Daily PUMA Column - Commentary by Alessandro Machi

Showing posts with label 000. Show all posts
Showing posts with label 000. Show all posts

Wednesday, August 5, 2009

Putting the Klunk in Cash for Clunkers.

There have been a few complaints against the cash for clunkers program as being just another government bailout boondoggle. One writer calculated that the actual increase in the number of cars that would be sold this quarter would be around 22,000. They then divided that figure by the one billion dollars and determined that the cost per additional car sold was around 40-44,000 dollars per car! Ouch!

I don't think the above calculation takes into account mitigating circumstances such as would sales have really been only 22,000 cars less without the discount? Also, were I a superficial ninny and my friend who was driving a real clunker suddenly shows up in a car nicer than mine, I'm heading to the car lot and I'm going to buy a newer, better car, and WITHOUT the clunker discount!

So it may be too early to predict how many more cars will be sold. Plus, there are a LOT LESS dealerships around these days, so actually gaining 22,000 more car sales could actually work out to a significant percentage increase among the remaining car dealerships.

However, I think there is a more tangible concern to roil over in regards to the cash for clunkers progrm. Some of the clunkers being turned in are simply being replaced by an 09 clunker. Check out this ad,

CLICK ON IMAGE TO ENLARGE
What does purchasing a huge SUV have to do with the cash for clunkers program? You have to really study the ad to see that the bottom car in the ad, the Yukon, has no cash for clunkers discount attached, they just chose to add a similar discount to try and get the super hatchling out the door with the other slightly less clunkery vehicles.

Which brings me to my gripe.
ONLY A 2 MPG INCREASE and a customer can turn in an old super heavy clunker for a new super heavy clunker?
I understand that 2 miles per gallon improvement on a big heavy clunker is percentage wise better than it sounds. However, I would have tied the clunker discount directly to the MPG of the New Car Being purchased, that's what really matters, isn't it? Any new car that gets 27 miles per gallon combined, or over, gets a 2,500 dollar discount. For every additional mile per gallon over 27 that a new car can squeeze out in the miles per gallon category, I would have added an extra 250 dollars discount, up to 40 miles per gallon ceiling on the new car purchase. If you turn in a clunker and buy a car that gets 39 miles per gallon combined, you would get a 5,500 dollar rebate.

The higher the MPG of the car being purchased, the higher the likelihood that that new car won't tear up the streets and make potholes out of the newly minted pavement that has been resurfaced with infrastructure stimulus money, and, perhaps, we stall off making new potholes from bombs in other parts of the world as we seek out new sources of oil.

Lets have some perspective here. Is it really that big of a deal to drive a car that gets really good gas mileage if it means less wars around the globe, AND the government is willing to help you pay for the car? It's just too bad the government had to put the k in klunker and just not go far enough with this program in terms of really promoting higher miles per gallon cars.

I talked about the importance of combining stimulus programs so they end up complementing each other. The more fuel efficient cars on the road, the longer the roads last, ergo infrastructure money going towards roads is an investment that now lasts longer. In my opinion paying people to barely upgrade their miles per gallon on their new car purchase misses the whole point of the cars for clunkers program.

HOW YOU CAN HELP! MAKE A DAILY-PROTEST.com sign and put it where others will see it.
Daily-Protest.com signs can be placed in a storefront window, a bulletin board at work, or a countertop. Raise curiosity and awareness about how Chase Bank is harming a LOT of of their BEST customers by making a Daily-Protest.com sign.

Tuesday, February 3, 2009

Rachel Maddow and Bernie Sanders (Independent) Vermont, let the DailyPUMA cat out of the bag.

Update - April 11, 2016. The reason I do not support Bernie Sanders in 2016 is in the seven years since this article was first written I don't think he ever really came up with anything that would actually help consumers reduce their own debt. Instead Mr. Sanders railed against Wall Street when the more viable solution was to help consumers struggling to get out of debt.   End of Update.

I have predicted for the last two years that the economy was going to tank, I even wrote two websites over two years ago warning of the theft of money from the american consumer by the Banks and Wall Street. Credit-Card-Cap.com and Credit-Protector.com

Both Websites expose financial methods that loaning institutions have used to rob americans of billions upon billions of dollars.

Tonight (February 3rd, 2009), Rachel Maddow had Bernie Sanders on, a Vermont INDEPENDENT congressman who said something of real substance.

Here is the transcript of a crucial part of the Rachel Maddow, Bernie Sanders interview. I personally transcribed it, please link to it if you like (versus just cutting and pasting it) as it took quite a while to transcribe.

Rachel Maddow

If this executive pay cut can be done well, can be done without loopholes and it works, what's next on the agenda? Do you think in terms of making sure that the bailout money that is already committed, because the bailout money is already outflowing, that it should, can be used in a less exploitive, less immoral way?


Senator Bernie Sanders
Well Rachel, this is the problem with this issue, is, it is so big, that nobody can get their hands on it. It is not just 700 billion dollars, as you know the fed has lent out 2.5 trillion dollars. The president is probably going to ask for more top money.

The fed, we think, is going to lend out trillions more. So what we need to do, among many other things, is we need to figure out a way that we do more than get back to where we were a couple of years ago, by making the institutions stable.

If the taxpayers of this country are putting such a huge amount of money into financial institutions, we need financial institutions that are gonna be beholden to the needs of ordinary americans and not go back to where we were... (as in a couple years ago.)

For example, Just one example. Right now, we're bailing out banks which are charging american taxpayers 25 or 30 percent interest rates on their credit cards. Does that make sense to anybody?

We're giving banks money and they're not telling us how their spending it. We're trying to loosen up credit in america, they're not doing it.


Sanders went on to talk about actually prosecuting the richest people on the planet who may have performed misdeeds that have led to the current situation, and wondered if the justice department was up to the task prosecuting those who are culpable.

Now, I have been advocating an interest free paydown of all credit card debt on my WallStreetChange blog. Bernie Sanders has just said the exact same thing I have been saying about credit card debt. Credit Card Interest charges are suffocating the life support out of the economy and it makes no sense to give the banks more money if they cannot pass the savings on to the consumer in any way.

Barack Obama needs to be funding research and completion of photovoltaic plastics which would do two things at the same time. Photovoltaic plastics lighten the weight of all cargo carriers that travel by ground or water, which instantly improves the efficiency of any battery powered systems because of the lighter weight. Plus, the photovoltaic technology imbedded into the plastic means that the cargo carriers are actually rergenerating part of their own energy even as they travel! Because the carrier's weight has been reduced, whatever is regenerated will power the carrier that much farther.

Let the consumer sweat the smaller stuff. The one trillion dollars in credit card debt is producing 250 billion dollars a year in new interest charges. The republicans want a huge tax cut, the democrats want to give money out, those two ideas merge together if the consumer is given a reasonable way to pay down their own debts via zero percent credit card interest rates to those who desire to pay down their debt.

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