I am going to put on my journalism hat for a moment (it still looks brand new, like it was never worn). I will try to not use words like communism and socialism and I will NOT mention how Pelosi and Obama are destroying the country we love. Here goes:
Cash for clunkers is picking up speed and the politicians are trying to refill the coffers. On the surface, this seems like a boon for dealerships across the nation. Certainly money is moving around, and that can't hurt, but this is not addressing the problems at the dealership level. Car Dealers often lose money selling new cars. Believe it or not, new cars are the loss leader that open the door for profits in parts, service, and reselling of quality trades. With the proliferation of the Internet, car dealers are competing for new car sales at or sometimes below invoice prices (take the aluminum foil off your head - the invoice is real and the dealers are not lying. Most car dealers are honest and they are our neighbors and friends).
So what's in it for the dealerships? They get some profit in the parts and service for the new car but that doesn't happen for years (unless you buy a British car - oops - not supposed to be biased as a journalist - this is hard). They do not receive any re-sellable trades since they are all getting crushed, so there is no bump in used car sales. The luxury cars are not selling because people who are driving a car that is worth more dead than alive are not buying Lexi (is that plural for Lexus?). Many of my green transportation Examiner.com colleagues have admitted that there is not a substantial green benefit from this program. Here is just one example. Apparently the only people 
benefiting from this program are the manufacturers; specifically the cheaper cars. Cash for Clunkers is helping GM, Chrysler, Ford, Hyundai, Honda, Toyota, Mazda, Nissan, Volkswagen, Mitsubishi, and the other manufacturers of inexpensive vehicles. The real truth of the matter is that car dealers do not love the program. It requires a lot of forms and paperwork. The money is difficult to get and takes time. The manufacturers, both foreign and domestic are the only ones benefiting from the program in any real way. Essentially, we are creating paperwork for dealers so that we can provide bailout money for Toyota, Honda, and Ford. I can't think of a job created on the local level by this program, but perhaps we are a little closer to saving 535 jobs in Washington DC. It is good for senators to appear to be creating jobs and saving the environment.
I'm taking off the hat. If congress really wanted to help they would stop implementing all of this feel good crap that goes against capitalism and start lowering the tax burden on small businesses. The day that taxes are lowered is the day that small businesses begin to hire people. People with jobs buy cars and trade in quality used cars. Dealerships make profit on the used cars and hire more people to service and sell them. It is a wonderful circle of employment and profit that feeds itself.
Max Power - www.MaxwellPower.com
SLOWER TRAFFIC KEEP RIGHT
Comments
Dear Max Powers. Maybe you should put on your economist hat and do a little analysis prior to putting on your ill-fitting journalist hat. Let's think about how a bill like this would come to pass. First, car manufacturers lobby to support it. Bills affecting an industry that is one of the most highly-represented by lobbies in the notional government don't come to pass without that lobby chiming in. This means that manufacturers believe it will help them sell new cars. Now let's follow that logic to its conclusion. If you are a dealer selling Chrysler cars, and Chrysler is filing for bankruptcy and closing almost 2000 dealerships nationwide, you are out of a job. But if Chrysler, the manufacturer, can avoid bankruptcy protection through this program, it can keep your dealership open. That means you might still have your job. Yes, dealerships must create paperwork. But at least it isn't forcing dealerships to fill out pink slips for all their employees, which seems to be the alternative.
Economist, did you write this for Joe Biden? “People, when I say that, look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?” he said. “The answer is yes.”
Dealerships cannot make up a losses through volume. I think you left your blinker on. - Max
Economist, what exactly is a notional government? is that a govermnent without a notion on how to be effective? or just a government who wastes billions of dollars on ridiculous programs that will never work...hmmm
Cash for Clunkers should be renamed Cash for Cornballs..
Let's replace it with a food drive..
Cash for Canned Goods...
CNN just announced Obama's 3 new stimulus programs:
Cash for Candles, Cash for Canines & Cash for Cantaloupes
writer your a jackass
You wrote "writer your a jackass" (see below). I assume you meant You are a jackass. I also assume by "writer" that you meant me. Thank you for your feedback. A comment like yours is similar to flipping someone off (giving them the bird). When you include typos, it is like using you are (or "you're") using your index finger instead of your middle finger. You just confuse all of us and look foolish. Please subscribe to my articles. Regards, -MAX
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