Bastiat Surrenders, Goes to Work for GM

In the long history of minor-league sports, no fan has ever planned to go to the ballpark because they heard it was Mini-Bat Night or Bobblehead Night. If the giveaways are limited, people may show up earlier than if there had been no handouts (say, fifteen minutes after the first pitch instead of sixty), but their decision about buying a ticket was un-phased. So rather than serving as a small cost by which overall revenue increases, the prizes amount to a fun bonus for people who were coming to the game regardless.

New numbers on the government’s Largesse for Lemons program proves it was one giant, $3 billion Bobblehead Night for car dealerships.

Consider the numbers via Bloomberg.com’s report:

GM’s September deliveries tumbled 45 percent, while Toyota dropped 13 percent, both worse than analysts had estimated. Ford slid 5.1 percent, and Auburn Hills, Michigan-based Chrysler Group LLC plunged 42 percent.

Honda Motor Co. posted a 20 percent decline, and Nissan Motor Co., which like Honda is based in Tokyo, said sales fell 7.1 percent.

The larger problem, though, is that the C4C program is being heralded as a success, and a model for future government interventionism. Never mind that the program’s biggest beneficiaries were Japanese and Korean carmakers, or that C4C served as a very effective poke in the eyes to the poor by increasing the median cost of used cars, or that the whole scheme was one tragi-comic lesson in Bastiat’s broken window fallacy.

Reason Online web editor Tim Cavanaugh sums it all up:

The evidence was there going in, and now the evidence is there going out: As soon as the government turned off the current, the corpse stopped twitching. But everybody in the lab saw the corpse twitch. So if GM survives, the history will read that while free market extremists objected to the Cash for Clunkers program, even they came around when they saw how successful it was at saving U.S. auto manufacturers.

In the interest of full disclosure, the Guardianmobile is an Aston Martin Lagonda. Red, white, and blue of course.