AIP Blog

The Real Cost of Cash For Clunkers

Matt Margolis — Sat, 31 Oct 2009 15:47:00 GMT

So, how much longer will the Obama administration call the Cash For Clunkers program a success?

Back in September I posted about an assessment of the program, which basically confirmed anything someone with basic understanding of economics should have been able to figure out before the program began.

A new report this week gives us an interesting analysis in terms of how many new car sales the program actually generated.

A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.

Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.

Of course, it doesn't necessarily matter when or if these consumers planned to buy a new vehicle or not, that's still nearly 700,000 shouldering a huge, new debt in teh middle of a bad economy. But, that 125,000 number is important in another context... Let's consider what the government spent to create new car sales that othervise would not have happened.

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation. "There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most."

So, $24,000 for each new car put on the road. That's more than the MSRP on my new car with no additional features. So, one could look at it as though in order get 125,000 new cars on the road, the government (read: the taxpayers) had to buy 125,000 cars.

Is this something to be proud of? Are we expecting the government to subsidize car purchases just because it gets cars on the road and out of dealer lots? Where does it end if the Obama administration thinks they are seeing evidence that the only way to generate economic growth is to subsidize? They are already patting themselves on their backs over the Q3 GDP number... just what do you think they'll justify doing next?

And who do you think is going to pay for it?

Poll of the Week: Is our country in "a negative mood"?

John Hanlon — Fri, 30 Oct 2009 11:00:00 GMT

Next week, there are going to be major gubernatorial elections in New Jersey and Virginia. Many political observers will look at these races and will try to understand how their results foreshadow what the national mood will be in the midterm elections next year. However, even before the election, one can get a sense of where the national mood might be heading by the results of a recent Wall Street Journal/ NBC News poll that was released earlier this week.

The article about that poll noted that "The survey found a country in a decidedly negative mood, nearly a year after the election of President Barack Obama." The article also noted that "For the first time during the Obama presidency, a majority of Americans sees the country as being on the wrong track." In recent weeks and months, many people have been disappointed by the policies of the 44th President as the president pushes forward on his agenda so the "wrong track" result is not completely surprising. For instance, one main item on Obama's agenda this year is his health care plan which, as the WSJ article noted, "continues to face a plurality of opposition -- 42% say it is a bad idea, against 38% who say it is a good idea." This poll was conducted late last week and early this week so it reflects people's opinions about the subject before the recent news stories about Senator Reid's support for the public option and the release of the Nancy Pelosi-backed health care plan. This poll, though, does show that after more than nine months in office, the mood of the nation is clearly getting more pessimistic about the future. Those feelings reflect poorly on the 44th president of the United States who often spoke on the campaign trail last year about the importance of "hope" and optimism.

Next week will be a major week for the president as voters in two states elect their Governors. Even if Obama's party wins both races, a highly unlikely scenerio considering how Obama's candidate of choice is polling in Virginia, the results will not be able to overshadow how many people have are feeling pessimistic about the future. The WSJ / NBC news poll shows the growing frustrations of many Americans, frustrations that will likely continue in the weeks and months ahead as Obama tries to push forward on his top priorities, including health care, much to the disapproval of many Americans.

If You Can Dodge a Wrench, You Can Dodge an Ethics Investigation! Maybe.

Jimmie Bise — Fri, 30 Oct 2009 08:45:00 GMT

As if things weren't bad enough for House Democrats, what with the defections from Obamacare and the growing pressure on Speaker Pelosi to investigate Charlie Rangel's tax inconsistencies, Now, it looks like the Mother of All Ethics investigations is coming and, this time, the House leadership might not be able to turn it aside.

Nearly half the members of a powerful House subcommittee in control of Pentagon spending are under scrutiny by ethics investigators in Congress, who have trained their lens on the relationships between seven members and an influential lobbying firm founded by a former Capitol Hill aide.

