Cash For Clunkers: Good for car sales, bad for the environment

The Cash For Clunkers program has been pitched to taxpayers with a dual premise: prop up car sales (because we clearly haven't done enough to help the auto industry) and improve the environment.

The program has been a resounding success as far as car sales go. But Harvard economist Edward L. Glaser says that Cash For Clunkers could actually be bad for the environment. He explains that position in an absolutely incredible op-ed piece for The Boston Globewith a brilliant point: "One side effect of the program is that new car owners will surely find it more appealing to drive in their snazzy new cars. A better way to reduce carbon emissions is to make driving more, not less, expensive. . . The cash-for-clunkers policy seems based on the mistaken view that the number of miles traveled is independent of the price or pleasure of driving. I call this the "lump of travel fallacy,'' which is one of a family of lumpy errors that all assume things will stay fixed when they won't."

Add to the "new car" increase in driving the increase that will come from getting more miles per gallon, and it's easy to see how all the carbon savings will be washed up by increased driving. And don't forget: Energy will also be used to junk the old cars and build the new ones.

Of course, this logical breakthrough doesn't really change anything because Cash For Clunkers was never really about helping the environment. If it had been, greater increases in efficiency would have been required. The green-friendly argument was a Trojan Horse used to take more money from taxpayers and hand it to the auto industry without inciting a mass of bailout-burnout angst.

The worst part is that the United States government is now, thanks to powerful lobbying pressure, pouring billions into the auto industry to buy cars from the companies we bailed out -- and the Ponzi scheme is complete. I wonder how much GM and Chrysler executives will get in bonuses for this miraculous increase in sales?

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