"Cash For Clunkers," Chapter Two

Is anyone really surprised? 

Reports published at the end of August verify that the "Cash for Clunkers" program did more harm than good.  On Monday, Motley Fool commented on the diminished supply, increased demand, and skyrocketing prices in the used car market (emphasis mine):

Last year's $3 billion program to get folks to trade in old cars on new ones turned out to be popular -- and the "clunkers" provision of the program required the destruction of the whopping 690,000 cars that got traded in, even if they were fairly new and nice. AutoNation (NYSE: AN) alone sent 10,000 to the scrapyard.

Not only is the supply of used cars all fouled up, the program also caused a whopping impact on today's market for new cars.  Speedtv reports:

The distortion in U.S. auto sales caused by last year’s Cash for Clunkers program has resulted in some disappointing predictions for this year’s August sales and the industry’s recovery rate.

While I didn't blog specifically about the Cash for Clunkers program, I did poke a little fun at it last year, referring to the need for a "Cash for Crustaceans" program after buying a piece of unexpectedly expensive fish.  But, even though I never mounted the anti-Cash-for-Clunkers soapbox, I can distinctly recall thinking what a bone-headed idea it was to destroy a bunch of perfectly serviceable automobiles.  I still think it was a bone-headed idea that will continue to cause unpleasant after-effects.

So, just call me Madame Moogie, the Not-so-Mysterious Psychic, Predictor of the Obvious.

Maybe blog-buddy Buck should reconsider that Caddy -- the industry could use his support!