The investigations by two separate ethics offices include an examination of the powerful subcommittee chairman, John P. Murtha (D-Pa.), as well as others who helped steer federal funds to clients of the PMA Group. The lawmakers received campaign contributions from the firm and its clients. A document obtained by The Washington Post shows that the members under scrutiny also include Peter J. Visclosky (D-Ind.), James P. Moran Jr. (D-Va.), Norm Dicks (D-Wash.), Marcy Kaptur (D-Ohio) , C.W. Bill Young (R-Fla.) and Todd Tiahrt (R-Kan.).

This investigation has been a long time coming. Murtha, Visclosky, Moran were connected to the criminal investigation of the PMA Group back in February, when the story first got widespread news coverage. Since then, we've learned that the Ethics Committee was investigating members' connections with the group, and especially the potential of trading pork projects for campaign donations. Murtha has successfully applied the Five Ds of Dodgeball all year to escape serious media scrutiny, but it looks like he may just need Patches O'Houlihan to dodge this one.

I can only hope that if there is such a thing as karma, it bites down so hard on Murtha that not even the Jaws of Life animated by the spirit of Steve Irwin, Crocodile Hunter can break its grip.

Morning Conservative Reading List - October 30, 2009

Karen Untereker — Fri, 30 Oct 2009 03:26:00 GMT

Enjoy these conservative articles and blog posts from around the web:

Charles Krauthammer considers President Obama's blame game in Afghanistan.
Larry Kudlow demands we fight back against tax hiking Democrats.
Megan McArdle wonders if GDP growth means we're okay.
Thomas Sowell wants our President to earn our respect.
Victor Davis Hanson sees President Obama's pattern of "voting present" continue with immigration reform.
Keith Hennessey updates his projections on a health care bill passing this year.
Peggy Noonan doesn't think our leaders notice how real Americans are feeling.

Have an idea for tomorrow’s must-read list? Send it to me via Twitter (@unterekless) or post a comment below!

Now, more hatchet, less scalpel

Patrick Ishmael — Thu, 29 Oct 2009 17:15:00 GMT

When I blogged about Gov. Jay Nixon's nearly half-a-billion dollars in budget cuts back in June, I wrote that

[a]lthough deeper cuts in government waste are always preferred, the Governor's reasonably modest cut backs are more than welcome.

Almost half a year on, it looks like those cuts are getting a bit less modest.

Gov. Jay Nixon cut an additional $204 million from Missouri's budget Wednesday and eliminated nearly 700 jobs in attempt to offset a continued decline in state tax revenues….

"These restrictions have become necessary due to declining state revenues caused by the ongoing national economic downturn," Nixon said at a Capitol news conference.

The latest round of cutbacks raises the total eliminated by Nixon to $634 million out of $23.7 billion approved by lawmakers for state operations and capital improvements during the current fiscal year. About 2,300 full- and part-time state employee positions now have been eliminated, either by the Nixon or legislators.

The full list of cuts is here.

Every cut to a budget has a consequence, both on state employees whose hours are curtailed or eliminated and on Missourians who may have come to expect or depend on a state-provided service. The newest round of cuts will hit many departments, meaning that like the first round of budget cuts, the second round is designed to spread the cost-savings across the budget so as not to completely decimate any single state service. While most services will continue, many state agencies will have do with fewer resources and, consequently, narrow their scope.

It’s a difficult and painful process, particularly in the midst of a severe recession. Yet there is little doubt that it is a necessary one. The governor made the right decision to continue making cuts, and he has indicated more cuts may be on the way in the coming months. In these leaner times, it makes sense that Missouri should have a leaner government. Let’s hope, though, that a lean, limited, and efficient government is the end objective of our political class whatever the economic environment, and not just an objective when the money runs out.

The Senate Split: Senators make their feelings clear about health care reform

John Hanlon — Thu, 29 Oct 2009 11:00:00 GMT

Now that the full Senate is close to having a debate about major health care reform, Senators now seem to be making their preferences undeniably clear about certain parts of such a plan. This week, for instance, Senate Majority Leader Harry Reid went public with his preference for bringing a government option to the floor of the Senate and Senator Joe Lieberman went public with his opposition to that government option. Yesterday, adding to the debate, the unelected Senator from Illinois made his feelings about a public option clear also and those feelings are likely to displease moderates in the Senate.

