The "cash for clunkers" program, which offers $3,500 to $4,500 to buyers trading in older cars for newer, more fuel-efficient models, is a turning point in the government's plan to bailout the economy. The success of the program -- which ran out of $1 billion in funds after only one week -- led to it gaining approval from the House of Representatives for another $2 billion, a decision that now awaits approval from the Senate.
What makes "cash for clunkers" unique is that it will become a multi-billion dollar bailout of a favored industry with the enthusiastic support of Congress. The program creates none of the anger seen by giving money directly to, say, financial services or auto companies. Congress has wised up, and is now handing money to voters to accomplish what otherwise would have made for a messy public display. It's scary to think that the only thing learned in Washington, D.C., since Lehman Brothers went under is that bailouts should indirectly go to manufacturing companies, because the government can subsidize voters' purchases.