Thursday, August 20, 2009

Cash for Clunkers - Are the Car Dealers Getting Clunked?

Hmmm. The Obama administration is claiming huge success with the Cash for Clunkers program. Well, it seemed a success, but the backwash is going to be extreme. Has this program been a cardboard cake form with thick sugary frosting on top? Apparently some dealerships are thinking so and are pulling out of the program. Why? Because they sold thousands of cars with a rebate of $3500 to $4500 per car from their lots but have received only 2% of $3 million dollar funding. So, can you blame them for pulling out now?

First, the government has placed a heavy shadow on these dealerships (the shadow of being closed down by the government, not based upon profitability but on ambiguity which some say is based upon political positions and favors).

Second, these dealerships have had a lot of their money tied up in loans for their business infrastructure as well as for their inventories for quite a while. Now, they're supporting the government's Cash for Clunkers Program by "loaning" the government these enormous amounts of money with no interest for an indefinite amount of time. (The agreement originally said there would be a maximum of 10-day wait for the reimbursement.)

So, it's easy to understand that these dealerships which had been allowed to continue their automotive business after the first White House "whack-down", signed up in the first place -- perhaps for fear of reprisal if they didn't. However, they're now paying interest on money that was passed on to these "clunker" customers and the White House isn't following through on their end of the deal. I'm sure they're wondering which situation is worse, going out of business because the Great and Mighty White House can arbitrarily shut them down, or having the banks foreclose on their business because they sold too many cars under the government's program for which they have not been reimbursed. I'm sure some of them dealers are finding it very difficult to make their mortgage and loan payments while they wait on the government to reimburse them. They're being screwed. How sad!

The White House says that the problem came about because the program was more successful than they'd anticipated. That's no excuse. No program should be implemented until it is thought through, and certainly given much more thought than this one was. That is not to say there won't be a few glitches because a new program always has some issues. However, in my opinion, this was a huge - and I mean huge! - miscalculation with no alternate recourse to be made available.

Okay, here's what a lot of folks are saying now after this fiasco: If the government can't run a simple program - and it is simple; customers trade an old car for a new one, the dealer files a claim online, and is supposed to get the rebate back in 10 days for the money that he's already passed on to the customer - then how in the world can we trust the government to handle more complex medical issues? They can't, primarily because they have no clue about the nuances of medical care. They don't have a clue about running a successful, profitable business. (This is not to say that they don't know how to get their hands on money and lots of it.... just ask Axelrod!)

Americans have to wake up from their fairytale dream and realize that the present administration is not their friend. It is not in power to benefit anyone other than those within the administration. And it's their intent, proven by their efforts to take over and destroy every part of American life, to gain as much power as they possibly can which will bring them great wealth at the expense of all the rest of us. When the majority of the people are against something proposed by the Administration, that should tell them something. But not this administration. Not this Congress. They are pushing through with each one of their agendas at the peril of destruction to this nation. Obama is not Prince Charming and this story cannot have a "live happily everafter" ending. That is, unless we as a nation step forward and begin right now to rewrite the story and its ending!

No comments:

Post a Comment