According to ABC news, "First Roland Burris became the first Senator to say he wouldn't vote for a health reform bill that didn't include a public option. Now, according to the Chicago Sun-Times, Burris's vote may be in question even on the compromise public option." That article was aptly entitled "Could Roland Burris Block Reid's Health Care Bill?" The answer to that inquiry is simple: yes, Burris can block it if he is set to be the 60th vote during an integral part of the debate. When those on the left, like Burris, decided to push for massive liberal health care reform that did not address some of the key concerns of moderates and members on the right, they alienated themselves from those groups. Now, those liberals are left with a finite number of members who will support their plans and they are also left with major disagreements with moderates like Lieberman.

Even if Burris went along with a bill with a limited public option in it, there are still a lot of Senators on the left who have not agreed to support that. Politico.com recently had a piece about the tough votes that Senator Reid is trying to get on board with his plans for massive health care reform. Five of the main Senators mentioned in that article are from Reid's own party, one of them (Lieberman) was the vice presidential nominee from that party nine years ago and the last one is a moderate from Maine who voted for a major health care reform bill during an important committee vote a few weeks ago. Senator Reid is fighting an uphill battle here and as more Senators become clearer about where they stand, Reid is facing more and more obstacles from within his own caucus.

New York Exodus

Matt Margolis — Thu, 29 Oct 2009 02:53:00 GMT

It was reported this week that from 2000-2008 New York lost more population than any other state. According to the report from the Empire Center for New York State Policy, New York experienced "a net domestic migration outflow of over 1.5 million, or 8 percent of its population at the start of the decade."

The question that needs to be answered is "Why?"

Well, it doesn't take that much to answer that question... All you have to do is ask someone who lives here what's wrong with it. But, I might as well show you what those involved in the study found.

Wendell Cox, an Illinois-based researcher who led the study, said New York, particularly in the New York City area, had seen home prices over the last decade greatly outpace incomes compared to other states. Also, New York is among the highest taxed states in the country, he said.

But he said it also has to do with people moving to warm-weather states at a greater rate.

"The issues of cost and taxation are likely to be driving issues," he said. "But no matter what you do, I don’t anticipate you’ll grow as fast as Arizona."

Eariler this year a Siena Poll found that 21% of New York residents would consider moving out of New York (either as quickly as possible or unless things improve), and another study found New York to be at the bottom of the fifty states when ranked for personal and economic liberty.

Things don't seem to be improving in the Empire State either. A new bottle tax on water goes into effect on Halloween, and the legislature is trying to work out legislation mandating that all car owners must get new, more expensive license plate next year. So you tell me, why are people leaving? Is it really a tough thing to answer?

Morning Conservative Reading List - October 28, 2009

Karen Untereker — Wed, 28 Oct 2009 12:01:00 GMT

Enjoy these conservative articles and blog posts from around the web:

Representative Paul Ryan delivers a powerful statement on health care reform.
Charles Krauthammer calls President Obama "average."
*** Morris details Senator Harry Reid's bait and switch tactics to advance the public option.
The Editors of the National Review continue to oppose cap and trade -- this time in the form of the Senate's bill.
The Employee Free Choice Act Rap explains how the policy is misnamed.
Dan Senor and Saul Singer answer how Israel's military has helped its economy.
Jonah Goldberg covers the latest in climate control alarmism.
Great Moments in Conservatism: Ronald Reagan's A Time for Choosing.

Have an idea for tomorrow’s must-read list? Send it to me via Twitter (@unterekless) or post a comment below!

Lieberman's Choice

John Hanlon — Wed, 28 Oct 2009 11:00:00 GMT

Senator Joe Lieberman (I-CT), once a minor player in the health care debate, has emerged as a major voice in opposition to a public health care option, placing liberals on the defensive in their pursuit of a government option. Earlier this week, the Senate Majority Leader Harry Reid made a major announcement about health care reform. According to CNN.com, "Reid announced his decision to craft legislation including a public insurance option allowing states to opt out. Reid's decision is a major victory for the more liberal wing of the Democratic Party." That victory was short-lived as Reid's support for the government option is now facing opposition from his own party's nominee for vice president in 2000.

