Economic Populism and the Cash for Clunkers Boondoggle
Michigan politicians, both Republican and Democrat alike, suffer from an urge to please the masses, even when doing so results in long-term harm to government budgets and the overall economy. Even supposed conservative Republican Congressman Pete Hoekstra, voted last fall to bailout the domestic auto industry out of fear of feeling the wrath from his fellow Michiganders for letting GM and Chrysler fall into bankruptcy. So a “bridge loan” was approved by Congress, but despite this bailout money, both companies still went into bankruptcy court for restructuring, which in hindsight appears to have been the best of many poor options all along.
The Cash for Clunkers program was simply another government scheme disguised as a way to help the American auto industry. So it seems as only poetic justice that most of the “clunkers” being turned in are American vehicles while most of the vehicles traded in for are Japanese. And to think, Transportation Secretary Ray Lahood has said “it’s a thrill to be a part of the best economic news story in America…As a result of the program, automotive inventory has been depleted and both General Motors and Ford are ramping up production, adding shifts and rehiring laid off workers.”
And the program is also textbook example of why Congressman Hoekstra has unfortunately abdicated his position as the conservative voice in the gubernatorial primary for governor. This very issue demonstrates the rampant economic populism that has infected Michigan politics for the last 40 years, and not surprisingly, has made Michigan a less attractive place to do business over that same period of time.
Countless people in our state have thought to themselves “if only we help the auto industry and protect good union jobs, then everything in Michigan will be alright.” Well this belief is based upon the assumption that even if the government wants to help those in need, it is effectively able to, as opposed to causing more problems than it sought to fix (see recent article by Ron Paul “The Free Market as Regulator”).
And while Hoekstra has been in Congress for over 16 years, it is still hard to believe that he (being once the only bright-spot in an otherwise lackluster delegation from Michigan) is surprised that the government’s processing of dealers’ requests for rebates has run into bureaucratic red-tape. “It’s not brain surgery, it’s processing a rebate,” he said. “We don’t need another law, we need some competence.” Wow! He expects competence from government? I guess he is more out of touch than initially thought. “It appears that we have to do at least some checking as to whether this whole administrative thing worked the way it was intended to and we just need some more money for it to work.” Spoken like a true “conservative” Republican.
As Tyler Gaastra of redcounty.com has said, this was an example of “politics over principle for West Michigan Republicans”:
[A]s a matter of principle, it is unfortunate that both local congressmen supported the bill. Alternatively, from a local politics perspective, the vote is entirely reasonable. Just imagine the ads that would have been made by the Michigan Democratic Party: ‘Peter Hoekstra says he supports Michigan car companies, but when it came to the successful Cash for Clunkers program Hoekstra said NO to Michigan businesses and Michigan jobs.’…In this case, local politics trumped principle
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