Posted on 08/12/2009 4:32:20 PM PDT by djsherin
Here at Mises Daily, we often poke fun at left-liberal Democrats for their Keynesian ways. To prove that this is about ideas, not parties, today we'll focus on a recent blog post in which Republican economist Larry Kudlow came out in favor of extending the "cash-for-clunkers" program.
As we'll see, Kudlow's arguments are pure Keynesian nonsense. Sadly, many of today's ostensibly radical, "free-market" economists basically look at the economy in the same way as Paul Krugman. They just have a slight technical disagreement over the best way to prod people to spend money. Only the Austrian approach offers a different paradigm and allows us to see just what is wrong with the "aggregate demand" view of the economy.
(Excerpt) Read more at mises.org ...
1.) Borrow money from China.
2.) Use that money to destroy valuable, usable capital, in America.
Cash for clunkers is insane!
ping
It’s a cute promotional gimmick, but wow how expensive. If they just gave the checks out at random and didn’t bother with clunkers or new cars it would be more efficient at “boosting” the economy.
Increase the price of used cars.
Increase the price of used parts.
Be BAD for the environment, as it is ANTI-RECYCLING!
Will NOT save energy, as it wastes energy to make brand new vehicles and to destroy old vehicles, in such a wasteful manner.
Higher debt AND wealth destruction...
What’s not to love?!
It annoys me that Kudlow continues to believe he is a proponent of the free market.
Besides, it’s simply stupid.
Larry Kudlow—the Charles Nelson Reilly of economics.
Cash-for-clunkers is a primarily an environmental program and I think it has some prospect for success as such.
Conservatives, of course, argue that that C4C fails as an environmental program because the GHG emissions saved with lower MPG vehicles are offset by the increase in emissions that results from vehicle manufacture and destruction. If that’s where it ended, they’d be correct. However, the long term benefit of C4C is that it increases the price of used vehicles and new economy cars, thereby pricing low-income working people out of the car market and forcing them into public transport (where all politically correct Democrats know they belong.) This is perfectly consistent with the statist elitist’s contempt of low-income working people. GHG emissions reduction is only for the little people, you know.
I don’t get what he sees in CFC. I’m tired of this “spending drives the economy” line. Economics consists of looking beyond the immediate and short term effect of a policy, and very few “economists” seem to be doing that.
the supply siders have given up on him a loooong time ago. his monetary policy is also demand side.
In the shorty term it will depress the cost of used vehicles, since the rebates and taxpayers money will suck the life out of sales. You know, why buy used when you can buy new at the same price. In the long term, you may be correct, depending on how successful they are at getting people to steal from the unborn.
It may depress the cost of used vehicles that would otherwise have sold for over $8,000 or so, and if the cars traded in were returned to market, it would depress the cost of all used vehicles. Destroying the vehicles, however, ensures that the cost of heavy vehicles below $5,000 or so will increase (someone who would have spent $3,200 on a pickup will now have to compete with other buyers for a more expensive one).
U.S. retail sales unexpectedly fell 0.1% in July, as soft sales for most types of merchandise offset a boost from the government's cash-for-clunkers subsidy, the Commerce Department reported Thursday.
It was the first decline for seasonally adjusted sales in three months. The report shows that consumer spending is still weak despite attempts by the government to stimulate demand. Sales at most kinds of stores declined in July.
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