As CNN.com reported yesterday, Lieberman stated that he "opposes any kind of public option, including state opt-out and trigger provisions, and will ultimately not vote to approve any health care bill that includes any version of a public option." Certainly, Lieberman is not the most vocal opponent of a public health care plan but his opposition quickly overshadowed Reid's support for the bill. It also underscored the idea that some Senators on the left still have major concerns about pushing forward with the public option that Reid now supports. As The Wall Street Journal pointed out, "Moderates who are key to the bill's passage expressed skepticism about Mr. Reid's public plan, including Sens. Ben Nelson (D., Neb.) and Mary Landrieu, (D., La.)." Lieberman, who lost his party's primary in 2006 and who endorsed John McCain in the 2008 presidential election, is now facing some tough criticism because of his stance on this important issue. In addition to some unsurprising criticism from liberals, Politico.com also quoted from the president's own spokesperson in an article about Lieberman's choice:

'I think Democrats and Republicans alike will be held accountable by their constituents who want to see health care reform enacted this year,' said White House press secretary Robert Gibbs, speaking to reporters Tuesday on Air Force One.

The Politico.com article did not note if Obama's press secretary was speaking directly about Lieberman or broadly about the subject of health care reform. What is clear, though, is that Senator Lieberman will likely become more high-profile in the weeks to come as the full Senate comes closer to a health care debate. Reid's announcement on Monday may have given liberals hope for a public option in that debate but Lieberman's announcement on Tuesday gave the opposition to that option some momentum. Once again, Lieberman has stood up against his party and made himself a major and important voice that is addressing a major issue for this country, whether the Senate Majority Leader appreciates that or not..

Health Care Trouble Hits the House.

Jimmie Bise — Wed, 28 Oct 2009 05:15:00 GMT

On Monday, I noted a couple of stories on how Obamacare is in real trouble in the Senate. Well, things are even worse in the House.

Speaker Pelosi is in the middle of a knock-down-drag-out fight with Rep. Bart Stupak (D-MI) over the abortion provisions of the House version of Obamacare. You may remember that some of the more controversial provisions (or at least those controversial to those not on the hard edge of the progressive left) allow for Congress to use taxpayer money to pay for abortions as part of the "public option". Stupak, who is a pro-life Democrat wants those provisions voted on out in the open instead of in committee, where Pelosi is planning on making them part of the bill. He is so determined to get a formal floor vote that he's assembled a coalition of 40 Democratic House members who are willing to walk away from Obamacare if they don't get what they want.

This is a major problem for the Speaker. The provisions are extremely unpopular with the American people and the last thing she wants is for those parts of the bill to become emblematic of the whole. Even most who favor Obamacare-style reform don't want abortions included as part of a core government health care plan (and I should note here that many of those who support government-run health care also consider themselves pro-choice). At this point, Pelosi needs a couple weeks of smooth sailing to settle down the poll numbers and to allow the President to hit the campaign trail for his cornerstone legislative initiative. However, if Obamacare is defined as "the government pays for abortions with your money", it's going to lose worse than the Washington Redskins have this year.

At this point, the theory I put forward on Monday seems to be good as gold. If we who favor reasonable, free-market reforms and less government interference in health care decisions can continue to apply pressure, the Democrats may well kill Obamacare themselves. If not, they are likely to find themselves on the business end of a landslide electoral defeat in 2010.

Morning Conservative Reading List - October 27, 2009

Karen Untereker — Tue, 27 Oct 2009 12:00:00 GMT

Enjoy these conservative articles and blog posts from around the web:

The Wall Street Journal examines TARP.
Thomas Sowell covers the crazy things happening in America right now.
Jennifer Rubin on lies the Obama administration is telling about Afghanistan.
Michael Barone discusses President Obama's choice to not attend the 20th Anniversary of the fall of the Berlin Wall.
Bill Dupray wonders if Reid has ulterior motives for pushing the public option.
Global warming warnings and numbers keep changing, but the story stays the same.
Diana West talks about bribery in Afghanistan.

Have an idea for tomorrow’s must-read list? Send it to me via Twitter (@unterekless) or post a comment below!

