I decided to post again about Global Warming, not because it is the only thing I think about, but because I came across something today that was related to Global Warming and the environment.
I was watching one of the business shows that come on TV on Saturday morning (it was Cavuto on Business, I believe) and they were discussing the new initiative "cash for clunkers" endorsed by President Obama to give people up to $4500 to trade in their old car or SUV for a vehicle that gets better mileage. Now, there are 2 main criticisms of this idea as 1) it rewards people who purchased gas guzzlers and provides no reward for people who bought Prius's or some other more environmentally friendly car and 2) it entices people that are driving "clunkers" to buy a new car when they cannot afford one and thus, will hurt them financially in the longer term
I would say there are 2 main reasons to support the plan: 1) it will spur demand for automobiles which will help out the car manufacturers, dealers and auto workers 2) it will reduce emissions and also our dependency on fossil fuels.
Now, the bill will only affect someone who is driving a vehicle that gets 18 mpg or worse and that is worth less than $4500. (My wife drives a 2000 Honda Passport and fits both of those criteria). The Passport is an SUV (they don't make them any more) and it gets 18 mpg (according to the website I found). So, if she were to buy a new suv that gets 20 mpg, she would get $3500 and if she were to buy a new suv that gets 23 mpg, she would get the full $4500.
With the economy the way it is, we are not in the market for a new car, but if we were, this is certainly something that we would keep in mind. Buying a new suv that gets 23 mpg instead of 18 mpg would save us some $ on gas (I calculate 145 fewer gallons of gas a year which would save $360 a year based on 12,000 miles/year and $2.50 a gallon). But $4500 vs the $2000 or so the car is worth is a difference of $2500 which would dwarf those gas savings. If 10,000 people did this, that would save a lot of gas (over 1 million gallons a year). Although, I don't know if a suv that gets 23 mpg emits less emissions that an suv that gets 18 mpg, but I figure it must. I guess the main point of the bill must not have been about the environment and global warming unless there is a direct connection there which I'm not sure of.
Any thoughts?
btw, I read the post about "Boys and their Toys" about the new ipod, and I have read articles about it. I'm not going to get one as I don't want to pay the extra $25 a month for a data plan, but it seems like pretty impressive technology to me....
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Cash for clunkers is one conflict of interest that justifies why the government should never have entered into the car business. The government is making laws and passing favors to the automobile industry at the expense of the taxpayers. The money used to finance this program was taken, theoretically by the threat of force, from individuals and in turn redistributed to those who exchange their decisions for the government's desires.
ReplyDeleteIt is the responsibility of an automobile company to spur demand for their product by creating an attractive product. Since the government now has a vested interest in GM, they have a choice either to design an attractive and differentiated product (difficult) or create laws to encourage the purchasing of products(easy). To be fair, the program will benefit all automobile manufacturers, but regardless it is a tool to shore up their interest.