

Tauranga Rich Retiree said...

Don't bother with Anonymous 2:02 PC, because he/she is new to blog commenting or I shall I say, an illiterate in using a computer, even a simple task of putting a tag-name into the comment is hard to grasp. I think that Anonymous 2:02 is a senile making posts from a rest-home, where they've all being taught of how to use the internet.

twr said...

"In other words, this was a current state of the art engine and not a clunker..."

Not that I support this bloody silly idea, but that engine isn't all that flash. 186kw and 353nm when brand new, after 14 years and 240,000 miles, it's a bit of an old nail.

LGM said...

TWR


Sure it's old, but that layout is the current state of the art for a road-going V-8 (arguably the LS series engine from GM is better). It's a very refined engine and that would have been a nice car to drive.

Would a Euro engine of similar output still be operating AOK after that mileage? In my experience it wouldn't be running very well at all, not unless it had been regularly serviced from new. Euro and Jap engines of reasonable output require care and attention. They are expensive to maintain. On the other hand the US engines are designed conservatively. Spare parts are cheap to buy. They are designed to keep going even when neglected. Usually they do.

When driving across the USA recently I came to understand why US cars are designed as they are. In comparison Euro stuff, dollar for dollar is not such good value. Most Jap is throw away (although Honda sets an amazingly high standard for tolerance stack in their engines).

I don't support the crushing idea either. It stops people getting cheap transport or keeping their second hand cars on the road economically.

BTW I gave up buying new cars some time ago. Cars got heavier and less reliable (more tinny gizmos), their steering got numb, ride quality was reduced... Don't even start on styling! Most new cars are horrible (OK there are a few exceptions). Obama's rules will likely make them worse in future.

LGM