Coaxed By Hoaxes

Matt Margolis — Tue, 27 Oct 2009 00:42:00 GMT

If you haven't heard already, reports of Obama's Columbia thesis was a hoax. This of course became know after various bloggers, and talk radio king Rush Limbaugh reported on it as news after being led to believe the story was legitimate.

It's easy to say that those who wrote about it prior to it being revealed as a hoax should have not said anything about it or known better or whatever excuse you want that places blame on those who report on things that turn out not to be true.

It be easy to place blame on those people, as the left surely would love to crucify Rush to "spreading false rumors" etc., etc., but have people already forgotten that Rush was recently the victim of a deliberate fabrication that was reported as fact by The Huffington Post and CNN, among other places?

TTruth be told, Rush was quicker to correct the record than those who reported on the fabricated racist quotes attributed to him by The Huffington Post. And who was hurt more by these two incidents? Obama, while suffering in the polls, can't attribute any of it to the false thesis story. Rush, on the other hand... well, is he a part of the partnership trying to buy the St. Louis Rams anymore?

To put this in perspective, fabricated quotes designed to falsely paint someone as a racist is far more serious and sinister than a satire piece being accidentally picked up as legitimate, and then being quickly corrected.

Rush lost out on a business opportunity due to libel. Barack Obama probably isn't even aware of the false thesis story (after all, he claimed to have been unaware of the tea parties) so let's try to agree that false stories are best corrected and ignored, not propagated out of the desire for political gain.

Fact Check: Is the Obama White House fighting for transparency in the health care debate?

John Hanlon — Mon, 26 Oct 2009 11:00:00 GMT

As various news sources have reported, the Obama White House is now actively involved in the health care reform negotiations on Capitol Hill. As The Washington Times has reported, the White House has a representative at many of the meetings where a new health care reform bill is being written. However, the Times also added that critics have noticed the lack of transparency and openness about such meetings in spite of the White House's promises on the subject.

As The Washington Times recently reported, "Three times last week, White House officials went to Capitol Hill to meet in closed sessions with top Senate Democrats to put together a health bill...[The little information released about the success of those meetings is] not exactly the level of transparency that President Obama promised during the campaign, when he said health care talks would be aired live on C-SPAN. " That article also quoted then-Senator Obama on the campaign trail last year talking about future health care negotiation meetings: "We'll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents and who are making arguments on behalf of the drug companies or the insurance companies." In July of this year, when asked at a press conference about health care meetings not being shown on C-SPAN, Obama said the following:

With respect to all of the negotiations not being on C-SPAN, you will recall in this very room that our kickoff event was here on C- SPAN and, at a certain point, you know, you start getting into all kinds of different meetings. Senate Finance is having a meeting; the House is having a meeting. If they wanted those to be on C-SPAN, then I would welcome it. I don't think there are a lot of secrets going on in there.

Unfortunately, Obama has not stood up for such transparency in recent days. Many people believe that the Congress is only a few weeks away from releasing a bill that could be voted on in the Congress. Transparency is now much more important because of the stage that we are in. Bills that have already been written are being modified and merged so it is important that people are aware of how the choices about health care reform are being made and yet Obama has not stood up to strongly advocate for the health care meetings to be broadcast on C-SPAN. He has not insisted that his aides who go to the health care meetings talk to the press openly about what is happening behind closed doors. Obama should understand the importance of transparency on this issue.

In a post last week, I quoted a New York Times story stating that some Senators on the left were advocating for more transparency in the health care debate. These Senators wanted the American people to be able to see the health care bill days in advance of the Senate voting on it. That was a solid step towards transparency but that came from moderate Senators on the left, not from the 44th President. The Obama White House should take additional steps to create more transparency in the debate about this important issue. Obama has been able to talk wisely about the importance of transparency on this issue but he has not yet taken the steps necessary to ensure the existence of it.

The Later the Vote, the Better Off We Are, and the More Likely The Dems Will Kill Obamacare Themselves

Jimmie Bise — Mon, 26 Oct 2009 08:19:00 GMT

There is a lot of recent news coming out of Congress that ought to make conservatives happy and steel our wills against the President's big health care plans. In fact, if I'm reading the tea leaves correctly, there's a good chance that the Democrats themselves could kill Obamacare by early next year.

The last time the Obama administration set a deadline on Obamacare, Congress missed it by a few days, went on August recess, and got blasted so hard by the American people that they curl up in the fetal position and whimper at the thought of holding another town hall meeting. Since then, the administration has been a little hesitant about setting a new deadline, though the Vice President and OMB Director Peter Orzag has mentioned, sotto voce, that the president would like to see a vote some time in November. Senate Majority Leader Harry Reid (D-NV) was hopeful, with extra hopey hopefulness, that there could be a vote before Thanksgiving, but that doesn't look like it's going to happen.

In fact, the likelihood now is that the final Obamacare bill won't come up for a vote until Christmas, at least.

The healthcare reform debate will be pushed deep into December and possibly beyond by a lengthy floor debate, several senators predicted Thursday.

Senate Majority Leader Harry Reid (D-Nev.) is under pressure from a group of centrist Republicans and Democrats who are demanding a go-slow approach.

They want adequate time to review the legislative language and to give the Congressional Budget Office (CBO) a chance to provide a detailed cost estimate.
As a result, the legislation will not reach the Senate floor sooner than the first week in November and has no chance of being approved by Thanksgiving. Democratic and Republican lawmakers expect the floor debate to take at least a month, putting negotiations between the Senate and House squarely in December.

The CBO has already weighed in on the Baucus Proposal with a report that caused much rejoicing among Obamacare supporters. However, as has already been noted here, that report is worth not quite as much as the paper on which it's printed since, as the head of the CBO said, his office couldn't possibly render an accurate accounting of costs until there was some real legislative language to analyze. Some Senators, like Olympia Snowe (R-ME), whose so-called centrist vote is much-coveted as political cover by a Democratic majority that already owns a supermajority, have dug in their heels for a real CBO analysis and substantial debate. Indeed, Snowe is saying there may not even be a vote until after Congress comes back from its Christmas break, some time in January, 2010.

That is bad news for the President because the longer Obamacare lingers where voters can see it, the worse it looks to them. Public support for government-run health care has declined greatly since the beginning of this year and the negative numbers are on a steady upward climb. There is a very good chance that the approval/disapproval numbers will be entirely upside-down by the beginning of next year.

Public support for Obamacare is the real issue here, not because of principle but because of that Ol' Debbil Politics. If the Democrats firmly believed government-run health care is good for America, they could pass it in a week or two. They have enough raw political power to push through their preferred bills without any help from the Republican Party. The minority doesn't really have any tricks up its sleeve to stop that from happening and everyone knows it.

However, if they do pass it using nothing but raw political power, the bill belongs to them, and only to them and with the 2010 midterm election about a year away, they don't want that millstone hanging around just their necks. They needs a couple Republicans to come on board so they can claim bipartisan approval of their totalitarian monstrosity and inure themselves somewhat from the anger of the electorate.

That's why the longer Obamacare gets kicked around, the less likely it is we'll ever see it pass. The Democrats can not survive as a majority in both houses of Congress if the voters clearly remember that they were behind it. There are plenty of vulnerable members of Congress who aren't in safe left-wing seats who may just be willing to kill Obamacare themselves if the leadership lets the final vote slip too far into 2010.

And wouldn't that be a great thing?

Morning Conservative Reading List - October 25, 2009

Despina Karras — Sun, 25 Oct 2009 12:34:00 GMT

Good morning, here are today's conservative must-reads.

From Roy Smith: 5 myths about Wall Street.
George Will on the GOP's other female firecracker, Michele Bachmann.
Understanding all the facts about the uninsured.
Rich Lowry thinks it's not a good idea to run a financial system based on inflamed popular sentiment.
Andrew McCarthy says Guantanamo closure will lead to prisoner transfers to U.S.
Iran misses another deadline.
Melissa Clouthier on Sarah Palin striking back at GOP.
A funny read from John Kass on Obama's need for a 'Chicago way' czar.

Have a comment or suggestion? Post below, or find me on Twitter, @despinakarras.